2020 has been a challenging year, but the big question is, did your actions help you outperform your markets? Many industries are experiencing some of their steepest recessions in modern history, but, as a wrap-up for 2020 and to prepare for 2021, we still need to assess how our teams performed.
In the ITR Trends Report™, you have access to many different markets, such as US Wholesale Trade of Durable Goods. There you can see that Wholesale Trade is currently down 4.4% and, through our forecast, know where this market will be heading through 2022. If you examine your own wholesale activity, has your revenue fallen more than 4.4%? If so, you need to ask yourself if there is an internal issue or whether Wholesale Trade of Durable Goods is the right benchmark for you. Is there a more specific indicator that may provide a more relevant benchmark for your business? If you are selling electronic goods, for example, Wholesale Trade of Durable Goods may be too broad a measure. Wholesale Trade of Electrical and Electronic Goods, which is down 5.5%, may be more applicable and help explain why your revenue is down more than 4.4%.
Having the appropriate benchmark is important – we don't want to let the non-economic issues of 2020 mask problems you need to address in order to be successful in 2021. Knowing how your business relates to the appropriate indicators or basket of indicators that form a customized market index will enable you to determine if you have the right people on your bus, if your initiatives are bearing fruit, and whether you are gaining or losing market share.
The right benchmark can also help you identify when your team is outperforming the market. If the benchmark for your business shows that the market contracted 6.2%, and your revenue fell 3.2%, you can examine what went right and recognize those within the company who made a difference as well as look to repeat it next year.
If you need help determining if you have the most relevant benchmarks for your business, please feel free to let us know.
Director of Economics