What AI Gets Wrong About Local Businesses (and How to Fix It)

Quick Summary

AI tools like ChatGPT, Gemini, and Bing Copilot sometimes misrepresent or completely miss local businesses. The problem isn’t that the AI is broken; it’s that it doesn’t have enough clear, current and consistent information to work with. When these models are uncertain about your business signals, they play it safe and recommend a competitor whose data is more complete and verified. This article explains the most common mistakes AI tools make about local businesses and provides simple steps to fix them so you’re represented accurately and confidently.

The Real-World Problem

Consider this common scenario: You run a reputable salon—high reviews, busy weekends, loyal customers.

Then a new client says:

"I asked ChatGPT for the best salons near me and yours didn't show up at all."

You check it yourself: "Recommend good hair salons near me."

Your business is not listed.

Meanwhile, a competitor with fewer reviews appears instead.

Another recommendation is for a salon that closed two years ago.

This isn't uncommon. We've documented:

• Medspas listed under incorrect treatment categories

• Restaurant hours shown inconsistently (old vs. new times)

• Therapists shown in wrong neighborhoods

• Home service businesses skipped despite hundreds of reviews

• Closed businesses still appearing in recommendations

It's not personal. It's not your service quality. It's an information problem. And it's completely fixable.

What We Discovered When Studying AI Mistakes

Here are the clearest patterns we observed while testing how AI recommendations work:

Insight #1: AI Sometimes Recommends Businesses That Are Closed or Severely Outdated

Why this happens:

AI tools sometimes reference old directories, static listings, or information that hasn't been refreshed in months. They're slower to detect business closures than Google search.

Real-world examples we saw:

• Closed restaurants still suggested as "Top Italian near me"

• Dentist offices under old owner names

• Businesses that rebranded never reflected in AI answers

• Salons that relocated showing old addresses

So what?

If your competitor's information isn't current everywhere, they might appear ahead of you. But worse: if your information is outdated, you might lose visibility entirely.

Now what?

Keep your Google Business Profile, Bing listing, and review profiles regularly updated with current information.

Insight #2: AI Gets Confused When Your Business Details Differ Across Platforms

Examples we found:

• Website says "Suite 200," Google says "Suite 20"

• Hours differ between Google Business Profile and Yelp

• Yelp uses an old phone number

• Apple Maps lists a previous location

• Service categories inconsistent across platforms

So what?

AI tools see inconsistency as a signal of unreliability. When platforms contradict each other, AI loses confidence and either downranks you or skips you entirely. This is one of the biggest causes of invisibility.

Now what?

Audit your presence across all major platforms and standardize every detail (address format, phone, hours, services).

Insight #3: AI Misunderstands What Many Businesses Actually Offer

Examples we documented:

• A waxing studio listed as a "hair salon"

• A chiropractor miscategorized as "massage therapy"

• A family dentist marked as "cosmetic dentistry only"

• A medspa missing half its available treatments

• A therapy practice listed only for anxiety (they also treat depression, trauma, etc.)

So what?

If AI can't understand your actual services, it won't recommend you for the right queries. A client searching "cosmetic dentistry" might find you, but searching "family dentistry" won't.

Now what?

Clearly list all services on your website, Google Business Profile, and Yelp. Use service category fields whenever available.

Insight #4: AI Struggles When Websites Lack Clear, Plain-Language Explanations

The problem:

Most SMB websites prioritize brand storytelling and design. AI needs something different: clarity.

AI specifically looks for:

• Clear service names (not branded jargon)

• Simple descriptions (not marketing copy)

• Straightforward location information

• FAQ-style Q&A format

Examples:

Website says: "Holistic wellness transformation through integrated therapeutic modalities"

AI reads this as: vague, unclear

Website says: "We offer family dental care, cosmetic dentistry, and emergency services in Seattle's Ballard neighborhood"

AI reads this as: clear, trustworthy

So what?

Without plain language, AI models "guess" based on partial information from reviews and other platforms—and often guess wrong.

Now what?

Update your website's main heading and "About" section to use clear service names and straightforward descriptions.

