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Question: Should we utilize paid advertising with Yelp?

Gary Elekes; Founder, EPC Training:

Well, the answer is yes and no, because Yelp varies greatly depending upon the marketplace. So we’ve had — like in our own marketplace in Phoenix — we’ve had great success with Yelp. And in other markets, not so much.

So, it depends on the users that are in the Yelp community, just like we talked about earlier: identifying your target audience and your target geographic zones is part of the marketing model. So in a marketplace where Yelp actually has a strong brand and a strong digital footprint, which in many cases they do, the Yelp advertising works well.

But I think if you go onto a variety of contractor networking forums, ours [ContractorConnect.org] included, you’ll find differences of opinion on that. Meaning that other people have found that the Yelp customer is not really a good customer, and is somebody that they’d just as soon not do business with.

So the answer is I think you have to do A and B testing, it’s what we talked about earlier. You have a campaign, you set up a promotion, you work with Yelp to see how it works, you track the actual results, you look at your cost per lead, you look at your cost per sale, your gross profit dollars per transaction, and you determine whether or not that’s a medium that is a quality medium for your brand and the business model you’re operating under.

I could spend a lot of time and go through each medium that’s digital in that regard. There’s just a great variety in the marketplace and — Angie’s List is a good example. It used to be a fantastic lead source for us, and it’s turned into something that we wouldn’t touch with a ten-foot pole today. Now some people might have great success with that in other marketplaces, but in our area that product has changed quite a bit, and the market has changed. Therefore, our A/B testing says it’s not really a good place for us to spend our money, even though this question is about Yelp.

Today, we would say Yelp is a good place for us in our area, but again, it can change, so you’re constantly looking at your metrics. And I think the biggest issue with contractors is that we don’t always track success patterns of it, and we need isolate the cost per lead and the cost per transaction. Drew and Wally, I’ll pass this off to you.

This is the weekly Ask the Experts free excerpt. To listen to all of this week’s calls, or to see the schedule and register for future calls, click here.