5 Best Reasons to Use Line Charts For Your Business
According to the adage, a picture is worth a thousand words. Pictures have the ability to captivate attention, swiftly transmit information, and simplify complicated concepts. According to a study, Images can be useful in business along with using line charts. For example, a recent Buzzumo analysis of over 100 million Facebook posts discovered that those containing graphics had 2.3 times more interaction than those without. Nonetheless, the power of images extends beyond social media. Another TechSmith study discovered that when knowledge is delivered graphically, nearly two-thirds of individuals grasp it better.
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Charts are commonly used in professional settings and may help viewers rapidly absorb the information being delivered – a key benefit given the abundance of information everyone must digest every day, especially in today’s hyper-connected world.
What Is a Line Chart?
A line chart is used to display data over a continuous time period. It is commonly used to demonstrate the trend of a measure (or variable) across time. Data values are represented as points linked by line segments.
A line chart can show the trend of any dependent variable over time, such as a company’s share price, EPS (Earnings Per Share), weather data (such as temperature, precipitation, or humidity), and so on.
Why Do You Need Line Charts?
1. To see the evolution of a dependent variable through time via line charts
Line charts are useful for displaying continuous data sets across time. Understanding changes that occur throughout time is rather simple for the human mind. Business owners want to see their revenues grow over time, content producers want to see their traffic increase over time, and government agencies want to see tax, health, and infrastructure data grow over time. It provides us with the best backdrop for understanding what is going on and planning for the future.
2. Recognize patterns and identify spikes and troughs
Line charts aid in identifying major performance concerns and spotting patterns (either good or bad). Line charts allow you to pinpoint the precise moment when anything out of the norm occurred, which aids in determining where to go for solutions.
3. To compare various areas’ patterns
Multi-series line charts are used to compare how multiple groups (regardless of how they are classified – geography, internal teams, age groups, financial quarters, etc.) perform against one another. This aids in identifying critical performance areas and quarantining circumstances that are causing problems.
4. Highlight department expenses.
Use a multi-line chart to demonstrate how much each department spent in the previous fiscal year. This will allow you to compare spending variations and discover any outliers, such as departments spending much more than others.
5. Keep track of stock movement.
For publicly listed organizations, utilizing a line chart to measure the value of their stock performance over a day, month, or year may assist guide strategy and direction.
Compare product revenue in the past. To compare financial performance for a set of items, use a multi-line chart. Plot revenue for each product across the previous business cycle to identify trends and patterns that may be applied to several series.
Determine the levels of consumer satisfaction. Track client satisfaction over the last year. Use the chart to assess if the customer success team needs intervention or a reward.
The Best Ways to Use Line Charts
When using a line chart to visualize your metrics, there are a few things to keep in mind.
1. Consider including gridlines
Gridlines aren’t usually necessary on charts, but they can assist readers to grasp the values for each data point in a large and intricate chart comparing numerous data series.
2. Emphasize fluctuations in value
Most comparison charts operate best with a baseline of zero. However, line charts are best used to indicate value changes. Consider a beginning number that is more than or less than zero in order to emphasize substantial improvements. Make sure that readers understand what the initial value is.
3. Maintain a straightforward approach.
While line charts are useful for displaying a large amount of data, don’t put so many lines on one chart that they become illegible. Colors can be used to distinguish between lines, and the maximum number of lines is 5-7. Readers will still acquire value and insight from each individual line at those numbers.
4. Don’t select data at random but use line charts.
This is another non-negotiable recommendation. If you simply use data that supports what you want to think or declare, you are not only deceiving others, but you are also denying them the opportunity to discover what all of the actual data has to say.
When transmitting data, it is your job, to be honest. This is the most effective strategy to transform these conversations into “wins” for your business.
5. Clear up any needless clutter
You can make it much simpler for people to understand the important trends or takeaways from your line chart by making it as simple as possible, yet retaining all of the intricacies of the data. This is especially critical if you have a lot of data points or lines to provide.
For example, use horizontal grid lines, if they help people read the numbers easier, but make them light gray so they blend into the backdrop.
6. Make your chart title informative to readers
According to studies, people will spend a lot of time reading the text in your chart, so make that content useful to the reader.
Instead of a factual title like “Average Age of Customers” or “Revenue per Quarter,” use a descriptive title that helps the reader better grasp the facts in the chart, such as “Product Attracts Younger Customers” or “Revenue Declined Last Quarter.”
You can also write notes/remarks regarding items other than the title and label, such as:
- Each data point on the line has exact values.
- Significant values in the chart, such as the highest and lowest, are highlighted.
- Significant changes occurred at specific points in time.
Conclusion
Line charts are an excellent tool for highlighting significant trends and changes over time. Use a line chart to highlight the changes in an easy-to-understand manner.
David is a dynamic, analytical, solutions-focused bilingual Financial Professional, highly regarded for devising and implementing actionable plans resulting in measurable improvements to customer acquisition and retention, revenue generation, forecasting, and new business development.
