How Krunch went Yelp
A small little wine school in Chicago got a whole lot of attention back in 2012. It showed how social media could destroy a small business. The story is worth knowing.
It starts with Master Sommelier (and runner up in the International Silly Name Contest) Krunch Kretschmar, who unwittingly discovered how to build a virtual nuclear warhead with nothing but social media.
Groupon at a Wine School
Krunch owns Bottled Grapes, a tiny wine school in Chicago. He recently opted to do a Groupon promotion. That alone was a bit crazy since there is a growing amount of proof that a poorly conceived Groupon promotion can bankrupt a small business.
For his Groupon, he sold $35 tickets for $17.50 each. Since Groupon takes 50% of the revenue of each sale, that means Krunch earned $8.75 per ticket. At that price, he was losing money for every Groupon sold, and there were over three thousand of these deals sold. Since he only offers an average of four classes a month, he was looking at loosing money for a few years. That sucked, big time.
Yelpers at a Wine School
Add to the mix a Yelper. Yelp is a powerful thing. Yelp and its aggregated reviews are widely trusted as a barometer of quality. Large businesses will have hundreds of reviews, so a single review won’t affect them.
However, a single bad review can cause major damage to a business with less than ten reviews, thousands of dollars of lost sales to a small company. That is the type of power that should be handled carefully and gently. Unfortunately, the power of Yelp is largely wielded by the most callous groups in America: affluent white twenty-somethings.
It’s Always Customer Support
So, the Yelper in question, Cecelia Groark, bought a Groupon. She didn’t like the customer support she received, so she left a scathing Yelp review. If facing bankruptcy via Groupon wasn’t enough, now Krunch’s reputation was tarnished, too. Yelp plus Groupon is a volatile mix, that’s for sure: it can implode a business in a few short months.
How Not to Deal With a Bad Yelp Review
What turned this from a sad tale to a nuclear chain reaction was Krunch himself. He figured out the identity of the Yelper, and engaged in the type of payback every small business owner dreams of, but never does: he struck back.
He created a blog under her name, and according to the Chicago Sun-Times he “accused her of ’embezzling’ from her employer, of having a drug addiction, and of “turning to the oldest profession to gain funds need[ed] to support her habits.”
And The End of a Wine School
Unfortunately for Krunch, he seems to be something of a dumbass. After creating the blog (which included her cell phone number), he emailed a link to Ms. Groark. He was then facing a half-million-dollar lawsuit. How that ended up, we don’t know.
In the end, Yelpers trashed his reputation. The school limped on until 2015 before closing. While Krunch “I hope to God your middle name isn’t Kris,” Kretschmar is not much of a protagonist, this is one of those stories that every small business owner should take notice of.