Forecasting an Upturn in the Economy
A great deal of news media time and ink has been focused on the ups and downs of economic data recently. Many people expected a quick end to the recession, with a return to rather high growth rates -- which just hasn't happened.
While the main job of marketers is thought to be keeping the company's products in front of the target market, the real function of marketing communications is to generate leads that salespeople can turn into revenue. When the market isn't ready to buy, marketers have to ask themselves if it's worthwhile to keep advertising, exhibiting at trade shows, etc.
So how's a marketer to know when to ramp up the marketing communications effort to take advantage of a future upswing in the economy?
In the article Leading Indicators of The Future I talked about the 12 leading indicators of the US economy, which can sometimes help predict when the general economy will turn up. However, they do little to help a marketer identify when a company's major target market will start buying again. For that, you need to look at some narrow measures of economic activity that are available at sites like FreeLunch.com and the US Department of Commerce. If you sell to consumers you'll want to look at data for personal income and compare changes in to past changes in revenue.
Whatever market your company sells into, it's important for every marketer to also be part economist in order to understand the flood of data that's available on every aspect of the economy.
The statistical functions in Microsoft Excel, or the more powerful XESS spreadsheet from AIS, can be used to identify which economic data moves up or down ahead of changes in your revenue.
While your forecasts may not be 100% accurate, forecasts will help you know when to turn up the heat under marketing communications efforts to generate high quality leads.