Is Yelp Worth It for Home Service Companies

Yelp handles roughly 3-5% of local home service searches in the United States. Google handles 87%. Yet Yelp’s sales team calls contractors relentlessly, pitching advertising packages that start at $300/month and scale to $1,500+ for competitive markets.

The math alone should make you pause. You’re paying premium advertising rates on a platform where the vast majority of your potential customers will never look for you.

What Yelp advertising actually costs

Yelp’s advertising model works on a CPC basis, similar to Google Ads. But the pricing is less transparent and harder to control.

Average CPCs for home service businesses on Yelp range from $10 to $30. Plumbing and HVAC keywords sit at the higher end. General handyman and cleaning services fall toward the lower end.

Yelp’s minimum ad spend starts at $150/month in small markets and climbs to $300-500/month in metros. Their sales reps push for higher commitments, often pitching $1,000-1,500/month packages with 12-month contracts.

At a $20 CPC and a $500/month budget, you get 25 clicks. At Yelp’s reported 4-6% conversion rate for home service ads, that’s 1-2 leads per month. Your cost per lead lands at $250-500 before you’ve booked a single job.

Contractors on Reddit and ContractorTalk frequently share Yelp horror stories. One HVAC contractor reported spending $1,600 over 3 months on Yelp advertising and booking exactly zero jobs from the platform. A plumber in another thread spent $2,000 in 90 days with similar results — plenty of clicks, zero conversions to paying customers.

Compare that to Google Ads, where the same $500 produces 5-7 leads at the typical 7-8% conversion rate for home service landing pages. Or Google LSAs, which deliver leads at $40-85 each with no minimum spend commitment.

The free listing vs. paid advertising decision

Every contractor gets a free Yelp Business Page. The question is whether paying for enhanced features and ad placement justifies the cost.

Your free listing includes: basic business info, the ability to respond to reviews, photos, and a link to your website. Homeowners searching on Yelp can find you, read reviews, and contact you without you spending a dime.

Paid advertising adds: placement at the top of search results, ads on competitor pages, removal of competitor ads from your own page, a call-to-action button, a slideshow banner, and a verified license badge.

That last point matters more than the others. Yelp places competitor ads directly on your free business page. A homeowner reads your five-star reviews, scrolls down, and sees an ad for a competing plumber. Paying for Yelp advertising is partly paying to remove competitor ads from your own profile.

This is Yelp’s most effective sales tactic. They show you competitor ads running on your page and ask if you’d like to remove them. Many contractors feel cornered into paying just to stop leaking leads to competitors from their own listing.

Yelp’s review filter controversy

Yelp’s recommendation software filters out 25-30% of legitimate reviews across all businesses. For home service companies, the filtering can be even more aggressive.

Yelp’s algorithm decides which reviews to “recommend” (show prominently) and which to suppress (hidden behind a “not currently recommended” link that few consumers click). The criteria include reviewer account age, review frequency, and other undisclosed signals.

Contractors consistently report a pattern: positive reviews from first-time Yelp users get filtered more frequently than negative reviews. A happy customer who creates a Yelp account specifically to leave you a five-star review often sees that review suppressed within weeks.

The practical impact is significant. A contractor with 40 total reviews might show only 28 recommended reviews. If 8 of the 12 filtered reviews were five-star ratings, your displayed average drops from 4.7 to 4.4 stars. That 0.3-star difference reduces click-through rates by an estimated 10-15%.

Yelp denies any connection between advertising and review filtering. But a 2022 FTC study found that businesses stopping Yelp advertising saw their positive reviews filtered at higher rates within 90 days. Whether this is algorithmic coincidence or intentional pressure remains debated, but the pattern is documented enough that you should factor it into your decision.

A contractor on ContractorTalk described watching 4 out of 5 legitimate five-star reviews get filtered within two weeks of canceling his Yelp advertising. His visible review count dropped from 34 to 22, and his displayed rating fell from 4.7 to 4.3. He called it “the Yelp tax” — a pattern that multiple contractors in the thread confirmed experiencing.

Your review strategy should prioritize platforms you control. Read our breakdown of Google Reviews vs. Yelp for a direct comparison.

Lead quality from Yelp

Yelp leads aren’t bad. Homeowners on Yelp are actively researching service providers and reading reviews. That puts them further down the purchase funnel than a random Facebook ad viewer.

Yelp leads close at 15-20% for most home service businesses. That’s lower than Google Ads (25-35%) but higher than social media (5-12%). The homeowner did some research before contacting you, which means they’re somewhat serious.

The problem is volume. With only 3-5% of home service searches happening on Yelp, the total addressable market is small. Even if you dominate Yelp in your market, you’re fishing in a pond while Google is the ocean.

A plumber in a metro area of 500,000 people might get 8-15 Yelp leads per month from a $750 ad spend. That same budget on Google produces 15-25 leads. At the local level, Yelp’s smaller audience means a hard ceiling on how many customers the platform can deliver.

A plumber on Reddit described Yelp as “paying to rent a storefront on a street nobody walks down.” In his market (suburban Midwest, city of 180,000), Yelp generated 3 leads per month at $750/month in ad spend. The same budget on Google LSAs produced 18 leads. He canceled Yelp and redirected the entire budget to Google within 60 days.

The contract problem

Yelp’s advertising agreements typically lock you into 3, 6, or 12-month contracts. Breaking the contract early incurs penalties. This is a significant difference from Google Ads, where you can pause or cancel with no commitment.

The contract structure means you can’t easily test Yelp for a month and walk away. You’re committing $3,600-18,000 before you know whether the platform works for your business and market.

67% of contractors who sign Yelp advertising contracts report dissatisfaction with lead quality or volume by month three. But they’re locked in for the remaining months, spending money on a channel that isn’t performing.

