Sentiment analysis makes use of Natural Language Processing and Machine Learning to identify hidden emotion in customers’ interactions across channels such as social media, emails, chat, and voice. It is vital for modern businesses as they use it to understand their customers’ grievances, needs, and complaints, and accordingly plan strategies to deliver tangible results.
This analysis is carried out using Natural Language Processing as well as Machine Learning techniques to evaluate text data and discover the hidden sentiment. Companies collect customers’ feedback through emails, social media platforms, surveys, and customer reviews, and the text data is used to carry out sentiment analysis. This further helps them to gain insights into how customers feel about their products or services through their positive, negative, or neutral feedback.
How is Sentiment Analysis Useful for Companies?
Businesses in the digital era need to understand their customers’ feelings, and hence they take the help of sentiment analysis to monitor audience opinion, gauge public satisfaction, and proactively react to customers’ perceptions. It is extremely important for businesses to have knowledge about their customers’ emotions, as it will help them decide future action. Businesses that evaluate their marketing and communication strategy should be aware of how their audiences are feeling about their products, services, or brand. Sentiment analysis holds great significance for companies in the following ways:
- Sentiment analysis allows businesses to identify their strengths and weaknesses through their customers’ feedback on social media or reviews posted in the comments section.
- This analysis helps businesses understand their customers’ feelings to determine the hidden opportunities or to identify risks before they escalate.
- Sentiment analysis is useful for businesses, as the online monitoring of customers’ sentiments allows them to boost brand perception and improve marketing strategies.
- Sentiment analysis plays a significant role in tracking customers’ opinions in real-time and determining insights into customers’ behavior, market trends, and product demand, which further help businesses to accordingly plan their act.
Sentiment Analysis Offers Cost-Saving Opportunities to Companies
Sentiment analysis not just holds significance for knowing customers’ opinions toward a brand or its products and services, but the feelings of existing customers also impact the decisions and perceptions of potential customers. This further enables businesses to make sound decisions related to their products or services, which further saves their money and ensures that resources are timely and aptly allocated. Businesses can make use of sentiment analysis to optimize cost:
- Quick Identification of Pain Points – Businesses make use of sentiment analysis to identify concerns, grievances, and complaints consistently voiced by their customers across multiple channels. The quick identification of pain points allows businesses to smoothly resolve the underlying issues, such as website glitches or recurring billing errors, before these escalate and cause problems for customers. With the swift correction of problems, chances are that fewer customers will be disappointed, and the likelihood of receiving negative reviews will gradually reduce, which will also lead to more positive reviews and more business.
- Better Customer Satisfaction – Businesses make use of sentiment analysis to determine emerging trends in customers’ sentiments across different channels. This helps businesses to proactively handle dissatisfaction shown by their customers, as they can quickly handle issues like service outages or stockout issues. Businesses can either inform about such issues in advance or suggest some alternative solutions. By meeting their customers’ expectations, businesses will boost their customer relationships, as customers prefer to deal with companies that meet their expectations.
- Optimize Promotional Expense – By knowing their customers’ feelings toward their products and services, businesses can plan their promotional campaigns for the right audiences. Businesses make use of sentiment analysis to discover the segment of customers that is satisfied with the brand and is likely to engage with the company’s promotional endeavors. This will allow businesses to accordingly plan their promotional stint for the receptive audience. Businesses can reduce promotional expenses by targeting their promotional campaign toward customers who are likely to become their potential customers.
- Identify Emerging Trends – Sentiment analysis allows businesses to gain significant insight into market trends, along with competitors’ performance. This allows them to determine preferences and choices of the customers and identify potential gaps in the market. Businesses make use of this to benchmark their performance against their competitors and to know their customers’ perspective about their brand and products.
- Inventory Management – Businesses make use of sentiment analysis to enhance inventory management by gaining insights into customer preferences and demand trends. By knowing customers’ feelings about their specific products or services, businesses are able to accurately predict demand for them. Positive review about a specific product indicates increased future demand and hint to businesses to stock up accordingly on that product. Negative customer reviews allow businesses to avoid stocking that product, as that may not sell well among customers.
Sentiment analysis is an AI-powered omnichannel service model that has become the new norm for businesses that are using it to decode real-time customer emotion, discover hidden friction, and respond to customers with precision. A gap is emerging between the companies’ thinking and customers’ feelings, which creates a disconnect between them, causing a risk to revenue, reputation, and retention. This gap is aptly filled by sentiment analysis that makes use of AI to detect customers’ mood, tone, and intention in real-time, showcased across channels like chat, email, and social media platforms. Businesses are able to discover frustration or acknowledgement of their customers and accordingly tailor responses with empathy at scale.
