What is Data Storytelling? Why do Businesses Need to Use it?

By | November 17, 2021
What is Data Storytelling

The internet is full of data on every aspect and you can search whatever you want and get information on any topic. However, we have various solutions and tools for gathering data such as BI tools, dashboards, and spreadsheets.

Such tools provide you with numeric data and graphical representations, but they do not provide the narrative that is essential for getting in-depth insights.

Now, the question arises, how can companies transform their data centers into more profitable centers where the stakeholders will be benefited by getting relevant data within time and in the proper language and format?

To cater to this problem, data storytelling comes as a solution, which is now being adopted by various companies.

In this article, we will discuss data storytelling and how it presents complex data effectively. Also, you will get to know about the data storytelling process and its key benefits. So, let’s get started.

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What is Data Storytelling?

The major concept of data storytelling is to transform the gathered data from various sources into a meaningful story that is enough for impacting the decision-making process. There can be various approaches that any company can follow for data storytelling. Below, we have mentioned two fundamental approaches usually followed by many companies:

  • Traditional reporting: In this approach, the data is being used to represent what is going on within the company, why a particular scenario has occurred, and how it occurred. Also, it will highlight the actions that have been taken for resolving a particular problem.
  • Influencing story: This approach focuses on text-styled reporting in the form of presentations, informal emails, and others. It influences people to make the right decisions in a specific scenario based on the gathered data.

Earlier, dashboards and reports were considered to be the best approach for presenting a business’s performance. But this approach only focuses on highlighting the numbers. People have to go through complex numbers to analyze and understand what it means for the business. Also, this type of data can be out of the league for a non-technical person.

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However, the influencing story format is the best way to share the performance report of the company as it will explain what has actually happened and what can be the company’s next step.

Why is Data Storytelling the Future?

Data storytelling is an approach that helps to communicate information tailored for a particular audience. Having a compelling narrative will have an impact on the people.

People used to share stories to explain even a simple concept so that it becomes easier for others to understand and remember the concept. Also, this helps to retain the information for a longer time period. Storytelling is one of the common methods for sharing information effectively. The storytelling approach can make complex data simple and understandable.

Data storytelling combines three major fields of expertise that are discussed as follows:

Data Storytelling

  • Data Science: This field of science helps in extracting useful information from large amounts of data and creating useful insights. Data science has made it possible to work with data. However, data scientist does not have storytelling skills, but they know how to collect, arrange, and process data to make it more sensible from a non-technical person’s perspective.
  • Visualization: With the introduction of visualization tools like dashboards, presenting data effectively has become much easier. Also, dashboards act as a reliable solution for helping individuals comprehend the vast amount of collected data.

With visualizations, you can present data in graphs, charts, and other visual representations. However, visualizations are not sufficient as they only depict the numbers without providing the context of the data to explain why it happened.

  • Narrative: Narratives make it possible to present data in a simple language and format that adds context to the data. Narratives help to convey relevant insights effectively along with the help of different types of visualizations. It is considered to be an ideal option for representing why it happened.

When you combine all the three fields mentioned above, you can create a data story that will help to create meaningful insights, which are helpful to resolve various business problems.

Significant Examples of Data Storytelling

Below are some examples of how different companies utilized the concept of data storytelling to communicate with their customers efficiently:

  • Spotify

Spotify

One of the emerging music apps “Spotify” has recently sent their annual recap stories via email to their customers. They have used short stories to share with users the amount of time that they have listened to music on the Spotify app. This seems to be an interesting way for communicating their values to the users.

  • Slack

Slack

Slack is one of the most popular communication tools that has replaced the traditional way of communication, such as lengthy email threads. It is leveraging the storytelling technique for connecting with its customers while sending invoices. Instead of sending an email with an attached invoice, Slack sends a visual story that tells users how they have used their services.

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  • Uber

Uber

Uber also communicates with its customers using the storytelling approach. The company focuses on telling users the value that its services have provided them. They share personalized statistics of the user’s experience with their services.

Importance of Data Storytelling

The main goal of the storytelling is to modify information depending on the customers to whom you are going to present that information. It helps to create an influential story that can persuade the audience and offer them the critical insights required to make a relevant decision.

Below are some points that elaborate how effective the data storytelling process is:

  • Data storytelling provides meaning to complex data.
  • It allows you to extract meaningful information from data and provide insights through compelling stories.

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Process of Data Storytelling

The process of storytelling is to mold the gathered data into a specific story that is easy to understand even by a non-technical person.

Below is the process of data storytelling:

  • Collect information about the current scenario of the company.
  • Create different characters with real names to ensure a strong impact on the audience. Start the story by clearly identifying all the characters in it.
  • Create urgency for identifying the problem.
  • You need to take necessary actions for finding the possible solutions for the problem.
  • Find the solution.
  • Track down the time taken to complete the steps involved in the problem-solving.
  • Get insights, key messages, and inspire closure of the problem.

Well, the above-mentioned are not the standard steps to make the most of data storytelling. Companies can create different strategies to train people for creating a better storytelling process for getting better results.

Benefits of Data Storytelling

If the company implements the data storytelling process in the right way, they will likely get benefits out of it that can positively impact the business in the long term. Mostly this strategy is followed by businesses for improving the quality of their products.

Below are some benefits that a company can get by utilizing the storytelling approach:

  • Data storytelling works on every potential data value and takes necessary information out of it that can be used for creating an impactful story.
  • It provides in-depth insights via data visualizations that can improve customer engagement.
  • Data storytelling has the capability of influencing business actions and impacting the decisions of organizations in a positive manner.
  • It helps businesses to perform data analysis in a more effective way, i.e., storytelling terms.

Conclusion

Data storytelling is a great way to present complex data in a meaningful way. It tends to create an impactful narration of the business data and mold it in such a way that is easy to understand by everyone. It combines data visualization, narration, and various data science technologies to provide context to complex data.

To create a strong connection with customers, companies must look forward to implementing the data storytelling process.

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