Multiple threads on r/smallbusiness describe Yelp’s sales tactics as aggressive. One contractor reported receiving 3-4 calls per week from Yelp sales reps after requesting to cancel. Another described being told his negative reviews would be “looked at” if he increased his ad spend — a claim Yelp officially denies but that appears in contractor forums repeatedly.

If Yelp’s sales team approaches you, insist on a month-to-month agreement. If they won’t offer one, that tells you something about their confidence in delivering results that make you want to stay voluntarily.

When Yelp advertising makes sense

There are specific scenarios where paid Yelp delivers reasonable ROI.

Markets where Yelp has strong adoption

Yelp usage varies dramatically by city. San Francisco, New York, Los Angeles, Chicago, and Boston have Yelp adoption rates 3-4x the national average. In these markets, Yelp captures 8-12% of local service searches instead of the national 3-5%.

If you operate in a major coastal metro where Yelp is culturally embedded, the platform has enough users to justify ad spend. A plumber in San Francisco can generate 20-30 Yelp leads per month because the local population actually uses the platform.

Businesses with 50+ positive reviews

Yelp’s ad placement favors businesses with strong review profiles. If you have 50+ recommended reviews and a 4.5+ star rating, your ads convert at higher rates because the social proof is already established.

An ad for a contractor with 8 reviews and a 3.8 rating converts at roughly 2-3%. The same ad for a contractor with 120 reviews and a 4.8 rating converts at 6-8%. The reviews do the selling. The ad just gets you visibility.

If your review count is low, invest in building your Google Business Profile before paying for Yelp ads. Reviews are the foundation. Ads without reviews are expensive impressions that don’t convert.

Niche services with low Google competition

Specialty trades like chimney sweeping, pool service, or septic tank maintenance sometimes find less competition on Yelp than Google Ads. CPCs for niche services on Yelp can drop to $5-8, making the cost per lead competitive with other platforms.

If your trade doesn’t attract heavy Google Ads bidding from PE-backed competitors, Yelp’s lower auction pressure might work in your favor.

When Yelp advertising doesn’t make sense

Small and mid-size markets

In cities under 200,000 people, Yelp adoption is often too low to generate meaningful lead volume. You might get 2-3 leads per month from a $500 ad spend. At $167-250 per lead with a 15% close rate, you’re paying $1,100-1,650 per booked customer.

That acquisition cost only works for high-value jobs like full HVAC replacements or major remodels. For standard service calls, the math collapses.

Contractors without a strong review base

Paying for Yelp ads before you have at least 30 recommended reviews is like buying a billboard for a restaurant with no food. The visibility doesn’t help when the proof isn’t there.

85% of Yelp users read reviews before contacting a business. If your profile shows 6 reviews and a 3.5-star average, paid placement won’t overcome that credibility gap. The ad spend amplifies a weak profile instead of a strong one.

Businesses already maxing out Google channels

If you’re spending $3,000/month on Google Ads and getting 30+ leads, adding $500-1,000/month to Yelp doesn’t make as much sense as increasing your Google budget or investing in organic search. The incremental leads from Yelp don’t move the needle when Google is already delivering volume.

What to do instead of paying for Yelp

Your Yelp Business Page exists whether you pay or not. Optimize it for free.

Claim and complete your profile. Add photos of completed work, respond to every review within 24 hours, update your service list and business hours, and add your license and insurance information.

97% of Yelp visitors make a purchase decision, but 51% of those purchases happen within a single day. For contractors, this means your free Yelp profile matters — people who find you there are ready to hire. The argument for paying Yelp to boost visibility is weaker because the organic profile already captures high-intent searchers.

Focus your ad budget on platforms with more traffic. Google captures 87% of local search. Google Business Profile optimization is free and reaches 17x more homeowners than Yelp. Google LSAs charge per lead, not per click, and have no long-term contracts.

Build your own lead pipeline. Every dollar spent on Yelp advertising rents attention on someone else’s platform. When you stop paying, the leads stop. Investing in your own website, SEO, and reputation builds an asset you own permanently. Read our analysis on paying for leads vs. owning your pipeline for the full breakdown.

Compare Yelp’s costs to other lead sources in our lead marketplace comparison. The data shows where your dollar goes furthest by trade and market size.

How to evaluate your Yelp ROI

If you’re already advertising on Yelp, here’s how to determine if it’s working.

Track cost per booked job, not cost per lead. Divide your total Yelp ad spend (including any contract fees) by the number of jobs you booked from Yelp leads in the same period. If you’re spending $750/month and booking 2 jobs, your cost per customer is $375.

Compare to other channels. What does a customer cost you through Google Ads? Through referrals? Through organic search? If Yelp customers cost 2-3x more than Google customers, the budget is misallocated.

Calculate the break-even point. Your average profit per job minus your cost per Yelp customer equals your net profit per Yelp-sourced job. If that number is zero or negative, Yelp advertising is a loss center regardless of how many leads it generates.

Watch for contract renewal pressure. Yelp’s sales team starts pushing renewals 60-90 days before your contract ends. Have your ROI data ready so you’re making a numbers-based decision instead of responding to sales pressure.

The bottom line on Yelp advertising

Yelp advertising works for a narrow segment of home service businesses: those in major metros with strong review profiles, high average job values, and the budget to commit $750+/month for at least six months.

For everyone else, the free listing is enough. Optimize it, respond to reviews, add photos, and focus your paid advertising budget on platforms where your customers actually search.

87% of homeowners start on Google. That’s where your advertising dollars produce the most booked jobs per dollar spent. Yelp is a supplement at best and a money pit at worst. Your marketing budget has better places to go.