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What is Data Storytelling and How to Use Data for Great Stories

December 11, 2023

Mile Zivkovic

On its own, data is powerful, but it’s just numbers. With data storytelling, you can help your target audience really understand data and make decisions based on it.

From the moment you woke up today to the moment you opened up this blog post, you’ve probably read at least one story. We’re surrounded by stories in various shapes and forms and as human beings, we love a good story, with its heroes, conflicts, and resolutions. But did you know that you could also tell a story with data?

Hiding behind every plain number and data set, there is a story waiting to be told. And today, we’re going to show you how you can become the master of storytelling with data and numbers.

What is data storytelling?

Data storytelling is a way to communicate information from data in a way that is engaging, simple and easy to understand. Storytelling is the most important part here - it means creating a compelling narrative rather than just stating facts and expecting the reader to come up with their own conclusion.

One of the basic tools for storytelling with data is visualization. Instead of using raw numbers to tell stories, we use visualizations in the form of charts, graphs and widgets to present data in an engaging way.

The ultimate goal of data storytelling is to convey your message in a way that your intended reader understands so that they can derive insights from it and take action. Informed with your data, key stakeholders can make better business decisions.

For example, if you run an e-commerce store and you have Facebook ads for your top products. You could show the CEO a table of the top-performing ads over time in the form of a table, highlighting that sales and conversions are dropping because of poor targeting on social media…

Or you could simply show a chart with the ROAS of your marketing campaigns dropping over time, despite the same ad spend. For example, the CEO could see that the ad campaigns are draining the marketing budget, which is the (not so) ideal start of your data story.

What are the key elements of a good data story?

A good work of fiction needs to have a plot, setting, characters, point of view and conflict. With data, things are a bit simpler. Here is what you’ll need.

Context: the background information behind your visualization. Why did a need arise to create a dashboard or a graph? How did you collect the data and why? Give your audience context so they can better understand the data they are looking at.

Narrative: provide a storyline between data points instead of just throwing them in the reader’s face. Show how the different data points connect to each other and why the person reading should care.

The insight: the core message you want to get across. In the example above, the message is clear: the return on ad spend is dropping and the company is wasting money on ads.

The action: what the reader should do immediately after seeing the story told with your data. For example, infographics are an excellent way of telling stories with data, but they lack the action aspect. Infographics can tell you why the cost of living is increasing or why Twitter is losing users. But in terms of being focused on a single audience and driving action… They are not that effective.

Supporting data visualizations: the data points that are not the core message but support it in one way or another. For more complex data storytelling projects, these are necessary for the reader to get a better understanding of the story.

If we recall the ecommerce example from the beginning, we could use visualizations to show that products are not selling because of the poor Facebook ads targeting, copy or something else. When the CEO sees a graph, they can much better understand the data instead of looking at a complex table or Meta Ads dashboard.

The role of data visualization in data storytelling

Almost every language in the world has its own version of “A picture tells a thousand words”. Or numbers, in this situation. Let’s look at this simple comparison:

table vs. graph
Source

On the left, you’ll see a table with temperatures in Seattle compared day to day. On the right, a line graph shows the exact same data. Which do you think is easier to understand?

The more complex the data, the more it is necessary to use data visualization to make it easier to understand. Visualization not only tells a story, but helps break down complex ideas into narratives that anyone with just about any background can understand.

Here are some ways data visualization helps with storytelling.

Good data visualization supports decision-making

The biggest power of data visualization is that you don’t need to be a data analysis expert to interpret complex data. While data analysts and researchers collect the data, the people reading the dashboards are most often managers and business leaders who want to make better decisions.

Instead of staring at rows of numbers and datasets in a table for hours, they need a quick way to go from data to insights. A well-crafted line graph, bar chart or scatterplot can turn those rows of data into information that is easy to understand.

A CEO of a company does not have hours for complex data analytics. For example, they want to find out at a glance what their best-selling products are so they can invest more money into marketing and research, and development in that sector without making assumptions.

It engages your audience

Your average product user is probably just a normal person looking to solve a problem. They’re not a developer or a data analyst that will know how to navigate complex rows of data and understand it all enough to make a decision.

Data storytelling and visualization democratize data and allow anyone to draw actionable insights. There is no need for prior knowledge of data analytics or a deeper understanding of your product.

If you have a SaaS product, you can help your customers become more data-driven and engage them with effective data storytelling.

For examples of SaaS products using data visualization, you don’t have to do a lot of research - we have plenty in our case studies section.

