Product Analysis: Yelp

This is the first in a series of product analyses that I wanted to do to improve my product management skills. The idea is that since I am already using these services, I know a bit about the user experience. This combined with a bit of research on the company, I can make an assessment of what they’re doing well and how they can improve. I’m going to be as transparent as I can about where I’m getting my information so that I can explain my thought process and improve on this process over time.

Without further ado, lets talk about Yelp. This is quite a popular app that I’ve been using for a while before I even formally joined their ecosystem. I’ve been using their reviews for restaurants and events mostly. Deep diving into the company made me realize that they have much larger ambitions than just a review service. Their company goal is connecting people to great local businesses. So that’s what I’ll be evaluating them on. I’ll talk a bit about the current state of the business based on information from the latest investment call. I’ll talk about things I commend as good ideas that are being implemented in conjunction with some improvement ideas that I’ve thought of. Lastly, I’ll touch on some personas and end this with some recommendations around strategy.

Yelp as a business strategy is separated into two main genres. They’re a search engine and a social media network. Most of the times that I used their services I used the search engine feature without much interaction. This is congruent with their internal assessment that ~90% of the customers interacting with Yelp will make a purchase within a week. Yelp has invested heavily in service businesses, in addition to Restaurants/Nightlife, as another high growth business-line that benefits greatly from word of mouth goodwill. So, evaluating Yelp as search, we have a destination that is known to have the information about local business and how they operate — this reputation is the network effect pulling people into the service before they make a purchase. If you want to leverage this as a business, you want to be able to tell this information-seeking consumer “Hey customer, here’s the info you were looking for about that plumber. Also, here are other plumbers that are rated highly. Also, people who look for this plumber might also be interested in a refrigerator repairman and a water damage inspector. Lastly, if you do pursue a purchase here, we want to know so that you can leave a review here to pull in other customers and build our network effect.” This requires a stellar recommendation engine.

For the social media aspect of Yelp, requires more delicate tools. Yelp Connect (business announcements), Yelp Elite Squad (perks for high interaction users) and Yelp Enhanced Profiles are aspects of Yelp, the social media company. Building out the social media capabilities of the platform unlock the data and personal network effect. This means having more people and businesses on the Yelp network but also having more of their information and interactions publicly available on the Yelp network. Currently Yelps social integration is a two-way flow of information between consumers and businesses captured through reviews; which scales relatively slowly. Yelp needs to build a true web infrastructure. For an example of this, let’s follow a story of me enjoying a local Indian restaurant. If I want to recommend it to my friend Ahmed, who loves Indian food, I’d currently copy the link from Yelp and send it to Ahmed through some other social messenger app or email. Even if we are both active Yelp users. To leverage this interaction, Yelp should add a public ecosystem of recommendations similar to the early Facebook wall, where I can send my recommendation to “Ahmed” while it counts as a review/feedback for the business and other people can interact with it. This keeps people on the platform. This also pulls people into the system instead of relying on their reputation to bring people to the platform. With a true ecosystem of connected business, people and communities, we can see Yelp being the hub facilitating events, and community engagement. Enabling the community to reach into someone’s empty afternoon and give them informed options about how to interact with local businesses without them having the initiative on their own.

A great product and data strategy are at the center of the recommendations we’ve discussed here for Yelp. To improve the search experience and interactions you need to be able to understand the usual options that the user persona search’s, show them relevant business options related to their search and then be able to iterate and improve on that process. The information gathering is just as important as the algorithms to process the recommendations. Garbage in is garbage out. Gathering data at the search queries then connecting that data to user purchases and behaviors requires a data process that is standardized so that you can compare across users and time. Making analyses across historical data and relating findings with new features requires novel and strict data-logging practices. A comprehensive data strategy is at the center of the changes needed to improve the social network aspect of Yelp. Data on business-user and user-user interactions need to be tracked and connected to the purchase actions to properly understand the connection to the end result. This all needs to be fed into a top tier experimentation or A/B testing platform that enables the product team to evaluate how their product decisions can lead users to great local businesses.

With all this in mind, lets talk about the relevant personas:

• Users — This could break down into a searching user or one that is just has a yelp account and is just looking to add a review to a business they have frequented. Both cases are captured in stories: As a user, I want to find information about [business type] so that I can make a great purchase of [business service/product]. Also, as a user, I want to publish my review to publicly display the experience/feelings I had with [business X].
• Businesses — The primary goal of businesses on Yelp (and generally) is to attract the right type of customer to their page. As a business, I want to be present in the search results of searches that are relevant to me. I also want to control and enhance my reputation so that people searching for adjacent services are drawn to my service.
• Internal Data Engineers — This is an interesting party. From the analysis, I’ve included them to accentuate how their work will be key to the experience of the first two personas. As a data engineer at Yelp, I want to prioritize relevance to the user and business relationships facilitated through Yelp. I want to use a better understanding of user behavior to suggest actions that reduce recidivism and encourage engagement on the platform.

According to Yelp management, Yelp has undergone a transformation that has deemphasized person to person sales and onboarding for self-service, intuitive UI/UX, product management and data driven decisions. This method has a longer runway but is more effective in building a high-retention network that reaps the operating income efficiency of a great software platform implementation.