With advancement in technology and proliferation of social media platforms in day to day life, the gap between businesses and customers is gradually reducing. Sentiment Analysis is a tool that can further narrow down the gap by providing actionable insights from studying data generated by customers.
What is Sentiment Analysis?
Sentiment Analysis (SA), also known as opinion mining is a popular and well-known feature of text analysis. It uses techniques to analyze information regarding how customers are reacting to their products and services.
Sentiments refer to human attitudes, opinions, and emotions, which are qualitative objects. To identify the underlying tone of the expression, SA uses Natural Language Processing (NLP). Different types of SA use different methods to identify the undertone of a phrase. Broadly, there are major two types – subjective/objective identification and feature/aspect-based sentiment analysis. Subjective/objective identification classifies a phrase as either subjective or objective. It is context based. Whereas, Feature/aspect identification determines opinions or sentiments according to different aspects of an entity. This allows for a much more nuanced overview of sentiments.
What Are the Benefits of Leveraging Sentiment Analysis?
Today, social media covers a huge part of everyone’s life. They are increasingly becoming the platform of communication for every means. Businesses can effectively utilize this by carefully listening and monitoring consumers. To properly understand customer needs, it is imperative to leverage SA. SA can be used proactively to solve many business problems, some of which are as follows.
• With more advanced technologies and big data in the picture, SA can easily capture, quantify, retrieve and analyze consumers more effectively. SA can identify whether a phrase is positive, negative or neutral, which in turn can be used to determine a customer’s sentiment towards a brand or service. This helps the businesses to identify their strengths and weaknesses.
• SA can provide valuable insights and thus help organizations to formulate effective business strategies. It can help firms to monitor brand and product performances, handle customer grievances, get in-depth information for strategic analysis. SA can help to track and come up with effective marketing campaigns. The actual ROI of marketing campaigns can be estimated by evaluating positive and negative opinions and discussions among customers. SA has become the backbone of digital strategies for most firms today.
• With SA, product quality will also increase. Market research teams would be able to gauge consumer needs and preferences better. Ideas for product improvement can also be obtained from targeted customers. It can help to identify opportunities for up-selling, reduce customer churn, increase customer acquisition, improve customer retention and handle customer grievances.
• SA opens a whole new avenue and growth opportunity in terms of a new level of customer engagement and reputation management. Market shares of brands and products can be regularly monitored. Innovative need-based products can be delivered and built. Brand awareness and brand reputation can be monitored by monitoring customer sentiment in real-time and over time. It also helps to identify business problems before they aggravate in proportion. So, smart product and marketing strategies can be developed by keeping in mind the consumer needs. It can also be used for keyword monitoring for PR professionals.
• It can also help to identify new business opportunities. Specific phrases and texts of target audiences can be monitored to effectively generate new leads. Competitor performances can also be evaluated by monitoring mentions of the competing brands.
• It can also help to identify marketing campaigns that are not working well. Firms can then effectively modify or withdraw those campaigns. Such timely preventive actions help the brands to grow and prevent negative brand image. SA is not only limited to consumer likes, tweets, and posts but any content that is shared via social media and other platforms like blogs can be analyzed using SA techniques.
• SA has become the gateway to understanding consumer needs, extending customer base and expectations. It helps to pinpoint the problem and give solutions effectively. It can also help in customer segmentation by identifying segments that feel strongly about a brand or service.
Some Challenges in The Process
Any new technology should be harnessed properly to effectively utilize and enjoy its benefit. If companies are not well-equipped to take advantage of the new technologies, often, it can be quite misleading. Some challenges in leveraging SA are as follows.
1. The main basis of SA is the utilization of big data. Businesses need to possess enough data sources and volumes to leverage SA and get actionable insights. So, lack of proper data may lead to inefficient results.
2. The main problem of social media SA is to gauge the context. Opinions are often used in line with metaphors, irony, sarcasm. Often in colloquial terms negative and positive terms are used in the same sentence. In such cases, it becomes hard to identify the undertone of the statement and classify it as positive, negative or neutral. Moreover, technological capacity to identify various human emotions like anxiety, fear, is limited. However, over time, such challenges are deemed to decline.
Social media has not only become an integral part of our daily lives but also has become a valuable source of resource for businesses. With low costs, businesses are now able to gather actionable insights easily. From customer service to marketing, SA can improve everything. However, it should be kept in mind that no machine learning algorithm can provide an accuracy of 100% due to complexity and limitations of the technology. So, despite some of its limitations, SA has proven to be a valuable opportunity for businesses to grow.