Yelp drives $879 million in services advertising revenue annually, with home services accounting for 65% of that total. Whether you love it or hate it, the platform is impossible to ignore if you’re running a contracting business.

But contractor sentiment on Yelp remains deeply divided. Some operators report $645 in revenue per call and 45% close rates. Others spend $450 per month for six months without landing a single customer. The difference comes down to understanding how the platform actually works and whether it fits your specific situation.

This guide covers everything you need to know about Yelp in 2026: setting up your free page correctly, understanding what advertising actually costs, navigating the review system, and deciding whether paid features make sense for your business.

Setting Up Your Yelp Business Page

The foundation of any Yelp strategy starts with claiming your free business page at biz.yelp.com. Claiming your page is completely free and does not make you an advertiser or commit you to any spending.

The Claim Process

Search for your business on Yelp
Click “Claim this business” (or add it if unlisted)
Complete verification via email or phone
Optimize your profile with hours, photos, services, and specialties

Most pages are approved and listed within 24 hours, though trade license verification takes up to 5 business days. Yelp requires a minimum of a website or phone number to list your business.

Category Selection

You can select up to three business categories from over 1,200 options. Choose carefully because these directly impact which searches display your business. For a plumbing company, you might select “Plumbing,” “Water Heater Installation/Repair,” and “Drain Services” rather than just the generic “Plumbing” category.

Service Area Configuration

Contractors can specify up to six major cities, counties, or zip codes within a 50-mile radius. Cities between your specified locations are included automatically. If your service area exceeds these limits, add details in your Specialties section or post a service area map image.

You can hide your physical address if customers don’t visit your location, which is common for service-based contractors.

Photo Requirements and Best Practices

Photo dimensions must be smaller than 8000 x 8000 pixels, and all images require moderator approval. For contractors, prioritize:

In-action shots of your team working
High-quality before-and-after comparisons
Completed project photos showing quality work
Clean job sites demonstrating professionalism
Images showcasing quality materials and equipment

Add descriptive captions to every photo. Captions help your profile appear in relevant searches. Aim for at least 10-15 quality photos.

Business owner profile photos must show a clear face. Logos, storefronts, and group photos will be rejected.

Common Setup Mistakes

Incomplete profiles missing hours or service areas
Generic business descriptions lacking specific services and certifications
Low-quality or irrelevant photos
Selecting overly broad categories

The Verified License badge, which 82% of users say makes them more likely to choose a business, requires being an advertiser and providing trade license documentation.

Understanding Yelp’s Free vs. Paid Features

Yelp offers over 20 features completely free through Yelp for Business. Understanding the distinction between free and paid features helps you maximize value without overspending.

What You Get for Free

Your business listing and profile
Request a Quote functionality
Ability to respond to reviews
Customer messaging
Unlimited photo uploads
Basic analytics (page views and leads)
Mobile app access
Push notifications

These free tools provide genuine value. Your Yelp profile often ranks well in Google searches, and Request a Quote generates organic leads without advertising spend.

Yelp Ads (Paid)

Yelp Ads operates on a cost-per-click model starting at $5/day ($150/month minimum). Your ads appear as “Sponsored Results” above and below organic search results, on competitor business pages, and across Yelp’s partner network.

The Upgrade Package ($180/month)

The Upgrade Package adds enhanced features:

Business Highlights badges (select up to six from 30+ options like “Family-owned,” “Free estimates,” “Eco-friendly”)
Portfolio albums for showcasing completed projects
Custom Call-to-Action buttons
Yelp Connect posts
Video uploads
Removal of competitor ads from your page

Combined Yelp Ads plus Upgrade Package pricing starts at $270/month.

No Long-Term Contracts Required

You can cancel anytime without penalty for self-serve advertisers. However, contractors consistently report that canceling can be difficult in practice. Always request cancellation confirmation in writing.

What Yelp Advertising Actually Costs

The cost-per-click model means your actual cost per lead depends heavily on your conversion rate. Here’s what the data shows across different trades.

