Regardless of your company's size or your level of expertise, data visualization is a valuable tool that can benefit everyone. Data visualization plays a crucial role in understanding and communicating the story that your data is telling you.
Humans Are Visual Creatures
We process images and visual information much faster than we do text. According to research, the human brain can process visual information in as little as 13 milliseconds. This means that when you present data visually–even to yourself–you're able to convey and understand information much more quickly and effectively than you would with text or numbers alone.
There's more to it than just speed. Data visualization can also help you see patterns and trends that you might not have noticed otherwise. When you're looking at a table of numbers, it can be difficult to see the big picture. When you visualize that same data, that story can jump right out at you.
A Picture Says 1,000 Words
Let's say you're looking at a table of sales data for the past few years. At first glance of the table below, you'll notice the numbers are on an upward trend. Great! Right?
Maybe not. While revenue is continuing to increase, growth is slowing down. There's a clear inflection point two years ago where something must be at play. You can deduce this from the table, but it's not quite as quick and obvious as seeing it below.
Another benefit of visualizing data is understanding magnitude. Humans aren't great at comparing large numbers. In the table above, you may have noticed the jump from 2021 to 2022 wasn't that great. This is because the numbers are close enough you can roughly math the difference.
However, sometimes our brains take shortcuts that can dilute the story. When reading a table of large numbers, people tend to round and abbreviate, which might look something like:
"15👌 ...90👍 ...200👍 ...300👍 ...400👍 ...440 🤔"
In this case, you catch last year being slower but miss that the inflection point is actually the year before. Without a clear understanding of the timeline, you could end up investigating the wrong area and miss the real story.
It's understandable to think of data visualization as an extra or a luxury, but in reality, it can have a significant return on investment. With the abundance of tools and options available today, you can easily create visualizations and leave them to do the work for you.
Convinced? Here's What You Can Do.
Luckily, you have plenty of options to incorporate data visualization into your decision-making process. Each option has its own set of advantages and disadvantages that you can use to determine which is the best fit for your business.
Check Your Existing Tools
Most business software (think CRMs, accounting tools, etc.) come with built-in reporting tools that include visualization. While this option is typically no incremental cost, you can't combine multiple sources of data together to see relationships and the big picture. We'll talk more about why combining data sources is so important in the coming weeks!
This said, perfection is the enemy of progress. Starting with one or two standalone data sources is infinitely better than none!
Set Up Your Own Reports
There are many free and low cost tools available that can help you create data visualizations, even if you don't have a background in analytics or design. Some popular tools include Google Data Studio, Power BI, Tableau, and even just plain Excel.
When it comes to creating your own reports, there are two important components to consider: the initial setup and ongoing maintenance. You can choose to tackle these tasks on your own, DIY with guidance, or outsource to a company like ours for added convenience. Regardless of which route you take, creating your own reports allows for the utmost flexibility and customization, ensuring that you get exactly what you need from your data.
Periodic Business Health Checkups
Similar to how you schedule a regular checkup with your doctor, you can also have a consultant perform a business health checkup. They will get to know your business, collect and analyze your data and provide you valuable insights and findings that can guide your decision-making between checkups.
Fractional Support
For small businesses who want expert guidance without the cost of an in-house analytics team, consulting firms (like ours) offer the support you need, whether it's for a one-time project or ongoing support, without breaking the bank. At Krause Analytics, our model is designed to adapt and evolve with your needs, ensuring you have the right level of support without any unnecessary expense.
Wrap Up
I hope you're on board that data visualization is more than just creating pretty charts and graphs. Visualization is a crucial tool for understanding and communicating the insights hidden within your data. As a small business owner, you may not have a dedicated analytics team, but with the abundance of tools and options available today, you can easily create visualizations that will help you see patterns and trends that you might not have noticed otherwise. So, the next time you are analyzing a table of numbers, try visualizing it. You never know what you may uncover!
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