Here’s an example from our customer. Sentiance is a mobility and motion insights company that lets their customers track their vehicles in real-time using smartphone data. Sentiance customers can use visualizations to see where their vehicles are, how many riders they have on average and how many trips they make.

sentiance dashboard

Data storytelling empowers the average person to use business intelligence data. In the case of Sentiance, the end user can find out where their vehicles are at any point in time, who is driving them and whether they’re driving safely or not. At a glance, they can see where their entire fleet is.

The end user does not need a degree in data science to see what your product does and how it solves their pain point.

In fact, they can use data visualization to edit dashboards and slice and dice data to get personalized actionable insights. Your tool may not be giving them the business analytics data they need, but that’s okay. With a powerful tool such as the embedded dashboard editor in Luzmo, they can analyze data and create visualizations according to their own need.

Data visualizations build credibility

If someone who uses the Sentiance app said that one of their drivers is constantly late and uses their vehicle for personal needs, the statement would mean nothing without proof. But with data insights, that customer can show that the driver has in fact been constantly late, wandering around town and tending to their personal affairs.

Data visualization helps you build trust with the intended audience. They will know that the person behind the visualization knows and understands the data and has used it to get to key insights.

Five tips to tell better data stories

Everyone who works with data can benefit from using it to tell stories. For example, if you’ve discovered a breakthrough and want to tell the story to your internal team, you can choose to tell a story with visuals instead of raw numbers.

If you need to present an annual report, give the intended audience an additional choice besides scrolling endless tables.

And if you’re a data analyst or a product manager who builds many dashboards at scale, you don’t have to make them as bland as an Excel sheet. Use data to tell coherent stories and engage your audience to truly understand it and make better business decisions.

With the five tips below, you too can tell better stories with your data.

Research your audience

You wouldn’t give a five-year-old a Stephen King book and expect them to understand it. In the same way, you want to give your audience the kind of visual insights that are built just for them, so they can relate.

For example, a CEO is going to need a high-level overview of data. On the other hand, a marketing manager will want to look into granular data about campaign performance. The two would get the same data, but presented with a different level of detail.

Research who your audience is, and create the kind of visualizations they can understand.

Build visualizations around one core message

Good books typically have only one plot and the same goes for dashboards and visualizations. Pick a message or theme and extrapolate it, rather than trying to show all data you have in one place.

For example, your SaaS product churn is really high compared to the same time last year. You won’t bother to show the entire funnel and customer journey. Instead, you’ll create a dashboard highlighting churn as the main cause for concern, with a big graph showing an increase YoY. Then, you’ll use other visualizations to support your core message.

Choose the right visualizations

I recently wrote a post on chart types you can choose for data visualizations. I included 25 of them and was only barely scratching the surface. If you’re just starting out, you can get stuck wondering which of these numerous visualization types is the right one. And if you use a tool such as Tableau, there is very little help from the get-go - you’re stuck figuring out the best visualizations on your own.

For example, a line chart is great for tracking trends over time but it’s horrible for comparing numerical values for different categories in one place. Do your research and choose the visualization that best illustrates the story you're trying to tell and the metrics you want to show.

And if you’re stuck wondering which type of visualization to use, this flowchart can be of great help.

Narrate the story

Sure, complex information is easier to consume in the form of charts rather than numbers. But without the right data storytelling skills, all you will create is a bunch of charts cobbled together without any kind of logic.

If you create a dashboard with visualizations, explain rather than expect decision-makers to understand what you meant. Give clear titles to sections of your dashboards so that the viewer can follow a story from start to finish.

Structure the dashboards so that the most important information comes first, and all the supporting data comes afterwards.

If a graph, chart, or scatterplot needs additional explanation, provide it. In Luzmo, you can add tooltips - little elements on top of visualizations. By hovering over them, the viewer can get additional information on what the visualization means.

Combine all of these elements to tell a proper, coherent story and leave no room for interpretation. 

Finish with a strong call to action

You’ve shared your core message and it leads to a climax and ends with a resolution. The first part of your dashboard or data story should focus on getting the viewer engaged and backing your claims up with data. You should make sure the audience understands why you chose those key points and why they are relevant.

The climax of your presentation is the action you want them to take. For example, for a SaaS that churned, your climax could be the need to improve your onboarding process.

If you don’t have the final data, you can add preliminary data to reinforce action. For example, you can show usage metrics to highlight that customers who had high activity are more likely to stay.

The resolution happens after they’ve viewed your data story - it’s the actions they (hopefully) take once you’ve convinced them into your story.

Wrapping up

Data storytelling turns numbers into images that make a difference. No matter what industry you’re in and who your target audience is, data storytelling provides valuable insights in a way that your key audiences can understand them.

Go from raw data to beautiful visualizations with Luzmo. We can help you add embedded analytics dashboards to your product so you can tell a story and drive change. You don’t need better communication skills or data scientists on your team - you need Luzmo.

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