“Everyone dreads the weekly report” says my good friend and fellow analytics geek, Neil Mason. In his ClickZ article, How to Bring Storytelling to Analytics, Neil continues…
We all dread the weekly report. A spreadsheet arrives in your inbox, crammed full of numbers, perhaps a few charts, maybe even some attempts at “data visualization,” but usually without any narrative or explanation.
You look at it and think: “So what?” So what is it telling you and so what are you going to do about it?
We’re not short of numbers. We’re short of understanding about what to do about the numbers. As analysts, we’re complicit in this. We have a habit of sending out data rather than insights. We’re good at reading numbers but not great at telling stories.
We need to be telling more stories because people remember stories and they rarely remember a piece of analysis.
And do you see it? Neil just told a story. There’s a beginning, a middle and an end. You can visualize receiving the report, cringing and rolling your eyes, can’t you? Do read Neil’s complete article when you get a chance.
There’s a better way provide ‘data visualization’, so that the cringing goes away, leaving only nuggets of memorable insight. To demonstrate, I’m going to borrow from master storyteller, Jim Sterne.
Jim’s currently on tour through Toronto, Montreal and Ottawa speaking about The Art of Analytics. Here’s a scenario and a story to demonstrate how powerful The Art of Analytics can be to expose nuggets of insight quickly.
The Situation: You’ve been given a massive mound of customer data. Your task is to analyze this data and recommend new campaigns and offers for the most promising and profitable segments.
The Crisis: You also have to explain your rationale to the Executive VP, who will likely only give you 5 minutes of his time to present and get acceptance for your campaign.
The Solution: After some brainstorming and contemplation, you decide to:
- Create good segments that are measurable, differentiable, actionable, and large enough to matter. After some slicing and dicing, you decide on 4 customer segments.
- You conclude the appropriate metric to represent profit is Lifetime Value (LTV). You segment further by 3 levels of LTV.
- You rephrase your goal – Identify which of the 4 customer segments should be grown and which should be ignored, and what campaigns can grow the mid-LTV segment, doubling one specific high-LTV segment within 90 days.
What’s the best way to visualize this? You decide to use colour and size.
- Colour – 4 colours for 4 segments
- Size – Higher LTV, larger size
- Use circles rather than numbers
You’ve got 5 minutes with the Exec VP. Create 4 slides, 1 slide per minute, leaving 1 minute to spare for questions.
Increased profit next quarter is our goal. We’ve identified one specific group that has a potential for higher LTV. We are seeking your approval for 3 campaigns that will boost the LTV of this group into the highest LTV category in 90 days.
Let me show you. We classified our customers into segments (represented by different colours) and Lifetime Value (LTV), where larger circles mean higher LTV. As you can see, the potential is definitely there.
When we re-grouped by customer segment and LTV, it’s pretty clear the Reds bring the highest LTV and the Greens the lowest.
We should not spend resources on the Greens. They’re costing us money so let’s leave them to the competition. We should continue with current efforts to get more of the other 3 highest LTV groups. For the next quarter, we should aim to grow the mid-LTV Red subsegment into the high-LTV Reds.
To grow the mid-LTV Red subsegment, we recommend the following mix of offers and creative targeted to the following lists and channels. Upon further analysis, one micro-segment appears to be less accessible and we will not apply any resources to it.
May we proceed?
If you were the Exec. VP, wouldn’t you agree? Not bad for 5 minutes.
Much more effective and efficient in communicating insight and then taking action based on that insight, than only showing charts and numbers, don’t you think?
The Art of Analytics means letting your mind loose to visualize the story, and then creating a coherent, cohesive and compelling story that’ll be memorable.
Many thanks to Jim Sterne for letting us use these images to illustrate the story. You can hear more from Jim and other master analytics storytellers at the eMetrics Summit, coming to Toronto in March 2013.
Do you have a story to share?