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Your Definitive Guide To Building Valuable Narratives Through Data Storytelling

An introduction to data storytelling by datapine

Stories inspire, engage, and have the unique ability to transform statistical information into a compelling narrative that can significantly enhance business success.

By gaining centralized access to company data and presenting it in a visual way that follows a logical path and provides invaluable insights on a particular area or subject, you stand to set yourself apart from your competitors and become a leader in your field.

Here, we’ll explore the unrivaled power of data storytelling in the digital age while looking at a mix of powerful data storytelling examples generated with a modern dashboard creator.

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What Is Data Storytelling?

Data storytelling is the process of communicating relevant insights in an understandable and widely accessible format. By using a mix of narratives and visualizations, businesses can put their performance into context and make informed strategic decisions.

Beyond this data storytelling definition, the power of a data story lies in our natural affinity for plotlines and narratives that convey information. By leveraging the right tools, it’s possible to take quantitative metrics or information, arrange it into a logical format, and create a narrative that simplifies complex information, presenting it in a way that engages a particular target audience.

That said, data storytelling is composed of three main elements that make them a much more engaging method than traditional statistics. These are narrative, data, and visuals. In order to tell a good and engaging story, it is necessary to build an interesting narrative that keeps the audience interested in the data. This is possible thanks to the smart use of visualizations that transform the data from just numbers into actionable insights. 

We will look at each of these points more in detail later in the post, now let’s dive into the host of business-boosting benefits coming from telling efficient data stories.

Why Is Data Storytelling Important?

Tales help make sense of the world around us, and this very notion is the beating heart of using data to tell a story.

According to a study performed by Skyword, content that features a mix of words and visuals drives 34% more engagement than text-only articles, blog posts, or whitepapers. You have everything to gain by harnessing the power of data visualization, visual analytics, and using a mix of relevant insights to create a compelling narrative.

Here are the key benefits of knowing how to tell stories with data:

  1. Inclusion: As mentioned, at a fundamental level, stories help us make sense of a complex and occasionally bewildering world. By using the right data storytelling tools to measure, track, and extract relevant data and place it into a visual format that fits into a narrative based on specific company goals, you will make your analytical information accessible to a wider audience. By doing so, you’ll be able to share important messages in a way that inspires, encouraging buy-in from the right parties or stakeholders as a result.
  2. Decision: By telling a data story through a powerful KPI dashboard software, you'll be able to drive improved decision-making throughout the organization in several critical areas of the organization. If your audience, whether internal or external to the organization, can follow a narrative and extract the right information from your presentation, they'll gain the insight they need to base their strategies on water-tight data, making the organization more efficient, economical, and successful as a whole.
  3. Organization: In a world dominated by data, knowing which insights to explore can prove daunting. But by working with the right data storytelling tools, not only is it possible to simplify the analytics process, but you'll also gain the ability to arrange your data in a way that's effective, efficient, and ultimately saves you time. As you're no doubt aware—in business, time is money.
  4. Action: If you tell stories with data and tailor your presentations to your target audience, you'll drive actionable results. If the person is inspired by what you have to show them, and they understand it on a deep, meaningful level, they will act in the desired way. For instance, if your audience is internal, they may formulate an initiative that helps enhance the company's marketing efforts. Or, if you're presenting to external stakeholders through storytelling with data, you might prompt them to increase their investment.

“Storytelling is the essential human activity. The harder the situation, the more essential it is.” - Tim O’Brien, author

7 Data Storytelling Techniques & Best Practices

It’s clear that storytelling with data is powerful. To place the notion of knowing how to tell stories with data into a practical perspective, here we look at a mix of data storytelling techniques and best practices backed with actionable advice to get you started. Let’s dive into them! 

Data storytelling components: narrative, visuals, data

1) Turn metrics into actionable concepts

As we’ve explored, knowing how to tell a story with data will empower you to turn metrics into actionable concepts or insights.

One of the most effective ways of transforming quantitative data into a results-driven narrative is by working with key performance indicators (KPIs). By harnessing the power of an interactive business intelligence (BI) dashboard, you’ll be able to select the KPIs that align with your core organizational goals, using the perfect mix of graphs, charts, and visuals to build a narrative that brings your data to life.

To get under the skin of this most priceless concept, read our guide to data-driven dashboard presentation.

2) Build a narrative 

Coming back to the first component of the ones we mentioned above, every solid story, regardless of its theme or format, has a definitive plot: a beginning, a middle, and an end. By using data storytelling templates, tools, and platforms, you can populate your plot with the visualise that will drive the narrative forward while conveying your message in the most effective way possible. Just like with any movie or book, your data stories should begin by setting the current scenario, continue by providing insights that lead to the conflict, and finalize with useful recommendations to move forward. 

