The Marketing Graph You Need to Hit Your Goals

Last November, my husband and I were on our honeymoon in Maui. One of the main activities we wanted to do was hike near the falls. We dreamed of swimming in the rushing water at sunrise.

Usually when you hear the word “waterfall” you are imagining it. However, today we’re going to talk about another type of waterfall – the waterfall chart.

Waterfall charts are a data visualization resource that you can use to collect and track important data like traffic goals and lead generation. Here’s what a waterfall chart is, how to read it, and how to make one.

In marketing, a waterfall chart could show the number of leads, traffic sources, or blog views over a period of time. More specifically, you can use a waterfall chart to show how your blog traffic has increased or decreased over the last year and show the values ​​month by month.

You can potentially use line charts, bar charts, and even bullets to show this type of data. However, waterfall charts have the advantage of showing your profits as they are affected by losses over time.

Why use a waterfall chart?

You should use a waterfall chart instead of other types of charts when trying to visualize data that is making both gains and losses. This is especially useful when you want to see how a loss affects a subsequent value.

One of the reasons waterfall charts are effective in marketing is because they provide context to the data they are reporting. Most data visualizations suffer from ignoring circumstances that cause the numbers to decrease or increase, such as: B. Seasonality.

For example, let’s say you create a waterfall chart of your Twitter followers over time. Instead of using a line chart that shows your total number of users over time, a waterfall chart shows how many you’ve lost – and how that affects the numbers below.

At first glance, these charts can be difficult to read. Let’s look at how to read a waterfall chart.

How to read a waterfall chart

Reading a waterfall chart will seem alien to you at first if you’ve never done it before.

Remember, however, that you will read it from left to right in order.

For example, let’s say you are tracking blog traffic month by month. On the far left you can see the total traffic of the previous year. It then takes into account the gains and losses from month to month for the entire year. At the end of the graph you can see the total traffic for the year.

This is what it looks like:

Notice how each value either ends where the previous value ended or started. There was an increase of 5,000 visitors in January, but a loss of 2,000 in February and March. The market value in April takes this into account by starting from -2,000 and increasing from there.

Essentially, you want a waterfall chart to show you where you started and where you ended up with details on how you got there. In this example, you can see the months in which the most traffic was gained compared to the months in which it was lost. This could help you spot seasonal adjustments while keeping an eye on the bigger picture.

Now you may be wondering, “This chart looks difficult to make. How can I make my own in Excel?” Below, let’s look at the simple process of creating your own waterfall chart.

Not sure how to actually do it? Below we add a template and further instructions.

Bonus: You can also find instructions on how to create waterfall charts in Google Sheets, in case this is your spreadsheet software of choice.

Waterfall excel template

1. Create a table with four columns.

Before you can create a waterfall chart, you need to create a table of values ​​to represent on your chart.

For example, do you track blog traffic numbers? Or are you looking for leads generated from a specific marketing campaign? Either way, you need to collect your data before you can create a waterfall chart.

All you have to do is open up Excel or Google Sheets and enter your information manually. When entering your information, be sure to indicate the difference between positive and negative values. To indicate a negative value, just add a minus sign in front of the number.

For this template, we’re tracking blog traffic. Note: All numbers are arbitrary and do not reflect traffic to a blog.

Create four columns. The first two columns have no headings. In cells A2 through A15, write START, then every 12 months, then END.

Write “GAIN” in cell C1 and “LOSS” in cell D1.

From there you place your traffic numbers. How much traffic do you start with? Write that in cell B2 next to START. Then, for each month, write down how much you have gained or lost.

Put everything together, including negative values, and place them in cell B15 next to END.

2. Highlight all of your data and then paste in your waterfall chart.

Now that you have your values, mark the table you just created. Go to Google Sheets Insert → diagram → Waterfall chart.

This will create a waterfall chart and the chart editor will appear on the right. When calling up the diagram editor, make sure that “Waterfall diagram” is selected under Diagram type.

In Excel, go to Insert → [Waterfall chart symbol] → Waterfall.

Your diagram will be created automatically based on the values ​​in our template.

3. Format your waterfall chart.

At this point all the hard work is done. All you have to do is format your diagram and make sure it looks the way you want it.

In Google Sheets, click the three dots in the top right corner of the chart and click Edit Chart. You get to the diagram editor. Here you can choose the colors of your bars, customize your legend, or add grid lines. Most likely, this is where you primarily want to customize your legend.

In Excel, click on the chart and then choose Chart Design and Format from the top ribbon to make the chart look the way you want it.

Creating a waterfall chart manually can be tedious. Fortunately, you can also create a waterfall chart using a dedicated dashboard tool. For example, HubSpot offers a marketing dashboard and reporting software that you can use to create charts. Here is how.

How to make a chart in HubSpot

1. Go to Analysis Tools.

After logging into your portal, hover over the Reports tab and click on the Analysis Tools.

2. Choose what you want to track.

Next, choose what you want to track. You might want to analyze blog traffic like we did in the example above. Or maybe you want to review analytics for a specific campaign.

Either way, you can choose what to track in the analytics tools.

3. Select the chart type.

Finally, all you have to do is select the style chart you want. Currently you can choose between an area chart, column chart, line chart or a combination chart. You should select “Column” that most closely approximates the waterfall chart format.

Waterfall analysis

Now that you have a waterfall chart, it’s time to analyze it.

To reiterate, this is how you understand your waterfall chart:

• A waterfall chart shows a series of negative and positive values. Every value affects the value afterwards.
• For example, if you lose 3 leads in one week, this will be reflected in the next value. If you win 5 leads, the waterfall chart will use a value of -3 as a starting point, so your end point will be 2 leads win.
• Each column is color-coded to distinguish positive from negative values.

And here is how to analyze it.

Investigate the time ranges with the greatest losses.

In which months or weeks did you experience the greatest losses? It’s important to see and understand these numbers in order to get the most out of your chart. From there, you can fix bugs or develop a new strategy for these months.

Examine the time ranges with the greatest gains.

Conversely, look at the time ranges in which the greatest profits were made. You’ll want to mimic what you’ve done these months – or explore trends that gave you a boost during these times.

Examine the net change over the entire time range.

How big was the difference from start to finish? Was it a positive or negative difference? Could Your Business Have Got Better Results?

See the week-to-week gains and losses after implementing a new strategy.

After you’ve created a new strategy, it’s helpful to use a waterfall chart to see how it affects you from week to week – whether you see more positive or negative results.

Use a waterfall chart to better analyze your performance

To ensure that you are exploring the full scope of your analysis, we recommend that you create a waterfall chart. It’s a great data visualization tool that can help you understand your analyzes sequentially. You no longer have to rely on typical line graphs – a waterfall chart allows you to understand your profits and losses over time at a much more detailed level.

Editor’s note: This post was originally published in May 2011 and has been updated for topicality, accuracy and completeness.