If you’re a business owner, you likely encounter multiple data sources every day. This wealth of information can often be overwhelming. To facilitate an understanding of your data for both you, your team, and potentially shareholders, you should consider data visualization.
Data visualizations are graphic representations of data. They help clarify data by taking information from spreadsheets or data tables and transforming it into imagery that’s easier to understand and analyze. As visual creatures, we humans can discern trends, insights, and outliers from a series of colors, shapes, and patterns presented within a proper context. This is why business data mapping is particularly important for making informed decisions about driving your business. It allows you to separate important variables, make comparisons, and identify trends.
Read on to learn about the different types of data visualizations and how you can use them to visualize your business data.
Bar charts, both horizontal and vertical, are ideal for visualizing comparative data. They allow you to view several different metrics or categories of data side-by-side. For example, you could compare KPIs, channel performance, customer groups, and product insights. Presenting your data either horizontally or vertically will depend on your data set. Horizontal bar charts are best for nominal variables. It’s also an excellent way to show how data increases or decreases. Vertical bar charts are best for charting ordinal variables such as age ranges and percentages. In general, vertical bar charts should have categories that follow a natural sequence arranged from left to right.
Line charts are great at demonstrating how data progresses over time. For example, if you were to track a particular metric over a specific time span, you would use a line chart. Line charts have many advantages when it comes to presenting data. For starters, they are easy to create and simple to understand. They are capable of representing multiple metrics simultaneously, and they can highlight relevant insights and trends over a period of time. For these reasons, they are particularly helpful in forecasting and decision making. However, they are not ideal for situations where you need to display quantities, categorical data, part-to-whole comparisons, or very scant data sets.
Like line charts, area charts plot data progression over time. However, what differentiates them from line charts is that the space below the lines is filled in with color to illustrate the magnitude of changes. As a result, the data is more striking than if you were to simply display it with a line chart. This is especially evident if the metrics you’re measuring have experienced a major jump or drop over time, and you want to highlight this.
For part-to-whole data relationships, you need a pie chart. part-to-whole relationships are critical to understanding what percentage of your business a certain category represents. For example, new customer acquisition or ad spend from different marketing channels. This can be particularly useful if you want to know where to shift your focus. However, you must limit your pie chart to five sections or fewer. This will ensure it’s easy to read and understand. Furthermore, your pie chart always needs to add up to 100%.
Tables are ideal for when you need to quickly summarize, filter, group, sort, sum, or average a great deal of data. This may be the least visually impactful of the data visualization options, but it’s useful for organizing data into subsets that can then be used to build better-looking visuals. Furthermore, data tables are dynamic. They allow you to do things like sort your customers by relationship length, the total number of orders, or their customer status. You can also filter by various other data points such as first or last order date, VIP or loyalty status, average order value, and revenue.
Data visualization is an ideal way to analyze large amounts of data. By visually presenting information about your business, you can gain insight, discern patterns, and identify trends. This will guide you in the decisions you make to move your business forward. Additionally, formatting your data in this way can help your employees, shareholders, and other interested parties better understand the parts of your business. However, effective data visualization requires that you understand your data set to determine which type of data visualization is needed. Therefore, you must choose the right kind of data visualization so that the information gets imparted correctly.