Sentiment analysis is a subset of natural language processing, the computational approach to understanding written or spoken communication. SA helps to detect how positive or negative are people’s opinions are in general about a topic by classifying words. Using SA in marketing helps companies understand what customers think about their product and how they can improve future decisions.
SA of online customer reviews is versatile for brands to find out what their customers think about them and why some people love and others hate a certain product or service. A research study found that there are four main reasons why sentiment analysis is useful in marketing:
- it can give valuable insights into how to improve customer experience;
- it can be used for targeted advertisement;
- it can provide valuable data about consumer trends, and;
- it provides a valuable alternative source of market research.
The most common method in sentiment has been lexicon-based, which finds patterns based on the presence or absence of certain words. But this method is too simplistic; it can not detect sentiment in situations where word choice is very important (for example, sarcasm). Other methods like review-based methods, which use an algorithm to score reviews based on their semantic content, tend to be more useful.
Companies are using SA in marketing to determine what is most important to their customers and how they can improve their customer service to provide what people are looking for. A research study found that positive sentiment analysis has been used by companies to determine if marketing strategies are effective, companies have used negative SA to find out why there are problems with certain products or services, and neutral sentiment analysis has been used for general market research and to find out what products and services people are looking for.
There is a case study of an app called “Superbetter,” designed by Jane McGonigal, which uses the principles of positive psychology and game design to help motivate people in their everyday lives. The app uses positive sentiment analysis to determine how well the user is doing in the game and if they need a boost. To increase positive SA, users gain badges for continuing with their goal of being more optimistic. When they are questioned by “Superbetter,” there can be multiple choice questions with different optimism levels that will determine whether or not users receive the badge.
Many different marketing strategies can use SA, such as: targeting specific demographics, finding out what customers want and why they want it, which helps companies make a competitive edge by producing higher quality products and making social media more targeted.
Companies can determine which demographic they would like to target based on their sentiment, and they can use this to create advertisements. For example, if a company finds out that their customers like an advertisement about pets, they can make more of these specific advertisements and put them in magazines and newspapers focused on the demographic.
Companies also find out what customers want based on SA; for example, companies may know that their customers are looking for a more environmentally friendly product. Based on this new information, companies can increase production of the more eco-friendly products and market these more heavily.
To have a competitive edge, companies use SA to see what their competitors are doing, and they can use it as inspiration or as a foundation for their marketing strategy. This happens because many companies have access to social media sentiment analysis tools that they can use to find out what their customers are saying about them. Based on what they learn from these sources, they can determine how to market themselves better.
In conclusion, SA is a valuable market research tool, and it provides insight into how companies can improve their customer service based on the needs of their customers.