If a picture is worth a thousand words, data visualization is worth a thousand excel sheets. If you’re not familiar, data visualization is a technique where data is presented in a graphical format, and it has the power to provide insight and clarity.
A successful graph translates complicated data that otherwise would have taken hours to consume and turns it into something simple and easy to digest in an instant. Here are the biggest reasons why data visualization is a big part of how companies measure and achieve their goals.
Easily absorb data.
Patterns emerge very quickly with visualization. Consider the following example. Company ABC has two offerings: Product and Services, and we want to know the revenue performance of both offerings.
This is how monthly revenue data looks in spreadsheet form:
And this is how it displays in bar chart form:
By transforming it into a Bar chart, it becomes more evident that the revenue generated by services is always higher than that of the product. What is also easier to see is that services revenue struggled in Q2.
Faster decision making.
Decision-makers aren’t always technical experts. When you show them huge spreadsheets with lots of data, it usually won’t help them make a decision. But with proper data visualization, leaders can make faster and more informed decisions.
Take for example, a marketing manager that is currently running two media campaigns each quarter, and after the first few days of launching, needs to know what elements require optimization. The main KPI they use to make this decision is Cost per click (CPC), so using visualization, we can see that in terms of CPC, Campaign 2 is a strong performer, while campaign 1 needs optimization. Decisions like these are only possible with proper data visualization.
Suppose a company wants to look at their customer data, and they see a sudden decline in renewals for the past few months. The data suggests that there is a problem with renewals but does not provide any other insights as to why it happened. One of the main benefits of data visualization is that it enables users to see connections between operating conditions and business performance.
Finding these correlations is vital for a business to successfully function. The sudden drop in renewals makes the user inquisitive, and it leads to further investigation.
If we look at the second chart below, the Net Promoter score for that specific region (EMEA) also dropped during the same period, and when looking at the customer support First Contact Resolution Rate, it dropped as well! All of these are related, and it helps the head of the company to identify the root cause and fix it.
Have you ever been in a meeting where everyone in the room discussed the same topic, but couldn’t come to an agreement? In such cases, simply drawing a flowchart or a visual on a whiteboard keeps everyone in the room engaged, and helps the team see what they want immediately. Visualizing data helps people find common ground and tackle any issue quickly and effectively.
Whether it’s a simple visual or a professionally designed interactive dashboard, visual representation of data is an effective way to communicate insights with your audience and highlight important issues and required fixes.
The Iron Horse Insight
Data visualization is a useful and powerful tool, but like all tools, there are certain tasks it’s suited for while being ill-fit for others. Companies will want to visualize KPIs and metrics, but just because something can be visualized doesn’t mean it should. They will need to carefully select the appropriate areas, and ensure a named person or group has the responsibility for taking action.