The race is back on. Organizations that paused programs during the height of the pandemic to preserve capital are announcing that they are re-starting work. In some cases, they are even accelerating programs to make up for lost time. In the 2020 homestretch, some of our clients have begun competitive research to prepare for launching new digital products. Others are creating dashboards to monitor third-party marketplaces. We’re seeing organizations challenged by the decision of whether it is the right moment to loosen the purse strings or keep them tight and risk being left behind.
Data on the economic recovery makes daily headlines. It’s everywhere and it’s overwhelming. Everyone is looking for markers on the permanency of the recovery taking place. Is what we’re witnessing irrational post-lockdown exuberance? A party that’s going to end as quickly as it started as jobs recovery fails to keep up with the pace of spending? Or are we truly seeing a recovery that could go on for several years, sustained by a renewed sense of optimism and desire to take pleasure in life after lockdown?
Economists have been debating this for months already and no doubt will continue to for months and years to come. There is a lot of noise out there. What economic indicators should you listen to? Which ones are in tune with the moment? Which ones matter for your business and industry?
In the past, indicators like the Consumer Confidence Index and Retail Sales were favored trackers. But new metrics seem to be popping up left and right, from the Lockdown Index to the erstwhile Lipstick and now Moisturizer Index. At Grail Insights, we've tried to make sense of the barrage of indicators. In general, these fall into two main categories, those that measure facts and those that measure opinions:
Opinion-Based Indicators are derived from sentiments and opinions
Action-Based Indicators are rooted in behavior and observed on-the-ground data
Opinion-based indicators provide an understanding of the mindset of consumers. They can often give a useful lens into future potential behavior. However, as our friends in the insights industry know all too well, what a consumer says and what they actually do are two different things. Think of the difference between opinion-based and action-based as that between opinion polls and election-day voting -- no matter how closely the former tracks the latter the two are almost always a little apart. When you’re driving, you expect others to slow at the yellow light, and yet you may be surprised when someone speeds through at the last second. This is where action-based indicators offer an advantage: they reflect actual behavior. However, this also makes them backward-looking.
We’re not breaking any new ground here in stating that the best approach is a blend of opinion-based and action-based indicators. But this is where the challenging part begins:
- What are the right indicators for your industry? And, more specifically, to your specific place in your industry?
- How do you interpret mixed signals across indicators?
- Is there a simplified way to provide management with what the indicators are telling us?
- How can this be easily tracked on-going?
Check out our free report! Download our industry-by-industry report on the optimal blend of opinion-based and action-based across five key sectors: CPG & Retail, Technology, Finance & Banking, Industrials, and Services. The report also includes a snapshot of 52 economic indicators to watch.
Grail works with clients to build and maintain executive dashboards to track a selection of economic indicators that's right for them. In some cases, we can streamline our dashboard trackers into a simple traffic light system or a single, customized ‘optimism score.’
How do you determine which signals to follow? Grail can help. Talk to us about building an economic indicator dashboard that points you in the right direction. Reach out at firstname.lastname@example.org
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