If you want to survive in business today, you have to be investing resources into collecting, learning from, and making decisions based on data.
For a lot of businesses, interpreting data can be a real challenge.
That’s where data visualization often comes into play.
“Data visualization” is a general term that describes any effort to help people understand the significance of data by placing it in a visual context. Patterns, trends and correlations that might go undetected in text-based data can be exposed and recognized easier with data visualization software.
A good example of a data visualization tool (and one that you’re probably fairly familiar with already) would be a business intelligence (BI) dashboard, which displays an enterprise’s real-time metrics and key performance indicators (KPIs) and enables upper-level management to make informed business growth decisions.
If, however, you’re not as familiar, and if you haven’t yet started investing in Big Data at your business, now is the time.
Here are seven ways data visualizations can impact growth at your business:
Easily and quickly digest information
Fun fact: the human retina can relay data at about 10 million bits per second – the same rate as an Ethernet connection. Unfortunately, the majority of BI reports that executives receive are compiled of static tables and charts. Static reports like this don’t make information quite transparent enough for those who have to understand it.
According to Aberdeen Group, managers who utilize data visualizations are 28 percent more likely to find relevant information compared with those who use managed dashboards and reporting tools.
They also discovered that 48 percent of those who use data visualizations are able to find the information they want without the help of tech support.
Data visualizations provide key stakeholders with the ability to easily connect the dots among multi-dimensional datasets. Some examples may be: heat maps, fever charts and other rich graphical representations.
Connect the dots between business and operational activities
Data visualizations offer a way to discover relationships and patterns between business and operational activities.
One way is by making it easier to see how your daily activities affect your overall business performance, allowing you to discover which operational change generated the change(s) in business performance. Or maybe you want to compare your company’s current performance with the past in order to predict the future of something such as, monthly sales or other KPIs.
By being able to see historical trends compared with current trends in your data, you can drill down to see what contributed to your growth or fall in business, allowing you to either repeat what worked or change what didn’t.
Spot trends quickly
One of my favorite benefits of data visualizations is how it allows me to identify new customer behavior and changes in the market extremely fast.
Data Informed provides an excellent example of this on their blog:
Business leaders for a supermarket chain can use data visualization to see that not only are customers spending more in its stores as macro-economic conditions improve, but they are increasingly interested in purchasing ready-made foods.
A deeper dive into customer sentiment and other data reveals an emerging opportunity for the company to launch a catering service to customers who are entertaining more frequently and spending more across related food and beverage categories. Insights like this enable the company to act on this new business opportunity ahead of its rivals.
Pinpoint the reason behind dips in business
Data visualizations allow you to directly interact with data, bringing insights you can instantly act on to the surface.
For example, a canned report or Excel spreadsheet can inform an executive for an automotive company that sales for its sedans are down for a particular month.
However, it won’t inform her why sales of the sedans are down. Using real-time data visualization, the executive can view the latest sales figures and see which models of sedans are underperforming and the reason for drop in sales – a discount offered by competitors.
In this example, the executive can think on her feet and provide a solution for her company in real-time.
Learn intimate details about your customers
Data visualizations provide you with a 360-degree view of your customer. They allow you to gain so much information that you must be extremely careful with how you utilize it.
For example, Target was sued for privacy violation after the retailer began targeting a young girl with pregnancy-type ads after some recent purchases she had made. Basically, they knew before her father even did, that she was pregnant.
These tools can interconnect data from social media, mobile, web and other Big Data analytics sources, allowing you to identify each customer, what she wants and when, all in real-time.
Customers don’t always hate when you know more about them. In fact, they appreciate it when companies, such as Amazon, make it product recommendations based on the data it gathers.
According to Data Informed’s blog, Amazon’s algorithm gives each customer a different web page, which reportedly provided Amazon with a 27 percent growth in sales to $13.18 billion during its third fiscal quarter in 2012, up from $9.6 billion during the same quarter in 2011.
Innovate before your competitors do
In the past, big companies hosted consumer panels, which helped them learn what consumers thought about product ideas and what they thought they wanted as features in these products and services.
Today, data visualizations make it possible for teams to make business and product decisions faster by interpreting large sets of data in a relatively short amount of time—without ever having to necessarily speak to customers face-to-face or 1-on-1.
That’s not to say there isn’t still value in talking to customers—there is. Getting qualitative feedback from customers remains an essential part of improving products and growing a business—but the ability to collect and learn from quantitative data in order to get a leg up on competition is becoming more important than ever in business. In short, data visualizations make the interpretation process a lot easier and business/product development as a whole a lot more efficient.
Combine your data with public data
The nice thing about a data visualization is that it allows its users to analyze complex data extracted from various sources easily.
Why not combine your company’s data with public data? That’s exactly what SizeUp thought. This tool does just that, allowing you to see how you stack up against the competition in your area.
Here are just a few of the benefits of combining data sets:
- Collect product reviews from the web which can feed into your product development and/or support processes
- You can monitoring competitor pricing and make sure you prices are competitive
- It can show companies where to market a product first or where to place a product
What else do you wish data visualizations did? They may already do it, but we may have forgotten to mention it in this post. Tell us your Big Data wish in the comments below, and we’ll tell you if that’s a reasonable one.