Rivers of data flow through your business every day. Sales data, marketing data, employee data, operations data—you could spend most of your day combing through it all and still not have a good grasp of what’s actually happening in your company.
It’s a lot like flying an airplane. Imagine you’re the pilot, and you not only have to fly the plane, but also keep track of which passengers have pressed the call button, how many suitcases are stored in the luggage compartment, what the flight plan is for all the other airplanes in the fleet, how many mechanics the company has and which ones are working that day, and whether you have enough bags of snack mix for the flight.
Information overload. Even worse, all that extraneous data might keep you from doing the most important thing, which is to pilot the plane safely from Point A to Point B. To do that job, there are specific, vital pieces of information a pilot needs to have.
That’s why planes have dashboards. The dashboard narrows down the data to communicate only what the pilot needs to know to do his or her most important job.
Your business data dashboard should do the same thing. Before you decide what goes on it, you need to know what the goal is.
The Right Dashboard for the Job
When you’re designing a dashboard for your internal team, start by asking two questions: Who will be using it, and what kinds of information will they need?
We can break dashboards into three broad categories: operational, strategic, and analytical. Each category has a different goal, and therefore will track different metrics:
Your goal here is to monitor daily business processes and current performance. To do that, you’ll choose KPIs that keep you informed about the day-to-day function of your business.
This dashboard zooms out to give business leaders a macroscopic view of business operations and strategic goals. How does performance measure up against historical benchmarks or future objectives? What milestones have you reached, and what’s the next goal to achieve?
This dashboard focuses on business intelligence. The goal here is to identify trends, predict future outcomes, and pinpoint key insights that can help you make better business decisions.
Of course, at their most basic, all dashboards are analytical in the sense that they are presenting key data to monitor performance and make decisions. And that brings us to our next question: what information should make it onto your daily dashboard?
Five Things Your Data Dashboard Needs to Tell You Every Day
Let’s go back to our airplane analogy. There is certain information the pilot absolutely must know in order to fly the plane. That’s the information that makes it onto the dashboard. He might also benefit from information about luggage weight limits, passenger capacity, flight attendant hours, and required rest hours, but these metrics are peripheral to the key data. They can safely be ignored in the moment while the pilot focuses on the most important information: altitude, airspeed, rate of ascent, direction, and other key flight metrics.
The goal, then, is to decide which information helps you get to your destination. You can do this in three stages:
* Identify your key metrics
* Determine the underlying metrics that contribute to those key indicators
* Pinpoint contributing factors that influence those underlying metrics
For example, let’s say your key metric is net profit. Underlying metrics might include sales pipeline and marketing costs. You might also need to know specifics about those numbers such as cost per lead, opportunities closed, and sales per source. That information would constitute your third layer of metrics.
If you need ideas to get the wheels turning, consider these five categories of data that your business should monitor every day:
This is the heart of your business. Cash flow, revenue, and profit metrics tell you at a glance whether your company is thriving or struggling. The specific metrics you choose may vary based on whether your company is a startup or a publicly traded company, but all executives rely on numbers like net profit margin, burn rate, year-over-year profits, and gross revenue to maintain a snapshot view of financial performance.
Sales data tells you whether your marketing is working, whether customers want what you’re offering, and how you measure up against the competition. Perhaps the most important metric to watch is your sales revenue since that ties into your financial performance, but you’ll also want to monitor year-to-date sales growth, year-over-year growth, revenue per customer, rolling pipeline, opportunity close rate, sales per source, and average sales price.
Marketing outcomes contribute directly to your financial and sales performance, so if there’s a problem with your marketing data you need to find and correct it immediately. The problem is that it’s easy to get bogged down in marketing data that doesn’t really tell you much. This is where you have to go back to your need-to-know model of data: which metrics will give you the key information you need to make effective strategy decisions? These will probably include customer acquisition cost, percentage of new customers driven by marketing, number of marketing qualified leads, and lead-to-customer conversion rate.
4. Customer Data
Customer data gives you insight into what your customers think about your company and how they most commonly interact with you. Gaining new business isn’t enough. You also need to create loyal customers with a high lifetime value. With that goal in mind, you’ll want to track customer lifetime value, customer return rate, Net Promoter Score (which measures customer loyalty and satisfaction), and churn rates.
5. Key Initiatives
These metrics flow from your business objectives and will vary over time. They may include hiring and recruiting, employee engagement, diversity, or a new product launch. They may also include metrics from some of the other categories we’ve discussed such as a goal to double sales by Q3 or launch a new marketing website.
As you consider specific metrics for your dashboard, keep these guidelines in mind:
Remember the “key” in key performance indicators
Are these metrics really essential to the operation or strategy of your company? The fact that you have the data doesn’t necessarily mean it’s important. KPIs should earn a place on your dashboard by contributing relevant information you can use to make decisions. Otherwise they create visual and mental clutter.
Choose actionable KPIs
Do the metrics you’ve chosen help you take beneficial or corrective action? Someone should “own” that metric by having the authority and support to act on it.
Consider the audience
Is this dashboard for your C-suite executives or your sales managers? Different team members need different information to perform effectively in their roles.
Make it easy to interpret
You have tons of options for displaying your data: charts, graphs, numbers, speedometers, and more. But the goal isn’t to have a dashboard that looks impressive. It’s to digest the data at a glance. With that in mind, provide context for your data (either historical or goal-specific), provide drill-down views if needed, and keep key information visible at all times so you can find you need immediately.
If that sounds like a lot to remember, don’t worry. No matter what kind of dashboard you need to build, always start with these two foundational questions:
* What is your intended destination?
* What information do you need to fly the plane?
We’ll help you with the rest.