The key to persuasion is empathy, and it is especially necessary when using data to persuade. Visualizing data persuasively is a skill that can be honed with experience and diligence. This article was inspired by (and borrows heavily from) Good Charts by Scott Berinato of the Harvard Business Review Press.
It’s easy to forget, but much of the writing and presenting we do is intended to persuade, not just inform. Words can obviously be persuasive, but a good visual illustration can go a long way toward reinforcing the strength of an argument.
So what exactly makes a diagram or chart “good” or “bad?”
The answer to this question is amorphous and relies on insight into the audience’s disposition and views. Scott Berinato, senior editor at the Harvard Business Review Press, begins his approach by asking “What’s the context?”, as the context defines the level of a chart’s effectiveness.
Key considerations such as who will be viewing the charts, what does the reader expect, why is the reader taking the time to review my chart, and lastly how will I show the reader what I think, are all optimally answered when reviewed through a contextual or empathetic lens. However, empathetic persuasion is a skill, and one that is developed through experience.
This is especially true in the investment industry, where new acronyms, complex legislation, and evolving financial theory complicate discussions between business owners and investors, sometimes leading to a lower valuation of the business. The below list of key takeaways is a summary of our experience in financial services and Berinato’s book on data visualization:
- People do not take in visual input in a linear way
Unlike with text, where readers normally skim from left to right, charts have no inherent order. The reader is likely to look first at a big spike in the center of your line chart rather than review the title and axis for clarity on the topic.
- People notice what sticks out
Our brains are wired to ignore what’s expected and pay attention to what is not expected. Highlighting the message of a chart with bright colors, enlarging the font of important text, or centrally placing an integral picture, line, or word can guide users’ eyes to your most salient point.
Consider the chart ABC Historical Profit to the right. It’s almost certain that the first thing you noticed was the bright red, tall bar on the far right. If the goal of this chart was to communicate ABC’s overwhelming profitability in 2016, this chart would have served its purpose. If not, highlighting 2016 might be a mistake.
- People do not see everything at once
Just as with persuasive essays, diagrams can be dense and may require multiple reviews to fully absorb the information. The nearby diagram Customer Experience with Business Interface Software depicts mean customer experience as a percentage score for multiple uses, each use having a maximum score of 100%, allowing summed scores greater than 100%.
A glance at the bar chart would indicate that Tableau and QlikTech received the highest customer satisfaction means. But comparing each software’s customer satisfaction by specific use is complicated given the 8 different services, 19 different vendors, and multiple colored bars with different start and end points. Charts filled with many colors and labels, while informative, can be difficult to decipher, and the message may be lost behind the visual appeal. Remember that artistic expression’s influence on persuasion, while material, is limited and can even be counterproductive if used clumsily.
- People strive to make connections
Even after the briefest of glances, readers seek connections and trends in visual data. These connections form the basis of the narrative the reader will rely on to understand and retain the information. It would be almost impossible to organize and record each individually recorded income and net worth in US Incomes vs. Net Worths, 2013 SCF Data, but the relation is clear: annual incomes of 100K are a worse indicator of net worth than higher incomes in the 1 to 10 million dollar range.
- Orientation matters
Even as infants, we are taught to see the world in a certain way, and this predisposition applies to charts and graphs. Consider the picture of the world map below. Although there is no one correct way to view a map, reorienting it makes us momentarily reconsider what we learned in grade school before recognizing that the map is simply upside down; we have been taught that North America should be on top of South America with Australia always remaining “down under.”
Similarly, in cartography, as in other disciplines, how maps present size has consequences: The “normal” Mercator projection we grew up with exaggerates the relative size (and implicit importance) of both Europe and North America while deemphasizing Africa, Australia, and South America. This “upside down” Hobbs-Dyer equal-area projection gives a more balanced, non-Eurocentric view of relative size, but it is disorienting to most of us in the northern hemisphere. It might be a persuasive illustration if you wanted to persuade readers to consider investing below the equator.
The same “orientation predisposition” applies to charts as seen in the Weekly Average Share Price line chart. Initially, most viewers would assume that the price is steadily increasing. But after a head tilt or two, the reader would recognize that the share price is actually decreasing! Counterintuitively, the x-axis has decreasing values from left to right – and normally, time is on the x-axis, not value. To quote Berinato, “We mentally store all kinds of metaphors and conventions about what information means: up is good, down is bad. North is up and South is down.”
Data visualization in the investment banking world
Presenting data clearly and persuasively can be daunting. So can interpreting data that is not presented optimally. We at Hilliard Lyons Investment Banking see this quite a bit – both when clients are trying to put their best foot forward in presenting data about their company, and when prospective buyers are trying to persuade clients that their offer is the best one. The stakes are often high, and the ability to both present data and interpret other parties’ data accurately is at a premium.
We welcome the opportunity to guide you through the gauntlet of a business sale. We will use our understanding of and experience in the investment community – including the persuasive use of visualized data – to help you accomplish your goals.