Insight #5: Missing or Incomplete Bing Listings Cause Major Visibility Gaps

Pattern we found repeatedly:

• Missing Bing search presence → Missing from ChatGPT recommendations

• Incomplete Bing data → AI doesn't "know" you exist

• Even strong businesses (250+ reviews) were skipped because Bing signals were absent or outdated

So what?

Bing is central to how ChatGPT finds and understands local businesses. A missing Bing presence means ChatGPT often can't find you at all.

Now what?

Verify your business appears in Bing search results and that your information there is current.

Insight #6: AI Tends to Recommend Businesses with Fresh Reviews, Not Just High Ratings

Patterns we observed:

• A business with 250 reviews but none in 18+ months was ignored

• A business with 40 recent reviews (past 90 days) was recommended more frequently

• A 4.2-star business with fresh reviews outranked a 4.8-star business with old reviews

So what?

AI interprets review freshness as a signal of activity and relevance. Old reviews suggest an inactive business, even if the business is thriving.

Now what?

Develop a consistent strategy to gather 3-5 reviews per month. Fresh feedback constantly updates AI's understanding of your business.

Want to know what AI currently gets wrong about your business?

Request a Free Audit

The 7 Most Common AI Mistakes About Local Businesses

Here are the specific errors we documented most frequently:

1. Recommending Permanently Closed Businesses

The mistake: AI suggests a business that no longer operates.

Why it happens: AI references old directories or static listings. Search engines are slower to detect closures than you'd expect.

Real impact: Your customer wastes time contacting a closed location, then loses trust in AI recommendations (and by extension, might not trust yours).

Fix: Ensure "Closed" is clearly marked if temporarily closed, and close your Google Business Profile properly if you've permanently shut down.

2. Linking to Wrong Websites or Outdated URLs

The mistake: AI attaches incorrect information to your business name, sending customers to:

• An old domain

• An expired landing page

• An old Yelp page

• A previous owner's information

• Unrelated businesses with similar names

Why it happens: Mismatches across your web footprint. If your website, Google Business Profile, Yelp, and other listings show different URLs, AI gets confused about which is canonical.

Real impact: Customers click through and land on confusing or irrelevant pages, abandoning the inquiry.

Fix: Ensure your website URL is identical and current across Google Business Profile, Bing, Yelp, Apple Maps, and all directory listings.

3. Misunderstanding Your Services or Categories

The mistake: AI assigns you to the wrong service category or misses entire service offerings.

Why it happens:

• Services aren't clearly listed on your website

• Service keywords aren't consistent across platforms

• Reviews don't describe your actual offerings

• Category selections on platforms are incomplete

Real impact: Clients searching for specific services won't find you. A therapist offering EMDR isn't recommended for "EMDR therapy" searches if the service isn't clearly documented.

Fix:

• List all services explicitly on your website

• Fill out all available service category fields on Google Business Profile and Yelp

• Use consistent terminology (not jargon) across all platforms

4. Mixing Up Neighborhoods or Service Areas

The mistake: AI places you in the wrong neighborhood or doesn't understand your service area.

Why it happens: Common in cities with overlapping ZIP codes, multiple service zones, or similar business names across neighborhoods.

Real impact: "Best [service] in Ballard" doesn't include you if AI thinks you're in Fremont. "Near me" searches miss you if your location is unclear.

Fix:

• State your neighborhood explicitly on your website ("Seattle's Ballard neighborhood")

• Ensure your address is precise and consistent everywhere

• Add service area information to your Google Business Profile

5. Confusing Similarly Named Businesses

The mistake: AI mixes you up with another business sharing a similar name.

Examples we tested:

• Two medspas with similar names in the same county

• Restaurants with nearly identical names

• A dental group's old branding still appearing

• Same business name but different locations

Real impact: AI attributes reviews, information, or location to the wrong business. You might get confused with a competitor's poor review, or your competitor gets your positive reviews.

Fix:

• Ensure your business name is consistent and unique

• Check Google Business Profile for accuracy

• Monitor your business listings for duplicates or errors

• Claim all your listings and verify ownership

6. Using Outdated Reviews to Form Recommendations

The mistake: AI pulls old reviews or outdated service information to make recommendations.

