Consumer sentiment plummeted this month. The University of Michigan’s measure of consumer sentiment dropped 11% from last month, hitting its lowest point in the measurement’s 70-year history. 

The causes are easy to point to: U.S. consumers are concerned that the war between Iran, Israel and the United States will hit the domestic economy and their personal pocketbooks. And it already is. Inflation rose nearly 1% last month, led by gasoline prices jumping by 21%.

While economics, or global events for that matter, don't usually fall under CX leaders' purview, consumer sentiment — how consumers feel about the state of the economy — is a critical component to how they react to the experiences businesses provide.

It’s context.

“We're talking about consumers’ perception, their feelings about their economic reality as they're experiencing it,” Judy Weader, principal analyst at Forrester, told CX Dive. “It's the atmospheric stuff that they have to deal with, and it colors their perception of everything.”

Research from Qualtrics found that customers who view their interactions with a brand through a lens of financial anxiety rate their experiences lower across multiple metrics. They report less satisfaction, trust, lower likelihood to recommend and lower likelihood to purchase more.

Financially stressed customers are less understanding of hiccups in the experience, too.

“Tolerance for friction collapses when people feel uncertain,” Michael Hinshaw, president of McorpCX, told CX Dive. “Patience disappears, and little pain points to become huge decision drivers.” 

Companies need to design their experience not just for ideal conditions but for stress, too, Hinshaw said. “Then you can ask, ‘Does this still work for our customers if they're anxious, rushed or scared or stressed?’”

Bother Weader and Hinshaw encourage CX leaders to reassess their companies’ pain points and begin removing friction that has the biggest impact.

“Every moment of frustration becomes amplified, and so that context becomes really important, because now, as the CX leaders, we have to figure out how we can partner with other folks within the organization, whether it's the folks in the marketing side, operations side, whatever it may be within that particular firm, to try to remove as much friction as possible, reduce as much frustration as possible,” Weader said. 

Consumers aren’t a monolith, so their behavior and attitudes will change depending on their circumstances. 

“When times get tough, not all customers react the same way,” Hinshaw said. “Some are going to just spend less, some may consolidate spending with a few trusted brands. Some just might not do anything. But what that means, from a CX perspective, is that one-size-fits-all experience design is a liability.”

One segment is going to react to friction in different ways than another segment, Hinshaw said. “Which frictions are going to be most impactful on how different customer segments feel about you as a brand and interact with you as a brand?”

Hinshaw encourages brands to pursue sharper segmentation, better understanding of economically driven journeys, and awareness of where stress shows up differently by segment.

Long-term trust pays dividends

Brands that have nurtured trust over the years will be better positioned to keep customers than those who haven’t.

“Those brands that have higher degrees of trust and confidence are going to do better than those that don't,” Hinshaw said. “It sounds super simplistic, but it's also true.” 

Financially stressed consumers want a reliable partner that won’t add to their cognitive load, Isabelle Zdatny, head of thought leadership at Qualtrics XM Institute, told CX earlier this year.

“It's a customer feeling like the company has their back, the customer's best interest at heart at the end of the day,” Hinshaw said. “If your customers feel like you're looking out for them, that is a metric that you can translate directly to greater loyalty, greater share of wallet, greater purchase.”

This trust isn’t built overnight or even on one large improvement change, according to Hinshaw. Individual, dozens of small, cumulative fixes build trust overtime.

But not every business has that longstanding trust to fall back on. Those brands would do well to stress the value they bring to the table.

“Try to find a way to amplify the value that customers are able to derive from doing business with you because right now, they feel like they're paying more and getting [less],” Weader said. 

“Every time your company has erected a barrier unnecessarily that keeps people from being able to derive value from doing business with you, you are creating a headache for yourself that you really didn't need to create.”

At the end of the day, CX leaders don’t need to be economists to understand consumer sentiment.

“Consumer sentiment does matter, and should be something that CX leaders are paying attention to, just to understand the broader context in which their customers are operating and also their prospects are operating,” Weader said.