Financial and nonfinancial data provide new insights for associations
There’s a new buzzword in association business: data. From events to marketing and member communications, data plays a vital role in understanding and more meaningfully connecting with audiences. As opportunities for data collection increase with the advent (and staying power) of virtual events, association leaders are learning more from richer layers of association data that has implications far beyond marketing and communications.
Identifying the Data
To reach the proverbial promised land of data, associations must gather and understand two sets of data: financial and nonfinancial.
Financial data includes financial statements and historical transactional information while nonfinancial data includes member demographic, preference, and registration information. This may encompass survey results, app installations, and more.
“The main benefit of using both financial and nonfinancial data is that a more complete picture of the entity can be achieved,” said Justin Martin, CPA, Association Headquarters’ Director of Client Financial Services. “While either data set can provide good information about the organization, the combination and resulting correlation can provide more insight into specific areas.”
Taming the Data Beast
Martin points out that organizations do not need a data scientist on staff to discover and use data effectively. Associations can focus on what they know about their organization or focus efforts on the staple of the association industry: membership and meeting registration.
“Simple data points such as the number of members, member renewal rate, meeting registrants, repeat meeting attendees, and non-member attendees can provide valuable insight into the organization,” Martin said. “These can provide a solid foundation for future data collection efforts with more specific criteria.”
Collecting as much data as possible is advantageous, but having all that information will do nothing if there is no plan for what it will be used to determine.
“All the data can still be collected and potentially used later, but the data reported should be relevant and have the potential to be acted upon,” Martin said. “Yes, the data can tell you that women who are over 40 in Tennessee registered for XYZ course more than they registered for ABC course, but what are you trying to determine with the data?”
After collecting all the data, people can fall victim to “analysis paralysis,” when users are so overwhelmed by the volume of information available that they struggle to move past analyzing information into productive interpretation of the data.
“Looking at the data from every angle rarely produces significantly more benefit than the original analysis,” Martin said. “The onslaught of different data points only serves to muddy the waters and prevent reaching a conclusion.”
Leaders should go into an analysis with specific goals outlined—for example, to determine the return on investment of an initiative or whether a particular offering was effective—and an idea of what metrics constitute success. This may include a minimum number of registrations for an event or a minimum number of purchases of a product, service, or course. Without these goals and key performance indicators, the data won’t be as effective.
“Data is a tool, a means to an end, that requires some level of planning to extract the correct information to address the questions at hand,” Martin said.
Effective Data Reporting
After the data is collected, the next feat is turning that sea of data into something meaningful. One of the most beneficial ways to share a set of a data is via a dashboard—a visual and narrative format that allows presenters to weave together high-level charts, graphs, and descriptions or analyses of the information to share conclusions and recommendations.
What data should be included in a dashboard? A short answer to a complex question: only what the users need.
Keep in mind, while there are certain data points that are important to all associations, a dashboard does not necessarily need to include all of that data. Rather, dashboards should include just what is needed at the time of that specific report. In addition, dashboards will be unique for every organization and every effort for which a dashboard is being created; there is no one-size-fits-all approach to building a dashboard.
“Once that dashboard has been created, it should be evaluated on a routine basis and as the organization changes so should the dashboard to reflect new initiatives and priorities,” Martin said. “A good dashboard is fluid with relevant data that is unique to the organization.”
The art of effective dashboard reporting is balancing what’s interesting with what’s useful, and presenting it in a way that users who are not data-inclined can make sense of it and understand the story being presented.
“The dashboard should incorporate both financial and nonfinancial data and be easy to read by all stakeholders,” Martin said. “The dashboard is meant to give a picture of the organization at a glance, so it would normally fit on a single sheet of paper.”
Using visuals for both financial and nonfinancial data allows more people to understand potentially complicated data, especially when it comes to financial data.
“The dashboard is an equalizer; the visual depiction helps to eliminate confusion that may be caused by the presentation of purely financial data by presenting information in a manner that all can understand,” Martin said.
The art of data visualization challenged the traditional notion of pie charts and bar graphs as the only way to present data visually. Now, infographics showcase sometimes complex data in interesting and easier-to-understand designs. Martin encourages leaders to explore options for presenting data in ways that are both appealing and accessible.
“By presenting information in more accessible formats, it may generate more buy-in from boards as they gain a greater understanding of the organization,” Martin said. “Board members may have previously lacked an understanding of financial statements and therefore didn’t raise discussion points or questions.”
Engage Leaders with Data
The exciting data points that help paint the fuller picture of an organization don’t stop at member demographics information. Financial data adds a richer layer of understanding that can aid in decision making and setting goals. Including more in-depth data—and the interpretation of that data for leaders and decision makers—in dashboards helps association leaders propel their organizations forward.
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