Using Your Crystal Ball to Predict an Upturn

Companies that have strategies in place to grab market share early in the recovery will have a significant advantage over those that are unprepared. Those who wait for the stock market to proclaim the end of the recession will most likely need an extra six or more months to return to full operations.

We may not know exactly when this recession will end, but telltale early signs of recovery are always there for one who knows what to look for. And if you can predict the timing of the recovery, with the right strategies and tactics you can position your company to carve out a hefty market share ahead of the pack.

Thirty years ago, a wealthy man told me to watch people’s behavior to determine the state of the economy. He spent the start of each workday in a doughnut shop. He drank his coffee and watched what types of doughnuts were being purchased. If the customers bought fancy doughnuts, they felt good about themselves and the economy. If they bought plain doughnuts, they did not feel good about themselves or the economy. He became very wealthy using this simple economic indicator. The early indicators will always be out there in plain sight for anyone to see. The question is, can you spot them, and can you take advantage of them?

Here are a few indicators to watch:

1. Increased spending on overtime. Companies will increase overtime spending before management has the confidence to hire permanent

     full time staff.  Keep an eye out for who is starting to pay overtime.

2. Increase in back orders for key parts, components, or raw materials. Identify key parts or materials needed to build your products

     or used in your markets. When delivery times begin to move out and/or backorders start growing, start preparing for the recovery.

3. Increased demand for shipping materials. When demand for shipping containers, corrugated boxes or packing materials goes up, that

      is a signal of an upturn in the economy.

4. An increase in activity at key suppliers. Watch for changes in the sales of companies that produce key commodities or components

      for your products. Increased demand for metal stamping, plastic components and manufactured parts means that production in your

      industry is going up. Parts manufacturers will register the change before you will.

No one has any idea when this recession will end, but acting on the early indicators of the recovery will provide your company with a competitive advantage.

This article is the third in the Marketing Profit Hunt series –

Surviving and prospering during the economic downturn.

Copyright ©2009 by Ken Wilson    All rights reserved

About the Author - Ken Wilson, CMC, is the CEO of the Wilson Marketing Group, Inc., a firm specializing in strategy and tactics for business-to-business, manufacturing and industrial firms. Ken would be happy to answer your questions by e-mail at kwwilson@wmg-mn.com or by phone at 763.476.2216.

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