Experts are saying that online restaurant reviews have taken the bite out of Zagat in less than six short years. Remember the days when a Zagat review was a vital part of the gourmands’ decisions in eating out? In the ‘80s and ‘90s, it was like the bible of gourmands and foodies. This has changed – not to mention that their choice to hide their ratings and reviews behind a paid subscription hurt its popularity since anyone can find restaurant reviews free of charge on the Web.
Mobile Apps and Online Restaurant Reviews
While Zagat’s subscriptions have plummeted, they are desperately trying to increase their profit by improving their importance to the foodie on the go. For just $9.99 a year, you can put the Zagat app on your phone and be on your way.
But why would consumers do this when the Yelp app is free? With or without the review, it still proves useful with pertinent contact information and an easily accessible map of restaurant locations.
The Power of Yelp
Yelp has collected over 20 million reviews from amateur reviewers in less than 20 years. Can these amateur reviews really take the place of professional food critics? HBS professor Michael Luca says yes. After combining revenue data and Yelp stars, statistics show that going up one star in ratings can affect a restaurant’s profits by five to nine percent.
Restaurant Reputation Management
Needless to say, restaurant managers and owners aren’t quite as excited about the massive amounts of online restaurant reviews from Yelp. But there is a silver lining to this dilemma. Many restaurants are foregoing their traditional advertising methods for reputation maintenance.
What does reputation management involve? Mostly it involves an adherence to high standards and quality in food. This is a win-win situation. Of course, some may try to game the system with phony reviews and false rankings, but Yelp’s algorithm is designed to detect these phony online restaurant reviews.
Jim Balis' Blog 