Why it happens: Reviews are cached and used to understand your business. Old reviews might describe services you no longer offer, outdated specialties, or now-resolved complaints.

Real impact: Potential customers see outdated information and assume it's still accurate. Resolved problems resurface.

Fix:

• Gather fresh reviews consistently (3-5 per month)

• Respond to old reviews professionally to add context

• Update your services so new reviews reflect current offerings

7. Skipping Businesses with Unclear or Missing Bing Data

The mistake: AI completely omits you from recommendations because Bing signals are absent or unclear.

Why it happens: This is one of the biggest reasons AI models skip good businesses. Bing is central to how ChatGPT finds and validates local entities.

Real impact: You're invisible in ChatGPT recommendations despite strong reviews and a good business.

Fix:

• Verify you appear in Bing search results

• Ensure your Bing business information is complete and current

• Check that your Google Business Profile is verified (helps Bing see you)

Why These Mistakes Happen: The Core Reasons

Reason 1: AI Doesn't Crawl Constantly Like Google Does

Unlike Google Search, which crawls continuously, AI models refresh their understanding of local businesses more slowly. Updates can take days or weeks to propagate.

What this means: Your information needs to be correct everywhere at once. You can't rely on AI eventually "figuring it out."

Reason 2: AI Trusts Consistency Over Everything

When platforms show conflicting information, AI assumes high risk. Inconsistency signals unreliability to the model.

What this means: A single inconsistency (address format, phone number, hours) across platforms can cause AI to downrank or skip you entirely.

Reason 3: AI Works From Data Patterns

AI needs enough consistent, clear mentions of your business to build confidence. If your business is mentioned only once or twice, the model lacks patterns to work from.

What this means: Being listed in one place isn't enough. You need presence across multiple platforms.

Reason 4: AI Avoids High-Risk Recommendations

Recommending the wrong place damages AI credibility. Recommending nothing is safer than recommending incorrectly.

What this means: When AI is unsure about your business signals, it plays it safe and skips you.

What This Means for Your Business

Here's the straightforward translation:

• If your information is scattered across platforms: AI won't piece it together. It will skip you.

• If your reviews aren't recent: AI assumes you may be inactive or declining in quality.

• If your Bing listing is missing or incomplete: ChatGPT may not "know" you exist, even if you're on Google.

• If your services aren't described clearly: AI cannot map you to customer queries correctly.

• If directories show conflicting details: AI loses confidence and defaults to competitors with clearer signals.

The core truth: Most AI mistakes boil down to missing clarity and consistency. The good news? This is entirely fixable with the right steps.

Key Takeaways So Far

• AI is not intentionally wrong — it's under-informed or confused by inconsistent data.

• Small errors across your digital footprint lead to big visibility losses.

• Fixing consistency and clarity massively reduces AI mistakes.

• Fresh reviews, clear website content, and updated listings make the biggest difference.

• You can't control AI, but you can control the inputs AI uses to understand your business.

How to Fix the Most Common AI Mistakes (This Week)

Immediate Fixes (Do These First)

1. Update Your Google Business Profile and Verify It

• Claim and verify your GBP if not already done

• Update: hours, phone, address, website URL, services, photos

• Ensure information is current and matches your website

Time: 15-20 minutes | Impact: Direct visibility boost

2. Check You Appear in Bing Search Results

• Search your business name on bing.com

• Verify you appear in search results (not just Bing Maps)

• If not appearing, ensure your GBP is verified (helps Bing find you)

Time: 5 minutes | Impact: Critical for ChatGPT visibility

3. Rewrite Your Website's Main Heading

• State clearly: what you do, where you are, key services

• Example: "Family Dentistry in Seattle's Ballard | Preventive & Cosmetic Care"

• Remove jargon and brand-speak in favor of clarity

Time: 10 minutes | Impact: Major AI clarity signal

4. Add or Update Your FAQ Section

• Answer 5-10 common customer questions using plain language

• Examples: "What insurance do you accept?", "Do you take walk-ins?", "What areas do you serve?"

• AI prioritizes FAQ-style clarity

Time: 20 minutes | Impact: High-confidence AI signal

Medium-Term Fixes (This Week)

5. Audit and Fix Inconsistencies Across Platforms

Check these details match everywhere:

• Business name (exact spelling and format)

• Address (including suite/unit number, format consistency)

• Phone number (format: all digits, or 123-456-7890?)

