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Marketing Profit Hunt Series




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.

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.

Surviving and prospering during slow economic conditions


About the Author:  Ken Wilson: Strategist, marketing guru, educator, facilitator, author, university lecturer and consultant, he can be reached at ken@wmg-mn.com  or 763-476-2216

  Copyright ©2019 by Ken Wilson    All rights reserved

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