07/29/2010 02:16 pm ET | Updated Aug 06, 2011

Yelp: 5 Things You Need To Know

Yelp has grown up quickly, and has become one of the leading consumer review sites on the Web. As a site that started mainly with bars and restaurants, Yelp has expanded to include listings for businesses in a range of industries, from boutiques to spas and even medical offices. Yelp traffic grew 75 percent in the first quarter of 2010, and 32 million people visited the site in May to make decisions about how and where they would spend their money.

Social media expert Tom Humbarger of Social Media Today notes that Yelp gets high priority in Google search results, appearing consistently in the top five, and has a much higher volume of reviews and comments than competitors such as Urbanspoon, CitySearch and Zagat. He believes this Web-search dominance can be directly attributed to the fact that participants are assigned URLs on Yelp that use very natural language and typically spell out the full name of the business. It also encourages open dialogue across the board -- between customers and businesses, customers and customers and businesses and businesses.

The site is not without its detractors. Yelp was hit with several class-action lawsuits earlier this year -- which alleged that Yelp demanded monthly payments in exchange for deleting or modifying negative reviews -- and the company changed some of its practices as a result.

But there's no denying Yelp's continued influence, and retailers especially are wise to understand it. Still haven't jumped on the Yelp bandwagon? Here are five things you need to know.

1. Officially claim your business listing.
Registering your business with Yelp is free, but you need to go through the entire process of claiming your location to access all the site's benefits. To register, click on the "Is This Your Business?" link that appears after a summary of your location. This link activates an automated phonebot that calls your business number, at which point you enter in the four-digit code provided by the site to confirm. Once you're listed with the Yelp site as a business owner, you enjoy some crucial benefits: direct communication with your customers, who can review your business either privately or publicly; the ability to track how many people view your listing on a daily basis; the opportunity to edit basic business information as you grow, without Yelp approval; access to special company information fields that allow you to establish specialties and your history; the chance to recommend other businesses to your clients; and the ability to provide special offers, promotions and discounts to old and new customers.

2. Work your location.
Your location -- and more specifically, your proximity to your customers -- is an extremely important selling point for your business. Yelp helps you leverage your location to find the best customers in your area, or rather, to help them find you. Many Yelp users will choose you over other businesses simply because you are convenient to them geographically, and if you're the only company like yours in the area, you can effectively own an entire neighborhood. Also, if your business requires you to act quickly -- like a locksmith or a computer-repair service -- the fact that you are literally right there will allow you to offer big benefits like response-time guarantees and other perks crucial to good customer service.

3. Participate in the conversation.
Sam Firer, co-founder of The Hall Company, a New York-based public-relations firm, points out you can use Yelp to create buzz. "Yelp facilitates direct communication to an outspoken audience and a way to participate in the conversation that audience is having about your business," he says. "It's a way to influence that conversation as well. Unlike e-mail or other forms of marketing, this is a chance to directly speak to an involved audience. For small-business owners, it's even more important, because they don't have a large mailing list."

4. Keep it personal.
To use Yelp to connect with customers, keep your interaction personal. Julia Martin, owner of Nitespa in Venice Beach, Calif., relies heavily on Yelp for referrals, specials, promotions and as an interactive social-media tool. "People's reviews on Yelp are very important to my spa and to the beauty industry in general. It's a personalized type of service, and people want to know what they are getting for their money."

To bolster a valuable connection with her clients, Martin logs onto her Yelp account daily to check new reviews and offer specials to Yelp users. "Most importantly, I respond to people who didn't have a five-star experience. Often I can get them to come back, and then they end up giving us a great review. They appreciate that someone really cares about their experience."

5. Put on a happy face.
Firer stresses that when you get involved with Yelp, you can't overreact. The nature of the site is to facilitate feedback, and that will inevitably lead to some complaints, whether founded or unfounded. "Everyone is a critic today," he says. "Be gracious when reaching out and responding to a complaint or an unfair posting. Even if the Yelp posting is wrong, you can only do one thing about it: Change the writer's mind about the place by giving something in return and inviting them back to experience the establishment again." Cool down and try to read what is behind a negative comment, then be honest, straightforward and professional in your response.

The original version of this article appeared on AOL Small Business on 7/29/10.