What is a Funnel Chart?
A funnel chart is used to visualize data that is progressively reducing or a linear process that has inter-linked stages. When the data is sorted using this tool, it takes the shape of a funnel. Each stage of the chart is a percentage of its previous stage. Funnel charts can be a great choice when the data is interlinked or sequential. A funnel chart is typically used when the data in the first stage is larger than the rest and is visibly reducing until the last stage.
When to Use a Funnel Chart
A funnel chart works effectively for evaluating sales conversion rates or for assessing the progress of a click-through advertising or marketing campaign.
In the example above, the funnel chart depicts the sales conversion rates for a company. This is a typical use case for the funnel chart. We notice that the stages of the funnel are in a logical order (Visitors to Leads to MQLs) and it makes sense because the funnel is shrinking as it gets to the bottom. The goal of the funnel chart is to be able to visually depict the amount of values at each stage in comparison to the previous stage.
When NOT to Use a Funnel Chart
When using a funnel chart, the one thing to keep in mind is that the data must be in a sequential, logical order. In the previous example, visitors turn into leads which turn into MQLs and so on. This is the typical process through the marketing funnel and is a correct application of the funnel chart. Now, let’s take a look at the example below.
This funnel chart is depicting the subscription plans by type of a company. We do notice that the chart has the funnel shape, but notice what data is actually being used in this example. It appears that the company has Business, Starter, and Enterprise subscription types. The problem with this funnel chart is that each subscription type is not interlinked and do not follow a path, like in the example above. It does not make sense to compare these values in the funnel. The values in the funnel chart must follow a logical sequential order, where values in the lower sections of the funnel are directly related to the values above them.
Comparison of Like Chart Types
A funnel chart is used to visualize data that is progressively reducing or a linear process that has inter-linked stages. While this type of chart is unique, an alternative to the funnel chart is to create a column chart with gradually declining columns from left to right. While this can simply be seen as moving the funnel chart on its side, it may be easier to identify the value of each section with columns instead of a funnel.