Cost of buying sponsorships on Yelp

 2005, Stoppelman and Simmons raised $5 million from Bessemer Ventures, the VC firm behind Verisign and Skype, among others, and then last November another $10 million from Benchmark Capital, whose hits include eBay and Red Hat (Charts). The company’s strategy is to build a rabid following in any given market. Once an establishment has a good number of reviews, a Yelp salesperson calls to make sure the establishment’s owner is aware of all the chatter going on, offers a Yelp window sticker, and, of course, tries to sell an ad. Ads and sponsorship packages range from $200 to $2,000 a month.

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For restaurateurs and bar owners, hosting an elite event with free food and an open bar can easily pay for itself. Neej Gore, the 29-year-old owner of Etiquette, a San Francisco nightclub, hosted such an event in late June, complete with break dancers. Two days later Etiquette had an additional three dozen reviews averaging four stars. Before Yelp, Gore would print fliers to attract people to his club. Now, he says, “we’ve almost eliminated our print budget. We don’t do many fliers anymore.”

Oakland Cafe Bans Yelpers

While some businesses love the attention they buy receive from Yelp, others are growing annoyed with the empire of would-be critics. Such is the case at Rooz Cafe in Oakland, where the owner has placed a “No Yelpers!!” sticker on his counter in the wake of several negative Yelp reviews that the cafe staff says were “being ’snarky’ for entertainment reasons or to impress the Yelp community.” Rooz Cafe reps say that if customers do indeed hold complaints, the critique should be mentioned to the staff rather than be posted online “with attitude.”

Among the personal attack entries on Rooz’s Yelp page comes this review from Yelper Kevin L: “Dyed hair, dirty, gothic type staff. Very rude. This business will collapse into an utter pile of vile soon enough due to the Cafe Nazi.”

To counter such negative reviews, the owner put up the now-infamous sticker and told his friends/staff to flood the site with positive reviews.

See http://sf.eater.com/archives/2007/10/18/yelp_wanted_oakland_cafe_bans.php

   Rooz Cafe [Yelp]
· “No Yelpers”; Says One Local Cafe [screenwerk]
· Yelp Wanted: On the Issue of Pre-Opening Reviews [~ESF~]
· Yelp Wanted: Yelp Nation Responds … Boy, Does It Ever. [~ESF~]
· Yelp Wanted: The Curious Case of the Magically-Appearing Five-Star Review [~ESF~]

Growth concepts pick up the pace

“The people who won’t weather the storm are those who cut labor and quality,” he says. “That will separate the real players from the pretenders.”

So will a strong marketing effort, according to Linda Duke, chief executive of Duke Marketing, based in San Rafael, Calif.

About 43 percent of fast-casual executives do not conduct customer-satisfaction surveys, according to the 2007 Fast Casual State of the Industry Report from Fast Casual magazine. Twenty percent conduct them annually, 7.5 percent do them monthly and weekly and 5 percent conduct them quarterly.

Those numbers surprise Duke.

“One of the things I was totally blown away by is that the area that needs the biggest help is marketing,” she says.

Some restaurant managers do a good job of marketing to the communities around their stores, Duke says, but many others are lagging in this area.

“They’re really not doing a lot of communication,” she says. “There’s a big opportunity to improve.”

Duke sees a shake-up coming in the segment, with weaker brands falling by the wayside. For those chains that market effectively, she says, “your brand will stand out.”

Local store marketing, including direct mail and community involvement, is the best way to sustain the viability of a concept, says David Wolfgram, chief executive of San Francisco-based Forklift Brands.

See http://www.nrn.com/article.aspx?id=346566

Operators find that e-mail can be an effective medium for building consumer loyalty.

Building relationships with consumers requires more than providing attentive service when guests are dining. Bonding means keeping up a conversation with guests and using incentives, special offers or educational information (such as brief food or wine tutorials) to let them know they are valued. Many operators find that e-mail is the best medium for forging such bonds.Although some recipients may consider an e-mail offer to be intrusive, many of those who feel connected to a restaurant brand welcome the contact and opt to receive future communications. That’s how a brand such as Morton’s, The Steakhouse, amasses a database of more than 250,000 consumers to whom the company sends a monthly e-mail newsletter

See Full Story by Derek Gale  http://www.rimag.com/archives/2007/10a/business-email.asp

Some Restaurants Bribe Bloggers

As online food sites become increasingly influential in the restaurant business, chefs and owners are plying bloggers with free meals to get good write-ups. Some are also posting favorable reviews about themselves on popular Web sites or becoming Internet scribes.

Among those using the tactics are some of the biggest names in the business. Terrance Brennan, co-owner and chef of New York’s Artisanal Bistro and Picholine, hosted a cheese class for bloggers last year, waiving the usual $75-a-person fee. Bill Telepan, chef and co-owner of Telepan in New York, donated a $200, four-course meal to one influential blogger’s online contest. And in Washington, the Park Hyatt’s Blue Duck Tavern says it invited a customer back for a free Father’s Day meal after she posted a negative comment on the Washington Post’s Web site. (In a follow-up post, the diner wrote, “We will definitely return to Blue Duck Tavern,” not mentioning that she had been invited free.)

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http://online.wsj.com/public/article/SB119162341176250617-CaeHzB8Amqw9nAhRPwcdTI4QOJI_20071104.html?mod=dist_smartbrief

EVERYBODY’S AN ONLINE CRITIC

The web is just lousy with amateur restaurant reviewers—ignore them at your peril.

About a year ago, Bruno Serato got a taste of what the Internet can do. An anonymous writer had posted several reviews of Serato’s Northern Italian restaurant, Anaheim White House, on various Web sites. All the reviews were negative and, Serato claims, inaccurate.

“It was very nasty stuff,” he recalls. “Items that didn’t exist on the menu.”

Serato consulted a lawyer, but found there was nothing he could do. “It’s a free country, you have to let them write what they want. But they do damage.”

With the help of the Internet, not only is everyone a critic, but they can be heard around the world. On one hand, the more customer feedback you get, the better. On the other hand, negative reviews on sites like Yelp.com or on blogs can sway the opinions of potential customers. Properly handling less than stellar reviews can improve customer relations, your restaurant and boost your reputation online.
http://www.restaurantbiz.com/index.php?option=com_content&task=view&id=13816

Chain Email Marketing is Killing Independents .

http://www.suntimes.com/business/587637,CST-FIN-rest04.article

Chains, with their e-mail advertising, are taking customers away from the independents, said Durand, president of Chicago Originals. He noted that those operated by Chicago-based Lettuce Entertain You Enterprises and Levy Restaurants are also threats to the smaller businesses.