The definitive working paper quoted most frequently is the brilliant body of work performed by Michael Luca of Harvard Business School.
If you look within the detail, it shows a 5.4 to 9% revenue increase for restaurants - attributed to a HALF-Star increase on Yelp.
He rounds it up in the interests of conservatism - so the summary suggests a One Star increase is required to deliver a potential 9% increase in Gross Revenues.
Click HERE to see the Harvard Business School report. It seemed that the initial response to Mr. Luca's report from the market was one of skepticism. And perhaps that was in part the driver that led to U.C Berkeley's follow-up research - to see if Harvard's results would be repeated.
Our feeling is that U.C Berkeley's findings did not just confirm Harvard's: They amplified them.
Michael Anderson and Jeremy Magruder analyzed 148,000 reviews for 328 restaurants in the San Francisco area:
Their study found that moving from 3 stars to 3.5 stars increases a restaurant's chance of selling out during prime dining times from 13 percent, to 34 percent. And that moving from 3.5 stars to 4 stars increases the chance of selling out during prime dining times by Another Nineteen Percentage Points. There's more research to come with future analysis of TripAdvisor, Amazon, and more - and we'll update this page with more research articles as they publish.
And in the meantime, we look forward to
Protecting your reputation,
Improving your reviews and
Increasing your revenues.
Click HERE to see the U.C Berkeley News Center Article.