Cost Per Lead by Trade (2024-2025 Data)

Based on LocaliQ’s analysis of 3,211 campaigns:

Trade	Avg CPL	Conversion Rate	Avg CPC
Cleaning services	$46.99	17.65%	$8.50
Handyman	$54.05	13.45%	$7.10
Electricians	$93.69	9.08%	$12.18
Plumbing	$129.02	7.63%	$10.49
HVAC installation	$127.74	6.56%	$9.68
Landscaping	$117.92	6.42%	$8.76
Roofing	$228.15	3.70%	$10.70
General contractors	$165.67	2.61%	$5.31

Geographic variations add 20-50% in major metros like San Francisco, Los Angeles, and New York.

Real Contractor Results Vary Widely

One plumbing company spending $4,000/month reported receiving 498 user views converting to over 50% customer leads at an average $16 CPC. Meanwhile, another contractor documented spending $450/month for six months with zero new customers.

The difference often comes down to response speed, existing review strength, and market fit.

How Yelp Compares to Other Platforms

Google Local Services Ads operates on pay-per-lead pricing rather than pay-per-click. You only pay for actual leads (calls, messages, bookings), and you can dispute invalid leads for refunds. Average costs: HVAC $80 per lead, plumbing $69, landscaping $39, roofing $162.

Angi/HomeAdvisor charges $25-$120 per lead depending on trade and location, plus annual membership. Leads are shared with 3-5 other contractors simultaneously.

Thumbtack uses dynamic pricing averaging $35-$60 per lead, with up to 10-15 contractors bidding on the same job.

The pay-per-lead model on Google LSA generally delivers better ROI for most contractors, which explains why the platform is strongly preferred in contractor forums.

How Yelp’s Algorithm Works

Understanding how Yelp ranks businesses helps you optimize for visibility without wasting money.

Ranking Factors

Yelp’s search algorithm considers:

Relevance to the search query
Star rating
Review count and recency
Response rate and speed
Profile completeness
Advertising status (for sponsored positions)

Paying advertisers appear in designated “Sponsored Results” positions, but Yelp maintains that organic rankings aren’t directly influenced by advertising spend.

Response Time Matters More Than You Think

Yelp reports that customers are 2x more likely to respond when contractors reply within an hour. The industry consensus is even more urgent: 35-50% of sales go to the contractor who responds first, and leads contacted within 5-10 minutes convert at significantly higher rates.

If you can’t respond rapidly, Yelp’s value diminishes substantially.

Shared Leads Environment

For Request a Quote leads, Yelp typically distributes customer requests to multiple contractors, often up to six. This shared lead environment means speed and professionalism in your initial response determine whether you win the job.

Seasonal Patterns

Weather-related categories show the strongest seasonal variation. HVAC searches spike during extreme temperatures, roofing peaks after storms, and landscaping surges in spring.

Plan your advertising budget to align with these seasonal patterns rather than maintaining flat monthly spend.

The Yelp Review System Explained

Yelp’s recommendation algorithm is one of the most controversial aspects of the platform. Understanding how it works helps you set realistic expectations.

How Review Filtering Works

Approximately 75-78% of reviews are “recommended” and count toward ratings. The remaining 22-25% are filtered to “not recommended” status, and an additional 7% are removed outright for guideline violations.

This means nearly one-third of all reviews are hidden or removed.

What Determines Whether Reviews Stick

User activity level is the primary factor. Reviews from users who regularly search, check-in, and review on Yelp are far more likely to be recommended.

Profile completeness matters significantly. 71% of visible reviews come from users with profile images versus only 45% of filtered reviews.

IP address history plays a role. Reviews from users with no prior activity in your geographic area face scrutiny.

Facebook connections can help or hurt. Profiles connected to Facebook carry more trust, but if you’re Facebook friends with the reviewer, the review gets filtered.

Review content quality affects recommendations. Short, vague, or extremely positive/negative reviews face higher filtering rates.

Timing patterns trigger suspicion when multiple reviews arrive in clusters.

What You Can Do About Reviews

Display “Check us out on Yelp” stickers without directly asking for reviews. Soliciting reviews violates Yelp’s Terms of Service and triggers filtering.

Encourage customers to check in on Yelp, which allows the platform to prompt reviews automatically.

Never ask friends, family, or employees to review. These will be detected and filtered.

Respond to all reviews professionally. This shows engagement and may help algorithm favorability.