To improve your processes with plotting, you should sit down in a collaborative environment and consider the primary aim of your data-driven story while outlining the beginning, middle, and end. With your framework firmly in place, you should start to populate your plot with the KPIs and visualizations that not only represent what you have to say but are also most relevant to the data you’re looking to present. By working through your plot logically and fleshing it out with the right visuals you’ll help streamline processes within your organization, increasing efficiency and productivity as a result. Let’s look at the visualization component next. 

3) Define your data sources 

This is probably one of the briefest points discussed in this post, however, it is of utmost importance in the process. Once you have built the skeleton of what your narrative will look like, you need to find the data that will help you tell it as this is the bases for successful analytical storytelling. Here you should prioritize only the data that is beneficial to your analysis. Just like we will see later with the use of visuals, you don’t want to overwhelm your audience with infinite data points. Think carefully about the variables you will use and keep only critical data as this is an excellent way to reduce cognitive load. 

The cognitive load concept is built on the premise that “since the brain can only do so many things at once, we should be intentional about what we ask it to do”. That said, it makes total sense to keep your data points focused. 

4) Choose the right visualizations 

Visuals are the third and last of the relevant components any successful data story should consider. Once you have built an efficient narrative and selected the data sources and KPIs you will use to tell it, it is also time to select the graphic representations that will bring your entire story to life. 

There are a bunch of visuals out there such as bar charts, line charts, tables, and pie charts, just to name a few. While it might sound exciting to benefit from all of them, you need to be careful in the way you decide to use them and when. Not all visuals will work for every purpose. Here it is important to follow specific data visualization techniques to stay on the right path. For instance, using a pie chart to compare more than 3 elements can end up crowding the visual and making it difficult to grasp. Instead, using a bar chart to show how the different elements compare to each other can be way better. 

Another important note when it comes to visuals is to keep them simple. Avoid using any 3D graphics that can make your data harder to understand. While giving dimension to your charts might seem sophisticated, it can also significantly affect the way the visual is perceived. So always keep simplicity as a priority. On that note, keeping a clear color palette throughout the presentation can also make it more cohesive and understandable.

5) Eliminate any clutter 

Another important best practice is to keep your storytelling focused. Think about it as building a presentation. You don’t want to overwhelm your audience with a bunch of text and numbers. This is true for a centralized view of data such as dashboards as well as for a more detailed view on a specific graph. 

On one side, dashboards are extremely useful to build a narrative around your KPIs, however, filling them with too many indicators can also be confusing. Try to only include the ones that will actually provide value to your story and avoid any unnecessary clutter. You can also follow dashboard design best practices to make sure you are on the right path. 

On the other side, charts and graphs can also be cluttered if they are not built correctly. Here you should prioritize only the datasets that you need to make your point. For example, if you want to display the top products by revenue, use only 5 products instead of 10 as too many data points can mislead the actual narrative.  

6) Simplify & make connections

If your organization is informed, well-oiled, and strategic across the board, you will grow, evolve, and boost your profits over time.

By harnessing the power of storytelling through data, you’ll be able to connect the dots, simplifying ideas and making the kind of connections that will give your business a newfound sense of strategic direction.

To squeeze the maximum benefit from your data storytelling efforts, you should focus on creating an interactive dialogue between your insights and your audience, using a mix of historical, real-time, and predictive data to drive your message home, whether for financial reporting processes or strategic development of the company.

Moreover, you should create a balance or harmony between your words and your visuals to make it easier for your audience to make the necessary connections that will result in business-enhancing actions.

The most powerful way of creative data-driven narratives that simplify insights is to take a “storytelling with data visualization” approach to your efforts. Now, we’re going to explore this invaluable concept in action.

7) Rely on the right data tools 

While it might seem like all the data storytelling techniques and best practices we just mentioned are meant for professionals, that couldn’t be further from the truth. That, if you use the right tools to make it happen. Today, there is a wide range of online data visualization tools that are user-friendly and provide users with the necessary features to generate understandable and interactive stories with their data without the need for any technical skills.

For instance, datapine offers an intuitive dashboard tool with multiple charting options that allow you to create an efficient narrative based on your most important KPIs and data sources. If you are not ready to build your own dashboards, the tool also offers over 80+ templates to help you tell efficient data stories in several industries and functions within minutes. Having access to these kinds of tools makes the storytelling process much more accessible since it empowers users from any level of knowledge to use data for their decision-making process. In time, your entire organization will become data-driven and gain a big competitive advantage. 

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Data Storytelling Examples Through Visualizations

As mentioned throughout this post, data visualization storytelling is the best way to share stories with your audience. It’s the glue that binds all of the ideas we’ve mentioned so far. To demonstrate its power, here are two types of strikingly different but equally powerful storytelling with data examples used for building an effective narrative with your insights. 

