Every company knows the value of having the right KPI dashboard. Making your data public to your team keeps everyone in the loop and helps them make better decisions. The companies I work already know why they need dashboards.
The main challenge my clients face is how to design effective dashboards. Their first inclination is to add as many widgets as possible which simply overwhelms their team. Eventually, their team ignores the dashboard since it isn’t actually helping them.
In this article, I want to show the principles behind every effective dashboard and how they are used in the real world.
Let’s start with the hidden benefits of designing a really effective dashboard.
The Hidden Benefits of Effective KPI Dashboards
This question may seem redundant but why do you want a KPI dashboard? What are you going to do with the data once you have it?
If you aren’t sure then we need to go back to the beginning and start with your business goals. What’s important to your business right now?
Let’s imagine that you’re interested in acquiring more users through your website. A KPI dashboard could show you the latest leads in near real-time. It could also show you where they are coming from (traffic sources) and what else they did on your website.
A company called Tint created a dashboard that would alert them if any large client signed up for their service. They could then immediately follow up with them and start a conversation with those high-value leads.
This is a great example of how you can use data to inspire the right actions. This sounds simple but according to Forrester, only 29% of firms are actually good at this.
While 74% of firms say they want to be data-driven, only 29% say they are good at connecting analytics to action. pic.twitter.com/fY5OMkG2vZ
— Forrester (@forrester) March 18, 2016
There are also “hidden” benefits of a having a great dashboard:
1. Quickly Inform Everyone on Key Business Metrics
If you feel like your team doesn’t know what is going on, then a dashboard can solve this. You could even buy yourself a TV and show the metrics there. You can get everyone on the same page by deciding what are your important company wide metrics.
2. Consolidating Multiple Data Sources
Dashboard tools also let you connect different data sources into one. Imagine seeing your sales data from Salesforce alongside your marketing data from Google Analytics. This can be done manually in Excel but dashboard tools can automate that process.
3. Align Different Teams
You could also use dashboards to align different teams with one goal. For example, there’s no point in increasing your website conversion rate if it eventually leads to a decrease in retention. You want a holistic increase across your entire business and a KPI dashboard can make it crystal clear how certain actions are affecting other teams in the company.
What Data Should You Include in a KPI Dashboard?
All right, you’re sold on why you need a KPI dashboard. The next step is to figure out what metrics you should show.
We all have heard about vanity and actionable metrics and Eric Ries has a great quote that explains the difference:
“The only metrics that entrepreneurs should invest energy in collecting are those that help them make decisions. Unfortunately, the majority of data available in off-the-shelf analytics packages are what I call Vanity Metrics. They might make you feel good, but they don’t offer clear guidance for what to do.” – Eric Ries
“My experience has shown that companies should start by tracking a single actionable metric that they can literally bet the company on. I call this their One Key Metric (OKM). Companies choosing their OKM realize they must pick an actionable metric because pageviews or sign ups aren’t harsh enough and don’t correlate highly enough with the success of their business.” – Source
Even if you end up with more than one metric, it is clear that you need to clearly think about which metrics will help you take action. The goal isn’t to track as many metrics as possible but to take some kind of action that improves your business or product.
This is the default dashboard in Google Analytics. For most companies, most of these metrics are useless. It won’t help them accomplish their goals, whatever those may be.
Finding the right metrics for your product or industry is actually quite straightforward. A little bit of research will show you the top 5 – 10 KPIs that similar companies to yours are tracking. For example, the articles below will give you a great starting point:
- Metrics for SaaS Companies: http://christophjanz.blogspot.com/2013/04/a-kpi-dashboard-for-early-stage-saas.html
- Metrics for Mobile Apps: https://blog.kissmetrics.com/must-have-mobile-metrics/
- Metrics for eCommerce Stores: https://www.shopify.ca/blog/7365564-32-key-performance-indicators-kpis-for-ecommerce
Instead of specific KPIs, I want to talk about how to design widgets or reports so everyone is able to understand them. To do this, we are going to use a formula called FDE which stands for Formula, Dates, and Exceptions.
If you ever had a team member tell you that they don’t understand what a specific report means or why the data seems “off”, FDE is here to help.
For every report, you should specify the following details in it’s description or title:
- Formula: what is the exact calculation being used for this KPI or report?
- Date: what is the date range and timezone for the data?
- Exceptions: are there any exceptions that people should be aware of e.g. it only includes users who created an account in the last 30 days.
Having a clear FDE for each KPI or report will help clear up and prevent confusion around the data.
More Design Principles for Effective Dashboards
Now that we know why we want a KPI dashboard and we know what metrics we want to show, we need to create it. This is the fun part of the process since we get to play around with different tools and create cool-looking graphs.
Before jumping into the tools, let’s look at a few principles for effective dashboards:
Principle 1: Make it Visual
Dashboards tools make it easy to create all kinds of charts so let’s take advantage of this and use them. For example, instead of just showing the new number of newsletter signups, let’s also show a line chart showing the overall trend over the past 30 days.
Principle 2: Compare Numbers Against Other Periods
Numbers by themselves don’t mean much. That only way to know if a number is good or bad is by comparing it against another number. The common way to do this is by comparing different data periods e.g. this week vs last week, this month vs the average of the last 6 months.
Principle 3: Keep It Simple
Simplicity is the solution here. Starting with 3-5 metrics will keep things simple but ensure that you’re not overwhelming your team with pages and pages of reports. Trying to keep reports to one page will force you to prioritize.
For your reference, here are a few different types of charts:
Line charts – great for showing trends.
Tables – overview of data like names, emails, phone numbers, etc.
Bar charts – great for comparing different types of sources e.g. traffic sources, mobile vs desktop.
Gauges – progress towards a specific goal.
Favorite Tools for Creating Dashboards
Finally, let’s look at the landscape for how you can create dashboards. There’s an ever-growing list of tools but I would recommend that you think about the following criteria:
- Ease of use: do you have the right resources to get this dashboard tool setup? Some of the most powerful tools are there are also incredibly complicated to deploy.
- Connections: does the dashboard tool support the majority of your existing data sources? Plug and play integrations are standard now and most dashboard tools will support a wide range of options.
- Flexible Reporting: can you report or show the data in different formats? This is new for my clients but we now look for dashboard tools that are able to share the data in multiple formats such as email, inside Slack, text messages, external APIs and more. I want to make it as easy as possible for everyone in my client’s team to access the data.
That being said, here are the companies that I think have fantastic products.
- Tablaeu: one of the original players in the dashboard space. They have tons of products and functionality though some things may feel outdated. Check out their data connectors and their entire product list.
- Domo: a more recent player in the space, Domo has made a name for themselves over the last few years. They have tons of support for popular data sources and have built way ways to transform data before you visualize it.
- Looker: this company was acquired by Google as they have been playing a crucial for organizations that have invested significantly in their data warehouses.
- Databox / Klipfolio: two options for smaller organizations. Both tools have tons of support for common data sources and are relatively easy to setup.
Focus on figuring out what metrics matter to your business and how these metrics will help you take more action.