Focus on building reviews gradually over time rather than running one-day promotions.

Critical point: Don’t ask customers who’ve never used Yelp to leave reviews. Send them to Google instead. New user accounts with single reviews are almost always filtered. For Yelp reviews to stick, the reviewer ideally should have five or more previous reviews and an established profile.

The Business Impact of Ratings

Harvard Business School research found that a one-star increase leads to a 5-9% increase in revenue. A UC Berkeley study found a half-star increase results in 19% greater likelihood of filling capacity during peak hours.

Over 26% of consumers won’t consider a business with less than 3 stars. Given the average Yelp business rating of 4.0 stars, anything below that puts you below average.

Review volume also matters. Yelp has 20% greater impact on buying decisions when a business has 50 reviews versus 10 reviews.

Dealing with Negative and Fake Reviews

Removing unfavorable reviews on Yelp is difficult. The platform states it “doesn’t take sides in factual disputes.”

How to Report a Review

Log into your Yelp Business account
Navigate to Reviews
Click the three dots next to the review
Select “Report Review”
Choose the most appropriate reason

Strategic reason selection matters. “Contains threats, lewdness, or hate speech” receives higher priority than simple factual disputes.

You typically only get one chance. If Yelp denies your report, resubmitting another reason is often blocked.

When Removal Is Unlikely

Reviews clearly violating Terms of Service (profanity, harassment, threats) are more likely to be removed than those you simply claim are inaccurate.

If Yelp’s moderators deny removal, your only recourse is obtaining a final court order declaring the review defamatory, which is expensive and time-consuming.

The Practical Approach

Respond professionally and calmly to disputed reviews
Provide your side of the story publicly without being defensive
Focus on generating enough positive reviews to dilute the negative impact

Recent Yelp Platform Updates

Yelp released over 80 new features in 2024 and continued rolling out updates through 2025. Understanding these changes helps you take advantage of new opportunities.

Yelp Assistant

Launched in April 2024, Yelp Assistant is a conversational AI chatbot that helps users find and connect with service professionals. Project submissions through Yelp Assistant grew 400% year-over-year by Q2 2025.

The Spring 2025 update added photo recognition. Customers can snap a photo of a broken faucet or appliance for automatic project diagnosis.

AI-Powered Features for Businesses

Smart budgets providing AI-recommended ad spending
Enhanced inbox with job card summaries for faster lead evaluation
Smart selection that automatically optimizes your ad photos and review text
Response quality badges identifying contractors with excellent communication

Yelp Receptionist ($99/month)

Launched October 2025, this AI call answering service captures project details, vets leads, and provides call recordings, transcripts, and summaries. This addresses the response speed problem for contractors who can’t answer phones immediately.

Yelp Guaranteed

Expanded nationwide in January 2024, Yelp Guaranteed provides customers up to $2,500 lifetime maximum coverage for unsatisfactory work, property damage, no-shows on prepaid jobs, or fees exceeding written quotes.

The program costs businesses nothing. Eligible advertisers using Request a Quote in covered categories are automatically enrolled.

When Yelp Makes Sense for Your Business

Not every contractor should invest in Yelp advertising. Here’s how to evaluate whether it fits your situation.

Yelp Makes Sense When:

You operate emergency services in urban markets where customers need immediate help
You can respond to leads within 5-10 minutes consistently
You already have a strong review profile (4+ stars, 20+ reviews)
Your average job value justifies the cost per lead
You can handle the sales calls without it affecting your business focus

Skip Yelp Advertising When:

You operate in rural areas with low Yelp adoption
You can’t respond rapidly to leads
You focus on large projects with long sales cycles (major remodels, new construction)
You have few existing reviews or ratings below 4 stars
Your job values are too low to justify the CPL

Trade-Specific Performance

Best performers on Yelp:

Emergency services (plumbing repair, HVAC repair, water damage restoration)
Smaller, lower-cost one-off projects
Urban markets with high Yelp adoption

Worst performers on Yelp:

Large remodeling projects
Rural markets
High-ticket items with long decision cycles (pools, roofing, new construction)

The Recommended Approach for Most Contractors

Based on contractor experiences and platform economics, here’s a practical strategy:

Step 1: Claim and Optimize Your Free Page

Do this regardless of advertising plans. Your profile ranks well in Google searches and generates organic leads at no cost.

