Hear No Evil
P eople are talking on social media, and retailers would do well to listen — and then comprehend, assess and act.
Such is the specter of social sentiment — the chatter, opinions, observations, reactions and emotions floating around on social media networks like Facebook, Twitter, LinkedIn and YouTube, as well as on blogs and within comments sections. “Your customers are out there, and they’re talking about your products and services and your brand,” says Zach Hofer-Shall, a social intelligence analyst at Forrester Research.
“They have Twitter open, and they have Facebook open. They are just constantly talking about everything they do,” he says. “They are doing this as they are experiencing that brand.”
Failing to address social media sentiment can have risky ramifications. “The main consequence is nasty surprises,” says Trevor Davis, a London-based management consultant for IBM, one of a number of vendors offering technology tools for aggregating, categorizing and analyzing social sentiment.
“The biggest risk ... is things creeping up on [retailers] very quickly and not having enough time to respond,” Davis says.
When Susan G. Komen for the Cure announced in January that it was pulling grants from Planned Parenthood, the social sphere blew up – at one point during the controversy, mentions of the issue on Twitter were averaging some 3,000 an hour, most of them negative, according to The New York Times.
Like Komen, large retailers can easily elicit several thousand mentions of their brand each month across social media. The merchant’s brand, is, in effect, its “value proposition,” and that brand must be protected at all costs to prevent long-term erosion and the potential for lost sales, says Carol Mackenzie, a programs principal for SAP Retail.
“There are a myriad of things that can come under a brand umbrella that the retailers have to pay attention to and listen to,” she says.
According to Mackenzie, “dings” to a brand via social sentiment can come from any number of areas, from the store and channel experience to the quality of merchandise to customer service. If a store’s restrooms are unkempt, for instance, that might spark an outcry of emotion over social media, she says.
Forrester Research’s Hofer-Shall likens social media conversations to a be-careful-what-you-wish-for conundrum. Companies have become diligent about soliciting their customers’ feedback to enhance product and service offerings, he says, but conducting surveys or assembling focus groups are a far cry from unabashed customer sentiment.
“All of a sudden now, customers are openly, publicly sharing this information. That offers a huge opportunity for retailers to collect this information and to learn from their customers,” Hofer-Shall says. But “there’s also the potential risk of customers sharing this information with their connections and the rest of social media in the public domain.”
A blog posting on the website of opinions-powered platform Appinions notes that the digital world virtually forces brands, organizations and individuals to relinquish control of their reputations, so “you have to find a way to keep a modicum of control.”
That is where fast-developing technology tools provide retailers with opportunities to get a handle on the sentiment swirling around them, according to social media experts and technology vendors.
Market research firm International Data Corp. puts the business analytics software market at $33.9 billion in 2012, an increase of 8.2 percent from 2011. The market includes a number of applications related to capturing and analyzing data, including from social media.
Lori Schafer, executive advisor for retail for business analytics vendor SAS Institute, says retailers today must embrace enterprise-wide solutions to address social media and its impact. The days of an organization just going up with Facebook pages, Twitter feeds or YouTube channels and calling that a social media strategy have passed by quickly, says Schafer, co-author of Branded! How Retailers Engage Consumers with Social Media and Mobility.
Social media and the sentiment it generates is much more than a marketing play for retailers. “Retailers in general must become more analytical .... All of a sudden so much data in every part of their organization is available,” Schafer says. “It is a competitive disadvantage if, at this point in time, they are not becoming far more analytical throughout the organization — customer service, merchandising, marketing, store operations, human resources.”
Some forward-thinking retailers are using social media strategically to advance customer loyalty through the concept of “crowdsourcing” ideas, she says – essentially, obtaining sentiment information from the general public about specific topics. MyStarbucksIdea offers a prime example. The campaign, which had more than 30,000 Twitter followers in February, invites users from across social media and through a dedicated, blog-like website to “share, vote, discuss ideas and see them in action.”
Understanding social language
T im Hood, vice president and chief solution architect with SAP, which markets its social media analytics platform with NetBase Solutions, says the best technology tools for social sentiment will detect, rather than simply search for, sentiment.
“It doesn’t just find the positive or negative, but [also] the subjects or insights that people are positive or negative about,” Hood says. “The tools help you identify those areas. There may be themes that are in the negative domain that may be different than themes in the positive domain.”
For retailers, social sentiment platforms can perform a number of functions, including monitoring market reaction to product launches; quantifying market perceptions; identifying strengths and weaknesses of competing products; tracking the results of promotional campaigns; and uncovering trends in consumer preferences, according to SAP and NetBase.
In addition, Hood says, the key to understanding social sentiment is understanding the language spoken on social networks. Words and terms like “kewl,” “ttyl” and “gr8” will appear prominently on social media, but not in dictionaries. And a word like “sick” in social media actually may have a positive connotation.
What retailers often get from sentiment analysis tools is an understanding of the “passion intensity” for brands, products and services, says Lisa Joy Rosner, chief marketing officer for NetBase. That passion can manifest itself in the language commenters use.
While sentiment analysis can help retailers and organizations detect storm clouds affecting their brands, Rosner says retailers can use the practice proactively when combined with broader enterprise data to further their quest for a greater share of customer wallet.
Consumers aren’t always deciding between two category competitors, but “whether to buy a new hair accessory or a cup of coffee,” she says, and sentiment analysis lets retailers examine the drivers that motivate shoppers to purchase items. “They can uncover insights around something that drives people to impulse buying and capture and include it in the promotions and campaigns they use to drive people to their stores.”