Auditing online reviews: How to validate a targets customer proposition

<div class="insights_cta-component">This is the fourth article in our series covering Digital Due Diligence essentials. See the full series below.</div>

So, you've received another IM on your table, and it claims that the company is distinguishing itself from competitors by its vast and complete range of products, offering superb customer service and expert advice as well offering the best prices on the market. The company is driven and committed and strives for 100% satisfaction among its customers. You're probably thinking, “sounds pretty good, let’s have a closer look at this company.”

You start by googling the company and you stump upon their online reviews, some angry people you think, but also a lot of 5-star reviews. So how do you sift through the noise and locate the facts in all this data, is there any truth to these negative reviews? Let’s explore how we at SparkOptimus make sense of all this data using a bit of Generative AI know-how.

Online reviews

Online reviews are an interesting asset in assessing a company's customer proposition, offering direct insights into customer satisfaction and product or service quality. These reviews, scattered across various platforms such as Google Reviews, Trustpilot, and Kiyoh, can therefore serve as a treasure trove of data that, when analyzed correctly, can reveal the true customer experience beyond what is claimed by a company.

But the value of online reviews extend beyond mere ratings; they provide a nuanced understanding of a customer's journey with the company's offerings. Positive reviews can highlight strengths and unique selling points, while negative feedback sheds light on areas needing improvement, potentially uncovering systemic issues not immediately apparent through other due diligence methods.

Getting the reviews

So how do you get the reviews? While you can easily find the average ratings and total number of reviews on the typical review platform, they won’t let you download each review including its review text.

Fortunately, it’s relatively straightforward to scrape all the reviews from the platforms. While we won’t share in detail how we do it in this article, if you want to do it yourself, simply ask ChatGPT how to scrape reviews from e.g., Trustpilot. If we have followed the instructions correctly, afterwards we need to quickly clean the data and then we can start running our analysis.

Analyzing the reviews

The evolution of technology has streamlined the analysis of customer feedback, changing what was once a time-intensive manual task into an automated, efficient process. By using natural language processing algorithms powered by the OpenAI API, we can now swiftly categorize vast numbers of textual reviews.

For a retail company, understanding customer sentiment is critical. The OpenAI API enables us to break down each review into specific categories such as price, customer service, and product advice—anything customers often mention. Once categorized, we then put this data into a table, as shown in Figure 2, to compare a company to its competitors.

So, coming back to the company that claimed in the beginning to distinguish itself from competitors by its vast and complete range of products, offering superb customer service and expert advice, as well offering the best prices on the market. According to a comparative analysis of the online reviews against two very similar competitors, the target company indeed stands out for its customer service, product assortment, and advice, lending credibility to its claims in the IM. However, there's room for improvement. When compared to its competitors, the target lags behind in delivery, price, and product quality, which are mentioned significantly less often by its customers compared to the competitor.

CASE STUDY: Would you have invested in a Series C in Vanmoof?

Let’s illustrate the power of this data for a company for which we sadly already know the outcome, Vanmoof. If we look at the overall distribution of 1- and 5-star reviews over time in Figure 3, customer satisfaction sharply declined with the launch of the S3/X3 electric bikes. Despite that, Vanmoof still managed to raise a very successful Series B funding round.

Regardless of the capital injection, the negative trajectory of customer reviews continued. As 2021 saw a peak in mechanical issues, the company's success in addressing these was overshadowed by a surge in customer support and delivery complaints. This signaled deeper systemic problems that extended beyond product quality and into the realms of customer experience and operational efficiency. A tell-tale sign of a company that is outgrowing its capacity to meet demand. Of course, something that is easily said with hindsight, but we will ask the question anyways, would you have invested in a Series C?

The above analysis is part of our recently released Microservices. Our Microservices cater to those DD needs that don't require a multi-week approach. They provide rapid, AI-powered analyses at competitive rates. Feel free to reach out to learn more and see how these micro-services can be applied to your investment cases.

THE digital due diligence article SERIES

In the other articles, we are covering assessing market size, sizing up competition, and analyzing website traffic. All topics:

• Analyzing Website Traffic – Evaluate traffic volume and organic vs. paid sources

• Sizing Up the Competition – Identify who else is targeting the same keywords & audiences

• Estimating Market Size – Approximate market size and growth using keyword data

• Auditing Online Reviews – Validate a company’s customer proposition

Stay tuned!

We hope you’re as excited as we are and please let us know if you have specific topics or questions you would like us to share with you.

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At SparkOptimus, we perform these types of analyses every day, and we've been doing so for years. We also make sure to put these analyses into context and share our strategic insights about the results— you can find more information in our M&A service line.

For over ten years, SparkOptimus has been helping its clients achieve concrete results in areas that are more important now than ever before. This has led us to secure the top spot in digital consultancy in the Netherlands for the 6th time. If you have any questions, feel free to reach out — we’re here to help.