1. A centralized view with dashboards 

As mentioned earlier in the post, there are two ways in which you can tell your data stories. Dashboards are visual analytical tools that provide users with a centralized view of their most important performance indicators. Each of these KPIs plays a fundamental role in the context of the narrative that is being told. Thanks to these interactive tools, users can navigate and explore the data in an interactive way. Let’s look at two data storytelling examples using dashboards. 

a) Employee Performance Dashboard Example

Primarily used to streamline busy human resources departments, this HR dashboard that focuses on employee performance features a mix of KPIs that build a comprehensive profile around attendance rates, individual productivity, training costs, and overtime hours accrued.

Data storytelling through HR: employee’s performance and behavior

**click to enlarge**

It’s possible to use this dynamic mix of charts, graphs, and graphical information by utilizing HR analytics tools, and build an effective narrative relating to employee performance over a particular time frame, creating a compelling plot that will lead to increased productivity and enhanced economic efficiency as well as and support strategies that will boost staff engagement exponentially.

By looking at this dashboard and related HR KPIs, it’s easy to see how you could build a plot around this perfect storm of insights. Coupled with the data visualizations featured in related HR-based dashboards, the possibilities are seemingly endless; from creating effective HR reports to obtaining a birds-eye view of the whole human resources processes and development.

Featured KPIs:

  • Absenteeism Rate
  • Overtime Hours
  • Training Costs
  • Employee Productivity

b) Sales Performance Dashboard 

Our next data story example focuses on the development of a sales department over time. This sales dashboard provides a comprehensive picture of the progress of the department focusing on sales growth, sales targets, ARPU, CAC, and CLV. Sales is one of the most important areas for any business offering a product or service. Therefore, being able to build an understandable story of its performance is critical to ensuring growth and profitability.

Sales dashboard as a data visualization storytelling example

**click to enlarge**

By using a mix of current and historical data, this dashboard allows the sales team to clearly understand how critical metrics developed in time and find improvement opportunities to reach their end goals. 

The level of interactivity provided by this data storytelling tool allows for a more complete and intuitive analysis process as the graphs and charts can be easily filtered and explored to discover new insights and support any discussion that might arise in the process. 

Featured KPIs 

  • Sales Growth
  • Sales Target
  • ARPU
  • Acquisition Cost
  • CLV

2. KPIs for a detailed view 

As mentioned, dashboards provide a centralized view of the most important KPIs for a business. These KPIs are portrayed with the help of interactive charts that make the data more understandable. We already mentioned a few best practices when it comes to building charts to tell your data stories. Now let’s look at some examples to put their value into perspective. 

a) Compliance Rate KPI

A valued fulfillment-based KPI across industries, this dynamic mix of graphs offers a panoramic snapshot of supplier compliance rates over a particular time frame.

A key component of our procurement dashboard, the compliance rate KPI is a prime example of how powerful an individual visualization can be in communicating vital information and how it can fit into a broader narrative.

Compliance rate is one of our data storytelling examples focused on the procurement industry, and broken down per type of suppliers.

It’s possible to place this KPI into the heart of a story surrounding procurement structures, success, and processes, offering a breakdown of compliance per supplier in addition to the company’s overall compliance success rate.

Connected with a tailored mix of our additional top 10 procurement KPIs, it’s possible to develop a story that helps to convey key trends, connect organizational dots, and share actionable insights that drive real change. A prime business report example of data storytelling in action. 

b) Current Ratio

Arguably one of the most important metrics when it comes to financial analytics, the current ratio measures the ability of a company to pay its financial obligations in a short period of time, often within 12 months. 

Current ratio as an data story example

Now, the current ratio alone would not tell us enough information to build an accurate story or extract any valuable conclusions. This is why this graph template was built with complementary data that provides context to it. The current ratio is calculated by diving the current assets with the current liabilities. Therefore, the chart provides a breakdown of how each of these indicators changed over the course of the last 12 months. This information allows the audience to understand more clearly how the data fluctuated and how it reach its current value. 

Complementing this chart with others in an intuitive financial dashboard will provide a complete picture of a business's financial health and provide the necessary tools to ensure continuous improvement. 

Your Chance: Want to test a data visualization software?
Explore our 14-days free trial and benefit from visual data storytelling!

Key Takeaways From Efficient Data Stories 

"You’re never going to kill storytelling because it’s built into the human plan. We come with it.” - Margaret Atwood, author of The Handmaid's Tale

As we reach the end of this practical guide we hope you understand the main principles behind efficient storytelling of data. We covered a list of benefits, best practices, and examples to put the power of this practice into perspective. The key takeaway should be to always keep in mind how narrative, data, and visuals intertwine to build efficient stories that can drive a business forward. Using these three elements correctly will allow you to support your ideas with facts while keeping your audience engaged in the process! 

Industry or niche aside, storytelling with data will propel your business to new and exciting heights. With the help of datapine's 14-day trial, you can start your own data story and embrace the power of data storytelling today!