How Credit Suisse Uses Social Sentiment to Predict Stock Changes

Kimberly Surico |
 04/26/17 |
5 min read

All brands and businesses benefit from social media listening, but for investment companies like Credit Suisse, the stakes are extra high. With clients depending on you to keep their money safe, social sentiment analysis is the next best thing to a crystal ball.

Taking a risk with refugees

Consider Starbucks’ recent decision to hire 10,000 refugees over the next five years across the 75 countries where they operate. The January announcement was in line with the coffee chain’s mission to “inspire and nurture the human spirit, one person, one cup and one neighborhood at a time,” as described by Chairman and CEO Howard Schultz in a memo to employees about the refugee initiative. But given the current political climate, do consumers – the ultimate bosses of any brand – agree with the move?

For a brand like Credit Suisse, the question needs an answer – because fallout affecting stock prices impacts their customers. Thus Credit Suisse uses NetBase to track sentiment for all brands their customers have stock in.

Understanding sentiment as a metric

So how exactly does sentiment impact brand health? It’s pretty simple, really: The advent of ecommerce means consumers have more choices and more information than they’ve ever had. Instead of having to rely on brand advertising or the endorsement of a trusted friend or two, consumers have other consumers across the internet watching their backs.

Along with product reviews at the point of sale, social media and blog platforms offer unfiltered opinions about everything from coffee to cars. Consumers trust their peers far more than they trust brands or marketers – especially that oh-so-coveted Millennial audience. When enough people tell them to try – or steer clear of – a product or brand, they listen.


What’s noteworthy for brands is the fact that passion is the driving force of social commentary. Consumers don’t go out of their way to post about things they just “like.” No, they rave about things they love, and they gripe – loudly – about things they hate.

For this reason, the NetBase Brand Passion Index looks at two values:

  1. Net Sentiment – whether an emotion is positive or negative, on a scale from -100 to +100
  2. Passion Intensity – the strength of those emotions, on a scale from -100 to +100

This lets you understand the overall sentiment for your brand, and where you stand with regard to share of voice, but it also gives you the power to identify two important types of consumers: influencers and detractors.

Detractors must always be dealt with swiftly, to prevent negative sentiment from devolving into a full-blown crisis. However, with enough influencers in place, you may have loyal consumers speaking up for your brand before your customer service team even intervenes.

It’s about taking the right action at the right time

Not every negative post deserves your full attention – though some certainly will. What matters is whether sentiment is indicating a trend for your brand. For example, with regard to Starbucks, Credit Suisse saw brand sentiment drop suddenly following the refugee hiring announcement – from a previous average of +80, to a “flattish” value in the neutral range between strongly positive or strongly negative.

There was a recovery of sentiment, but with “significant volatility” in the weeks that followed. So how did the firm see this impacting Starbucks’ stock? According to Smart Stock News:

“NetBase data show that net sentiment remained depressed for 10 days in late Jan. and early Feb. and was particularly volatile through the remainder of Feb. Credit Suisse sees potential for a scenario in which US SSS slowed for a few weeks following news of the refugee hiring initiative, negatively impacting full-quarter SSS by ~70-80bps under a reasonable bear case. This assumes that (1) SSS during the initial 10-day stretch were ~flat, (2) SSS averaged +2% during the remaining 3 weeks of Feb. (when net sentiment saw particularly high volatility) and (3) SSS during the rest of the qtr (Jan. and Mar.) average +3.5% (in line with consensus forecasts for F2Q), putting F2Q US SSS at ~+2.8%.”

Credit Suisse has seen this kind of short term impact in the past, when analyzing Chipotle, for example – which underwent a pretty major E coli crisis, but managed to turn things around with smart social media listening from the start.

Smart Stock News notes Credit Suisse has seen “little to no correlation over longer time periods between the net sentiment data and US SSS.” But that’s likely because none of these critical moments of negative sentiment were left to fester. Which is exactly the point. You’ve got to follow brand sentiment consistently to keep things on an even keel.

Another use case for this data

Firms like Credit Suisse monitor social conversations and sentiment for the sake of offering their clients real-time information about investment trends. Brands and agencies can use this data for competitive analysis as well.

If you’re Dunkin’ Donuts, for instance, you’d want to take note of consumer reaction to Starbucks’ refugee hiring plan. Or to their new Unicorn Frappuccino – which has baristas and health food advocates up in arms, while consumers are alternately writing songs about it, or spitting it out at first sip.

Using social media monitoring tools for competitive intelligence is a no-brainer with so much information at your disposal. If Dunkin’ was thinking of creating their own version of the Unicorn Frappuccino, they’d want to understand Starbucks’ results before making that decision.

And that’s just one way to respond. All kinds of consumer issues become instant opportunities for competing brands – and they’re right there waiting for you to address them. One brand’s disgruntled customers could become your most passionate influencers – it’s all about how you handle things. But, of course, you’ve got to have the information in the first place.

Whether your business depends on stock prices, or simply on word of mouth sending the next consumer to your door, social media sentiment analysis should be part of your arsenal of tools. Because, as Credit Suisse knows, what you don’t know can hurt you – and help your competitors.

For more on how Credit Suisse uses NetBase for their clients, read their case study. Or reach out to learn how NetBase can help your brand keep consumer emotions in check.

Image from Alan Kotok


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