By now it is commonly known that people learn and understand information in different ways. Many people identify with the “visual learner” category (including this author) and according to research 65% of the population are visual learners. Fortunately there is wealth of guidance and resources to support visual learners from pre-school through post-graduate studies. But what happens when you leave school? There is surprisingly little information or support for different styles of learning when you enter the business world (PowerPoint presentations with uninspired pie charts and clip art don’t count.) Given the focus on financials and measurable data, not understanding the numbers can translate to serious problems for your business.
With the overwhelming popularity of infographics, it is clear that there are advantages to providing information in a graphically represented format. For example, below is the text for the “Beginner’s Guide to Google Remarketing” from digitrio.
“In essence, Google Remarketing places cookies or specific pages / all pages at your website when they leave without becoming a customer. It remembers which visitors chose not to become customers, and then it tracks them to the next website that they interact within Google Display Networks of Sites. Once there, it exposes them to a branded advertisement relating to your business.”
Unless you are already familiar with remarketing or paid search (and as this is text from the “Beginners Guide to Google Remarketing” than that is unlikely), this explanation may be difficult to understand. However, let’s now take that same information presented visually.
Clearly this is a far more attention grabbing and engaging way of presenting information. If you’re a visual learner, it is most likely a much easier way to understand and digest that information. This is important because the way in which information is presented affects your ability to retain it. NYU psychologist Jerome Bruner discovered in his studies on visual communication that people retain 10 percent of things they hear, 20 percent of what they have read, and around 80 percent of things they see or do.
So what’s a visual learner to do? I spoke with an expert on the subject, Soo Somerset, founder of Connect the Dots Marketing Solutions She coaches companies on improving their processes and understanding data through imagery.
Soo notes that figuring out the key metrics for your business and understanding the factors that drive metrics is critical. Key metrics are the data by which you measure the health (or lack thereof) of your business. Incoming revenue is an obvious metric to measure, but there are less obvious metrics like how much money it cost you to bring in a piece of business (also known as “Customer Acquisition Cost”). “In some cases, the way in which data is communicated can be transformative, allowing decision makers to make connections and insights that they would not have grasped had the data been communicated in a more traditional format,” she said.“A failure to grasp key metrics of a business impedes the ability to transform a startup into a viable business or to accelerate growth.”
Metrics are perhaps even more critical to small businesses, which undergo rapid change and may still be figuring out the key factors for growth and profitability. Yet, small businesses often lack the resources to present and analyze their data in a way that allows them to fully understand it. While a large consulting company can take these figures and make them more visual-centric, whether through graphic designers or expensive software, small businesses can rarely afford to make this investment. Financial software tools that are available to small business are generally either numbers-based or present one-size-fits all visuals, that aren’t customized for any particular business. As a result, the businesses that most need to understand their financial metrics usually have the least resources to do so.
So how do you, as a small business owner,get started figuring out what your key metrics are and gaining an understanding of what drives them? We asked Soo for some advice on the topic:
- Don’t just accept information that doesn’t make sense to you. “Just about any kind of data can be presented visually, including incoming revenue, operating expenses, and overall labor costs,” said Soo. “If you have a vendor doing work for you, a bookkeeper for example, ask them to create their reports using visuals, at minimum charts and graphs.” If they won’t do it, it may be time to find a different vendor.
- Make sure you have the right data…and know how to use it. With all the data available, it’s easy to experience information overload. According to Soo, a challenge small businesses face is that they may have lots of data about their business operations, but may not know the data on which to focus. “In our experience, one of the biggest game changers for companies is being able to sift through the noise,” said Soo. “It pays to do some thinking about what metrics are most important to your business and prioritize presenting that information in an easily understandable way.”
- Find out what’s working and what isn’t. If you’re spending a lot of money on advertising and marketing, it’s important to know which expenses are actually generating leads. If you don’t know what marketing, advertising or other strategy is responsible for bringing you business how can you know whether it is working? To start, make sure that you are tracking how your leads learned about the company, by including a “How did you hear about us?” function, and make sure you are effectively using Google Analytics to track website visitors.
- Your most important metrics may not be on your financials. While it’s important to know core numbers like sales, cost of goods sold, and your debt servicing costs, there may be other metrics that are key to understanding the viability of your business model.“The “Customer Acquisition Cost”” metric is key to evaluating your pricing structure,” says Soo. “Once you can visualize the component costs that go into “Customer Acquisition Cost,” you can make intelligent decisions about whether that cost can be reduced or whether you need to change your pricing structure.”
To make intelligent decisions as a small business, you must have data about your business operations, know which data will be critical to determine the health of your business, and be able to understand what drives those numbers.“Visualization can be the difference between devising informed strategy and operating in the dark,” says Soo. It’s the difference between looking and seeing.