Social media is an all-too-often overlooked, valuable source of due diligence data. In this blog we cover how to make the most of consumer generated data to drive decision-making and expose both new opportunities for growth and threats to the brand.
Almost every business has some kind of presence on social media sites, be it on Facebook, Twitter, Instagram, YouTube or LinkedIn. The main advantages of social media for business are:
- To promote products and services through paid advertisements to targeted audiences
- To share company/brand values
- To provide another channel for customers to engage with your brand.
It’s this final point that makes social media such a valuable source of data for the due diligence process. Social media provides a constant stream of publicly accessible data with insights into how customers feel about a brand and its products and services. It also enables employees to share their experiences of working for the company.
Increasingly, social media data is used alongside traditional due diligence materials to help potential buyers analyse and identify risks and opportunities in a target company.
But the main issue with social media data is that it is mostly in the form of unstructured text which has proven difficult to accurately analyse. Thankfully, social listening tools are advancing their capabilities to interpret such data. The Symanto Insights Platform uses ever-advancing state-of-the-art Natural Language Processing (NLP) technology to extract accurate insights regarding the sentiment, communication style and even personality traits of the authors of each post.
We’ll look at how to extract useful insights from social media data using the Symanto Insights Platform, and what else you need to consider regarding social media as part of the due diligence process.
How to use social media data for due diligence
1. Brand reputation within the market
Since the majority of interactions between customers and companies on social media are publicly available, it’s easy to source competitor data to compare the performance of the target with other companies in the industry.
The Symanto Insights Platform makes it easy to compare brand mentions and sentiment between companies. Find out not only who has the largest share of voice in the market, but also how people feel towards each brand.
Compare brand mentions over time to see whether the conversation around each brand in the market is stable or fluctuating, growing or waning.
2. Identify customer base
Language and syntax can reveal a lot about the author. The Symanto Insights Platform analyses text for psychographics to reveal the key personality traits of the customer base.
Are the customers emotionally or rationally driven? Are they information-seeking, or action-seeking? Do they prefer to share experiences or facts?
This information can help you build a more detailed picture of the target’s customer base, and help you identify which companies in the industry share the same audience.
3. Customer perception of the brand/product
Social media gives you the most direct and honest customer perception of the target company. Unlike surveys and interviews, social media comments are written organically meaning there’s less chance of bias.
The Symanto Insights Platform can identify several topics and subtopics within the same social media comment, and rate each of them by sentiment. The Symanto Insights Platform then arranges this information into easy-to-understand interactive data visualisations. Quickly identify pain points as well as product and service strengths from the perspective of the consumer.
As well as social media, review sites also offer an abundance of such data. The Symanto Insights Platform is connected to over 75 online channels including popular review sites Google, TrustPilot, Amazon and TripAdvisor.
4. Identify Marketing and PR successes/disasters
As well as indicating share of voice, brand mentions can also pinpoint you to key moments within the history of the target company.
Sudden peaks in brand mentions can indicate a time when the company experienced either great campaign success or a PR disaster. Use the Symanto Insights Platform to find out exactly when there was a boost in online conversation, and research that period further. Then assess potential fallout or ramifications.
In this capacity, social media data can be used as part of a wider marketing due diligence process to help you assess the effectiveness of past campaigns and identify potential risk areas.
Incorporate social media in due diligence request
With traditional due diligence reviews, it is usual for the potential buyer to request certain information about the target company’s marketing strategies and marketing materials such as press releases dating back to a certain period.
Given the usage of social media as a marketing tool, you should also look to request the following, so long as you aren’t infringing on privacy policies and laws:
- An exhaustive list of current and former social media channels the target company has used.
- Username and password (when appropriate) to every social media account.
- A list of target employees and third parties with access to the above.
- An explanation of their intended use of social media.
The due diligence process should also look into what protections are in place to prevent employees from exposing confidential or sensitive information via their personal social media accounts. As such, the buyer should also request:
- A copy of their social media policy
- An explanation of how the policy is monitored and enforced.
In summary, social media data has many implications in the due diligence process. The Symanto Insights Platform gathers, analyses and interprets data so that you can better understand the target, their position in the market, their customers and assess brand health.
You should also look to ensure that the target is transparent about their use of social media within the company and beyond by requesting relevant information.