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What Is Consumer Confidence?
Basically, consumer confidence is measurable through certain loyalties and beliefs in all sorts of products and services available for sale to the general public. Actually, The Consumer Board, which has been in existence for over 90 years, surveys approximately 5,000 average consumers each month to determine what is called the Consumer Confidence Index or CCI. They utilize these surveys to determine what effects consumer confidence.
Through these surveys, consumer data is gathered on such items as the economy, employment, business, and family incomes. By analyzing this data, marketing and business experts claim they are able to reveal what effects and consumer confidence, but are those statistics always right?
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Real Factors Affecting Consumer Choices
If you have data to analyze, experts will come and turn that data into something measurable, and hopefully understandable to consumers and businesses alike. For example, during economic downtimes or recessions, people largely worry about employment and income levels. Those worries often turn consumers to stick with product brands they’ve used and trusted in the past instead of exploring the adventure of trying some new. Something new may turn out to be not as expected and, therefore, money wasted in a down economy.
Marketing and branding also influence consumer confidence. A family traveling on a road trip that spies McDonald’s golden arches pretty much knows they can get an affordable meal with food everyone will like. Or the large letter “Q" atop a hotel may mean the family can find a good place to stay the night at reasonable prices at a Quality Inn.
The business sector itself has a large affect on consumer confidence. If business is bad, consumers worry. Will the current product I have still be covered under warranty if that big business goes out of business? Should I get rid of the product I have in case the business goes under and try something new?
If family incomes are down or are expected to fall, consumers tend to look for on sale items or discounted stores to buy staples and other products. Even unwritten trends affect consumer confidence. Why should I buy that new flat screen television when it will be outdated next year? Or why should I buy the first model year of a vehicle when perhaps they haven’t perfected it yet?
Image Credit: Lancaster McDonald's by CrazyLegsKC / Wikimedia Commons
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How Is Consumer Confidence Influenced?
The Conference Board who determines the Consumer Confidence Index is largely comprised of big business CEOs from well-known companies that sell cereals, soups, automobiles and insurance, and even utility company heads. So in a way, while the board attempts to remain impartial, couldn’t consumer data analysis further help their own endeavors?
For years, targeted consumers for television, radio, and print advertisements have been between the ages of 18-49. Some people over or under this age range may feel their buying trends don’t affect consumer confidence, but those consumers who don’t fall within that age range have other opportunities to influence consumer confidence.
Take the holiday season or Mother or Father’s Day for example. Certainly many advertisements are geared toward gift and toy ideas between Thanksgiving and Christmas and old staples like sweaters, sock, blankets, ties, and appliances ads are fierce during gender-related holidays.
The people or characters that pitch advertisements to us also influence us as consumers. We may like or trust one spokesperson over another. Often a well-known and considered to be well educated spokesperson will be utilized to gain our trust in seeking insurance or mortgage services; we believe them because of who they are.
Other times, unknowns can pitch products to us if the advertisement is catchy, funny, or creative. We might like a utility or cable company because it gives back to the community and tells us so by advertising.
There are many ways consumer confidence is influenced, some ways are tried and true like business logos we remember where other ads attempt to gain our trust for something new by promising something better than what we are used to.
When wondering, what effects consumer confidence, it’s the environment we live in, the places we work, the money we make, the products we believe in and the pitches we are handed daily if not hourly.
The next time you’re shopping, whether it’s online or off consider what made you pick a certain product or service? Were you influenced? Most likely so.