Using Social Media Tools for M&A Due Diligence
October 12, 2010 Leave a comment
It occurred to me that due diligence efforts are not keeping up with technology. There is an enormous amount of generative content on the social web that can help with understanding customer sentiment. Tapping into this real-time collective intelligence provides unique insight about the value of a brand. Whether the brand is a chain of restaurants, a single unit, a manufacturer or retailer, the “conversation economy” will deliver.
Here is how it works. FohBoh, a portfolio company of Bailiwick Capital, is the market leader in an entirely new category: Restaurant Social Media. They not only operate the leading and largest online community, fohboh.com, but are also a leading social web technology company. Their first social CRM product is called FohBuzz, an online listening platform that helps brands monitor and manage their brand online. It does this by using advanced web crawling technology to gather conversations and mentions taking place online. Since you can’t protect your company’s reputation if you don’t know what’s being said about it on social media sites, this is important.
FohBuzz creates a profile of your brand and maps each of your locations, which is a key differentiator of this product from other engines. The reputation management engine then crawls the web looking for mentions of your brand name by location. It can literally search millions of websites, news feeds, blogs, review sites, finds “status updates” and even searches photo sharing sites looking for conversations and mentions about your brand. Then, FohBuzz reads the conversation using natural Language Processing Technology (NLP) to understand customer sentiment from the prose. Seeking positives, negatives and neutral comments from conversations that don’t use relating systems to help understand how your brand is being perceived by the consumer. Powerful stuff, this NLP.
Next, FohBuzz filters all this noise into three primary categories relevant to restaurants: Ratings as it relates to Quality of Food, Quality of service and Quality of Ambiance. Advanced users can add additional fields to capture keywords relevant to any segment, or sub-segment. For example, if you operate a pizza chain, then crust, or sauce may be of interest as well.
The use cases are significant.
Different Applications for FohBuzz: The power and necessity for real time collective intelligence is becoming obvious. By tapping into the online conversation, you will have unique insights that can benefit your business. Knowing what people are saying about your restaurant is one thing. But, imagine other uses equally as powerful:
- Campaign Management and Analysis: This is the core FohBuzz function. How well do you serve your target market? What is the customer experience? How can you engage more effectively? What is the customer need, the compliment, the complaint, the problem, the question, the crisis, the campaign effect, who and where are your influencers?
- Business Forensics. Your concept is proven and the management team is your best. You selected a great site at Main/Main. But, your new restaurant just isn’t performing. Customer behavior is one element you can’t easily control. With FohBuzz, you can go back a bit in time to uncover hidden conversations that may lead to the answer.
- Competitive Analysis. What are your competitors doing with social media? What do their customers say about them? How can you use this to your advantage? Who are their key influencers and can they become yours? Subscribing to a FohBuzz view of your competitor or a specific location, even for a short time, can provide unique insights that could affect your business.
- Variance Analysis. Measuring comparative store sales is everything. Arm yourself with the FohBuzz sentiment analyzer using natural language processing (NLP) in real time.
- Franchise System Insights. As part of your field team’s tool-box, FohBuzz will help you monitor and measure the quality of each franchisee; per unit, per region. Use this real-time data to improve relationships.
- Regional Reports. Compare regions from a marketing, communications, operations and human resource perspective. Set and measure social media and customer satisfaction metrics month over month.
For financial services firms, lenders and private equity firms in particular, should use this product as part of their due diligence efforts. Knowing what the customer thinks, in real-time, is critical to understanding the true value of a consumer brand. And, having empirical evidence that may suggest a weak relationship and can affect pricing, up or down.
- Due Diligence Use for Operators. Thinking of expanding to a new market? Are you an operator, FohBuzz enables you to access competitive intelligence and consumer insights in real time. Learn more about the market and customer behavior before you invest capital in a new market. Maybe that location you love isn’t perfect after all. FohBuzz should be added to every due diligence effort for a single unit or national chain to bring real-time customer insights to real estate, purchasing, operations, human resources departments. The restaurant brand is what the customer says it is, not what the operator says it is.
- Due Diligence Use for Financiers. Are you an investor or lender buying a restaurant or chain? FohBuzz enables you to access competitive intelligence and consumer insights in real time. Learn more about the market and customer behavior before you invest capital. Compare regions, or franchise groups. Compare markets, compare competitors and collect intelligence that may affect pricing and valuation.
For more information, connect with michael@fohboh.net
