Yelp announced today the launch of a new revenue estimation tool for local businesses. With this tool, any shop owner can determine just how much of their business coming from Yelp compares to the national averages based on a Boston Consulting Group Study released last week. Available for free, Yelp says all businesses will be able to access the tool beginning today.
In a post announcing the news, Matt Halprin, Yelp’s Vice President of Revenue & Analytics, says that the revenue estimation tool will be beneficial to all business owners for two reasons:
- It will help to quantify the revenue opportunities Yelp believes it is sending to each business
- It will establish a revenue baseline for prospective advertisers, which can be used to help evaluate the impact of their investment in Yelp Ads
So. Much. Tech.
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So how does this service handle the calculations to determine how a particular business stacks up against the national average? According to Yelp, it will multiply customer leads sent by the service each month by the business’s average revenue per customer lead. It will also include the average spend per customer for each business category, as a matter of reference and based on the BCG study.
Yelp currently has 39,800 active business accounts, which is a 68 percent growth from 2011, according to its Q4 2012 financial earnings. At the end of last year, the company said that it had more than 36 million reviews in its system. At the time, Yelp’s CEO Jeremy Stoppelman said that he believed 2013 would be a “tipping point for our brand in Europe as Yelp continues to become a trusted local resource.” He also said that not only would mobile be a top priority, but Yelp would continue to focus on the business owners, “creating more ways to measure the value of Yelp leads.”
The revenue estimation tool appears to be just the latest innovation Yelp has for the business owner. With thousands of businesses utilizing Yelp, some might be thinking about how exactly it’s beneficial for them. At some point, they might even wonder how they would know if being on Yelp actually produced a sale — this new tool will hopefully answer that question and make the business owner feel comfortable with using the service.
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