The Consumer Confidence Index is one of those numbers that the government and economists eagerly await every month. Since consumer spending makes up about 70% of the US economy, it’s no wonder they want to pay attention to how the average consumer is feeling. The Conference Board, a non-profit business think tank, surveys thousands of Americans, crunches the data, and comes up with a number that represents how confident consumers are in the economy on a monthly basis. After March, the CCI number sits at 124.1, down 7.3 points from February. That’s a pretty significant drop, and a bit odd in such a strong economy. So, what does it mean?

In a time where we’re all scrambling for some indicator of the economic direction, many are latching onto numbers like this. Any slight dip in the barometer of the economy triggers flashbacks of the financial crisis. For that reason, it’s good to provide some context, as we can often get sucked into the relativity of our current situation. A score in the 120s is historically strong. In fact, anything over 100 generally indicates an expanding economy, so we look to be in pretty good shape. By comparison, the CCI in February of 2009 at the height of the financial crisis was 25.3, a far cry from where we now stand. That being said, a sudden drop like this raises some eyebrows. So, should we be worried?

In a recent interview with Planet Money, Lynn Franco, Director of Economic Indicators and Surveys for The Conference Board, tried to provide some clarity on the matter. “Consumers have a very accurate record at forecasting recessions,” she said plainly. It makes sense. As such a large part of the economy, consumers are a driving force when they’re confident and a vacuum when they’re uncertain. Before jumping to conclusions about this downtick, though, it’s important to remember the overall trend. “We’re still at a strong level which indicates that the economy is going to expand,” Franco says. “But we’ve had a bit of a large decline in the present situation which is a bit unusual,” she adds, pensively. It seems like we’re going in circles here.

It tough to nail down whether or not things are going to change, but for now, the outlook is pragmatically optimistic. “These things change month to month,” Franco reminds us. With haunting memories of the financial crisis still fresh in our memories, it’s easy to get jumpy. If my two cents means anything, I think that may even explain the sudden drop in consumer confidence. We’re conditioned to expect the worst now. Things have been good for so long that it seems impossible that they could continue without something looming on the horizon. Consumers might not be losing confidence, per se, but just being cautious. This is certainly a watershed period for our country, so for now, we just have to continue to monitor the numbers diligently and maintain that measured optimism.

We at Listen360 are all about that precious data that lets us understand how consumers are feeling and how we can better relationships and communication. I couldn’t possibly dive into the invaluable gauge that is the CCI without pointing out that you can scale this premise for your own business. Just as economists pay close attention to consumer feelings, you should be gauging your customers’ feelings. It’s difficult to sway the attitude of an entire country of consumers, but you’re much more empowered when it comes to strengthening your relationship with your customer base. NPS is to your business what CCI is to the economy. It wouldn’t hurt to check it out.

To hear the entire Planet Money interview with Lynn Franco, click here.

Update:

Since I wrote this a couple of weeks ago, we’ve seen the jobs report for March. The results were promising. Job growth bounced back from a troubling February. Wages continue to rise, and most industries added jobs. These factors can lead us to expect a boost in the CCI next month, but hey, I’m no economist.

Apple just dropped something new on us. Don’t roll your eyes yet, it’s not a new iPhone that is nearly indistinguishable from the last or some wireless headphones that cost a kidney. It’s Apple TV+. I know, that doesn’t sound very exciting, but at the Apple event, Oprah and Steven Spielberg seemed pretty enthused about it. So what? Apple paid some megastars to endorse them. Well, that may be, but this news may change the landscape of streaming services, and it oddly has a valuable lesson for you and your business in the modern digital climate.

The streaming market has been dominated by a few obvious players: Netflix, Amazon, and Hulu. It may surprise you, though, that there are over 300 streaming services out there, and they’re all vying for your seemingly affordable subscription dollars. And how are they doing that? Premium, exclusive content. We all know content is king these days, but is there too much of it now?

With Oprah promising a show and Steven Spielberg on board for some production, Apple TV+ boasts some pretty spectacular upcoming content. But is it enough to disrupt the status quo? Even Disney is on the streaming horizon, ready to challenge the subscription hotshots as well. The way the streamers are cranking out compelling television has our heads spinning. The fact that each major player is hoarding those flagship pieces of content (à la Stranger Things) to try to force a switch isn’t helping.

A recent study by Deloitte showed that there are now more “pay TV” subscribers out there than there are traditional cable subscribers, but those pay TV customers are suffering a sort of “subscription fatigue.” We want our TV à la carte, but we’ve found that the big names are forcing us to make choices. With so many great shows being kept under lock and key by the major names in pay TV, we either have to suffer a multitude of subscriptions that would force our monthly payments up to the levels of traditional cable, or we just have to go without a few shows.

OK, so how does this apply to you and your business? Wasn’t this about Apple TV+ or something? Yes, I’m getting to that. Apple throwing its hat into the ring of such a contested market with so much growing customer fatigue is a prime example of what’s happening to modern markets everywhere. Digital progress drives diversification. Markets of every industry are being newly challenged by big-box names and small fries every day. Consumers have more options than they care to evaluate. Just like subscription fatigue, option fatigue is creeping into all aspects of life. Why should they have to research and pay for so many things to make sure they’re getting the best of all worlds? Just like pay TV, consumers are beginning to make tough choices to settle with one or two options.

You need to make sure they go with your option. Not settle for it, mind you, but fall in love with it. You need to collect and analyze data as to why your current customers are choosing your business, why they’re staying with it, why (God forbid) some are leaving, and what is working best for you. Study it, learn from it, and lean into it. The giants of content are racing to do this to corner the market, and you shouldn’t ignore that strategy. Play to your strengths and be the best version of you; don’t be another option just making noise in the market, exhausting potential customers. Retention is a whole new game in the digital age, and it pays to do your homework.

 

If you want to start on some of that homework and up your game, check this out.

For a deeper dive into the streaming battles, give a quick listen to this interesting take on the recent Apple news.