Step 2: Set Up Request a Quote

Capture leads from users who find you organically through Yelp search.

Step 3: Respond to All Reviews Professionally

Build your rating over time through consistent engagement.

Step 4: Consider Starting with Google LSA First

The pay-per-lead model typically delivers better ROI. Use it as your primary paid channel.

Step 5: Test Yelp with Minimum Budget

If your review profile is strong (4+ stars, 20+ reviews), test Yelp with $150-$300/month to evaluate results in your specific market.

Step 6: Never Sign Long-Term Contracts

Always negotiate month-to-month arrangements. Request the $300 free ad credit that Yelp sales representatives can offer before committing your own money.

Handling Yelp Sales Calls

The sales call experience represents one of the most consistent contractor complaints about Yelp. Understanding what to expect helps you make better decisions.

What to Expect

Yelp sales representatives operate under significant pressure to close deals. Sales reps will emphasize your page views, competitor activity, and potential leads you’re “missing” with data designed to create urgency.

Expect persistence. Contractors report cold calls as frequently as every two days after claiming their business page.

Negotiation Tactics That Work

Always request free ad credits before spending your own money. Most representatives can offer $300 in credits to test the platform.
Refuse long-term contracts. Demand month-to-month arrangements.
Get all promises about lead volume in writing before signing anything.
Ask specifically about cancellation procedures and get confirmation that you can cancel without fees.

To Stop Calls Permanently

State clearly “Put me on the Do Not Call list” and follow up with an email to Yelp support documenting your request.

Calculating Your Break-Even Point

Before spending on Yelp ads, run the numbers for your specific business.

The formula: (Average Job Value × Gross Margin × Close Rate) must exceed your Cost Per Lead

Example for a plumber:

Average job value: $450
Gross margin: 50%
Close rate on Yelp leads: 25%
Revenue per lead: $450 × 0.50 × 0.25 = $56.25

If your Yelp CPL is $129 (the plumbing average), you’re losing money on each lead. You’d need either higher job values, better close rates, or lower advertising costs to make the math work.

Optimizing Your Profile for Maximum Results

Whether advertising or using only free features, optimization determines your results.

Profile Completion

Complete every profile field thoroughly. Incomplete profiles rank lower and convert worse.

Write a detailed business description emphasizing your specific services, years of experience, certifications, and what differentiates you.

Fill out the Specialties section with unique offerings and detailed service descriptions.

Response Management

Enable push notifications through the Yelp for Business app to receive immediate alerts for leads.

Set up response templates for common inquiries to reply faster.

Respond to Request a Quote submissions within minutes, not hours. Include specific pricing or next steps rather than vague replies.

Address the customer’s specific project details in your response rather than sending generic templates.

Track Your Results

Yelp’s dashboard provides page views, customer leads, and activity timestamps.

Use external call tracking (dedicated phone numbers) to verify actual lead volume and quality. Compare Yelp leads to other sources to understand true cost per acquisition and job value.

Final Thoughts

Yelp occupies an uncomfortable position for contractors: too significant to ignore entirely, yet too expensive and frustrating for many to embrace fully.

The contractors who succeed on Yelp share specific characteristics: they operate emergency services in urban markets, respond to leads within minutes, maintain strong review profiles above 4 stars, and track ROI meticulously.

For everyone else, the strategic approach is claiming and optimizing your free business page, focusing primary advertising budget on pay-per-lead platforms, and using Yelp’s free Request a Quote feature to capture organic leads.

The platform has evolved substantially with AI features and expanded programs, but the fundamental economics remain challenging. Evaluate it based on your specific trade, market, response capability, and existing review profile rather than accepting marketing claims or dismissing it based on others’ negative experiences.

Automate Your Yelp Lead Response

If you’re generating Yelp leads but struggling with response time, LeadTruffle’s Yelp auto-responder can help. It automatically qualifies and responds to Yelp inquiries within seconds, keeping conversations in one unified inbox alongside your website leads, missed calls, and other channels. Learn more about the Yelp integration.

The Complete Guide to Yelp for Home Service Contractors in 2026