You can do better than reading tea leaves

Planning for 2009-10? The confusion means it’s a bit like trying to read your tea leaves at the bottom of your cup.

But here are some ideas.

Start off looking at who your target market is and where they operate. Then look at a range of in-depth material to try and guage consumer and business confidence.

For example:

• Ring Gary Morgan and ask for his Consumer Confidence bulletin.
• Stay in touch with Apple’s CFO,  Peter Oppenheimer.
• Follow Neilson’s Global Consumer Confidence survey.  
• Review the US consumer sentiment surveys.
• Read the tea leaves in the bottom of your cup.

What you will see in the swirling globe depends upon where you are viewing that crystal ball.

The Neilson twice-yearly global survey finds that in China, consumers remain among the top 10 most confident consumers globally. Consumers in parts of Eastern European were among the most pessimistic, and confidence plunged in Hungary and Latvia. 

South Koreans retained the most pessimistic ranking, followed by Japan, as both economies have been hit by plunging exports this year as global demand has evaporated.

In Australia a more current profile can be found with Gary Morgan’s weekly confidence barometer. The weekly Roy Morgan Consumer Confidence Rating has dropped slightly this week.

Despite the small fall down (0.8 points to 102.6) the number of Australians expecting “good times” economically for the country over the next five years (39%, up 2%) has risen to its highest level since December 2007. And 38% (up 1%) of Australians expect their family to be “better off financially” this time next year compared to 16% (down 1%) of Australians that expect their family to be “worse off financially”.

In the United States, consumer confidence was relatively unchanged in March, after reaching a record low in February (the index began in 1967).

“The ‘Present Situation Index’ suggests that the overall state of the economy remains weak and that more job losses are on the horizon,” says Lynn Franco, director of the Conference Board Consumer Research Center. “Apprehension about the outlook for the economy, the labour market and earnings continues to weigh heavily on consumers’ attitudes. Looking ahead, consumers remain extremely pessimistic about the short-term future and do not foresee a turnaround in economic conditions over the coming six months.”

The best indicator comes from the retail markets where consumers are spending their stimulus dollars on quality assured products or racking them away to write off credit card debt until they can pick up a bargain.   

Peter Oppenheimer, Apple’s chief financial officer, reports: “We are very pleased to report the highest March revenue in Apple’s history.” This was driven by solid performances for all three major businesses, and the gross margins were better than expected.

Oppenheimer singles out a couple of points – the 43% growth rate in revenue is twice what Apple did in last year’s second quarter. All geographies were strong, and retail store sales were very strong, with traffic up 57%. Half of all Macs sold in the retail stores were to new Mac users, which is a similar percentage to what they’ve said the last few quarters.

Under these conditions it is appropriate to follow the advice of Vivienne Kane, director of printing company Minuteman Press, and SmartCompany blogger Kirsty Dunphey, to get into the heads of your own customers and encourage them to become your business partners.

Kane says: “You need to think about their life or business experience, hopes and fears, frustrations, and their wants and needs.  It’s easy to find out – listen to the questions your customers ask; what they love, what they need that product to do for them; what motivates them.

“Have a look at your advertising, sales materials, brochures and any other promotional material.  Take a couple of highlighters and in one colour highlight anything about you, and with the other, anything that’s about your customers,” she says.

“If more than half the content is about you, you’re not being customer-focused.  It’s a common mistake, because it’s easy to talk about your product, but not so easy to get inside the head of your customer.”

The reality is that next year is going to be good for smart companies that have worked with their teams to plan ahead to get ahead.

Dr Colin Benjamin is Entrepreneurship and Strategic Thinking Consultant at Marshall Place Associates, which offers a range of strategic thinking tools that open up possibilities for individuals and organisations committed to applying the processes of innovation, creativity and entrepreneurship. Contact: CEO Dr Jane Shelton. 

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