• Hours (timezone clarity if relevant)

• Website URL (canonical, no redirects)

• Service categories and descriptions

Platforms to check: Google Business Profile, Bing, Yelp, Apple Maps, Facebook, any industry directories

Time: 30-45 minutes | Impact: High-confidence signals across all platforms

6. Complete Your Yelp and Apple Maps Listings

• Claim and fill out Yelp completely

• Claim and update Apple Maps

• Ensure all details match your GBP

Time: 15 minutes per platform | Impact: AI cross-reference signals

7. List All Your Services Clearly

• On your website: list each service explicitly

• On Google Business Profile: fill out all service category fields

• On Yelp: complete service offerings

• Use consistent terminology across all platforms

Time: 20 minutes | Impact: Prevents AI miscategorization

Ongoing Maintenance

8. Gather Fresh Reviews Regularly

• Aim for 3-5 reviews per month across platforms

• Ask customers to mention the specific service received

• Respond professionally to all reviews (shows activity)

Time: Ongoing | Impact: Constant freshness signal

9. Monitor Your Listings for Errors or Duplicates

• Monthly: Check Google Business Profile, Bing, Yelp for accuracy

• Look for duplicate listings or outdated versions

• Flag and claim any errors immediately

Time: 15 minutes monthly | Impact: Prevents mistakes from accumulating

Want a detailed diagnosis of what AI is currently getting wrong about your business?

Schedule a call today

Where Halospot Helps

Most small business owners don't have the time to audit all their listings, check for inconsistencies across 8+ platforms, and coordinate fixes. That's exactly what we built Halospot to do.

Here's how we address AI mistakes for local businesses:

• We scan how AI currently sees your business — identifying specific mistakes and gaps

• We check for inconsistencies across your digital footprint

• We fix your core listings — Google Business Profile and Bing

• We optimize your website's clarity — making sure it speaks to AI

• We help shape your review strategy — ensuring fresh, descriptive feedback

• We clean up citations across directories and platforms

• We show you the exact next steps to stay visible and accurate

The result: You get a clear picture of what AI gets wrong about your business—and a step-by-step plan to fix it.

Most business owners see corrections take effect within 2-4 weeks. Some improvements are visible within days.

[Start with a Free AI Visibility Audit]

FAQs

1. Why does AI get things wrong about my business?

Because it sees inconsistent, outdated, incomplete, or unclear information across the web. AI works from signals—when signals are weak or contradictory, it makes mistakes. Most mistakes are fixable by improving those signals.

2. Is fixing AI visibility the same as fixing SEO?

Not quite. SEO improves your visibility in Google Search. Fixing AI visibility improves your appearance in AI conversations and recommendations (ChatGPT, Gemini, etc.). They overlap—good practices help both—but they're distinct challenges.

3. How long does it take to correct AI mistakes?

Some corrections take days (fixing a Bing listing can show impact in 7-14 days). Others take weeks as information propagates across platforms. Most see meaningful improvements within 2-4 weeks.

4. Can I prevent mistakes from happening permanently?

Not completely, but consistent updates keep them rare and minor. Monthly monitoring of your key listings catches problems early before they become visibility issues.

5. Do all AI tools pull the same information?

They overlap but have different sources. ChatGPT relies heavily on Bing. Gemini uses Google data. Perplexity aggregates from multiple sources. Fixing core signals (GBP, Bing, website clarity) helps across all tools.

6. Do I need to be technical to fix any of this?

No. Most fixes are simple platform updates: changing your hours, adding a service category, updating your address. We handle any complex parts (schema, technical fixes) for you.

7. Does Halospot fix these mistakes for me?

Yes. Our audit identifies what's wrong, and our optimization service implements corrections across your listings, website, and directories. You can also do many fixes yourself—we just help you do it faster and more thoroughly.

8. How often should I check for AI mistakes?

Monthly is a good rhythm. Quarterly minimum. AI models refresh slower than search engines, but inconsistencies can accumulate over time. Regular audits catch problems early.