Customer retention is an important issue for many businesses. Retaining customers is usually cheaper than acquiring them. Having a strong customer retention strategy can have a tremendous impact on business outcomes as a whole.
But what does it take to keep customers coming back? One solution that has been gaining popularity in recent years is sentiment analysis. This is an automated technique that allows organizations to gauge customer satisfaction. It analyzes their social media posts, reviews, and other digital conversations about your company.
In this article, we’ll explain some of the benefits of sentiment analysis and provide you with a few best practices for how to implement this little-known tool into your modern business strategy.
What is customer retention?
Customer retention is a technique that helps companies maintain relationships with existing customers (as opposed to acquisition, which is primarily focused on attracting new ones over time).
There are several ways to go about customer retention, depending on your company’s goals and current revenue. Manual methods are typically cost-prohibitive and can be difficult to implement. However, recently startups and mid-sized companies have been employing automated sentiment analysis tools. Which have proven particularly useful in pinpointing areas where customer satisfaction may need improvement.
What is sentiment analysis?
Sentiment analysis is a data-driven technique that helps companies understand how their customers perceive them. It determines the general feeling of an individual or group towards specific topics, events or other aspects related to your company. While sentiment analysis isn’t always 100% accurate, it can provide valuable insights into what you’re doing right and where there’s room for improvement. This can significantly speed up the review process and decrease costs.
In general, sentiment analysis can be divided into two separate categories: subjective and objective. Subjective approaches involve a person being asked to provide their own opinion on a certain topic or product; this could take the form of an automated review e-mail, or a customer survey form. Objective approaches rely more heavily on processing pre-existing reviews and applying analytics tools that measure data from sources like social media posts.
While both types of sentiment analysis can provide a valuable insight into customer satisfaction, it’s important to note that they should not be used alike.
In general, subjectivity is usually more reliable because human judgment remains an essential piece of the puzzle when trying to interpret data from social media and other sources.
In contrast, objective sentiment analysis relies on modern machine learning practices, and these can (at times) deliver a distorted view of customer sentiment.
We recommend using both types of sentiment analysis to achieve high accuracy rates. They should be combined together, rather than relying exclusively on one type.
The Importance of Sentiment Analysis
A study in 2013 showed that online reviews influenced 90% of customer decisions. Understanding your reviews in-depth thus allows you to better determine where customers stand regarding their overall satisfaction with your products or services. Automating this process through sentiment analysis can therefore be a significant boon to your business.
Sentiment analysis can also help you identify potential loyalty issues by providing a wealth of information that will show you where there’s room for improvement.
For example, customer retention solutions like Retention360 provide real-time monitoring. This allows companies to quickly adapt to changing business conditions and maintain a positive image in customers’ eyes.
With Retention360, you can track and analyze customer feedback from social media platforms. Such as Facebook and Twitter, comments posted on your official website or blog, customer reviews left on third-party websites like Yelp, Google Reviews, and more.
We’ve taken big steps towards implementing a robust semantic analysis system that operates in the background independently. Our goal is to give you strong customer insight without requiring intense technological know-how.
Sentiment analysis is a vital for any company looking to increase customer retention and loyalty by knowing what customers think about them.
Sentiment Analysis: Final Thoughts
If you’re looking for a way to improve the customer experience in a semi-automated fashion, sentiment analysis is the perfect toolkit for you. It’s a marketing tactic that helps brands and companies quickly determine how customers are reacting to their products or services.
This information can then be used by businesses like yours in order to quickly respond to reviews. It will also assist you to better understand what they might need to do in order to increase customer satisfaction levels.
To learn more about customer retention and other effective ways to improve your business, check out our Retention360 blog.