A Sankey Waterfall Plot is a powerful visualization tool that helps illustrate how values flow and change between different stages. It combines elements of both Sankey diagrams and waterfall charts to provide a clear picture of how quantities shift over time or across categories. Businesses, analysts, and researchers use this type of chart to better understand financial statements, energy flows, website traffic, and more. In this guide, we’ll break down everything you need to know about Sankey Waterfall Plots, from their purpose and applications to how to create them using various tools.
What is a Sankey Waterfall Plot?
A Sankey Waterfall Plot is a specialized type of chart that combines the flow-based visualization of a Sankey diagram with the step-by-step change tracking of a waterfall chart. It is designed to show how an initial value transitions through different stages before reaching a final value.
In a Sankey Waterfall Plot, arrows represent the flow of values, while nodes (blocks or columns) show different stages or categories. This type of visualization is particularly helpful in breaking down financial performance, resource allocation, and process optimization.
For example, a company’s revenue might start at a high point and then decrease due to expenses, taxes, and other costs, eventually leading to the final profit value. The Sankey Waterfall Plot helps visualize these changes clearly.
Why is a Sankey Waterfall Plot Useful?
A Sankey Waterfall Plot is useful because it provides an intuitive way to track and understand how values shift between different categories. Unlike traditional bar charts or line graphs, this plot allows users to see the connections between different elements rather than just individual data points.
Here are some key reasons why Sankey Waterfall Plots are valuable:
- Clear Flow Representation – They show how values transition between stages.
- Better Decision-Making – Helps businesses and analysts identify where major changes occur.
- Easy Comparison – Users can quickly compare contributions to increases and decreases in values.
- Effective Storytelling – Provides an easy-to-follow narrative of changes over time or across different categories.
Who Uses Sankey Waterfall Plots?
Sankey Waterfall Plots are used by a wide range of professionals and industries, including:
- Financial Analysts – To visualize income, expenses, and profit breakdowns.
- Data Analysts – To analyze changes in datasets over time.
- Project Managers – To track cost overruns and budget changes.
- Marketing Teams – To examine website traffic flow and user behavior.
- Engineers and Scientists – To study energy consumption, resource allocation, and efficiency.
How to Read a Sankey Waterfall Plot
Understanding a Sankey Waterfall Plot is simple once you recognize its core components:
Colors and Arrows
Each arrow in the plot represents the flow of values from one stage to another. Colors often indicate different categories or types of changes (e.g., red for losses, green for gains).
Starting and Ending Points
The starting point represents the initial value (e.g., total revenue at the beginning of a period), while the ending point shows the final value after all increases and decreases have been accounted for.
How to Make a Sankey Waterfall Plot
Creating a Sankey Waterfall Plot requires gathering data, organizing it logically, and using visualization tools to generate the chart. Here’s a step-by-step guide:
- Collect Data – Identify the starting value, changes, and final value.
- Classify Data – Categorize changes as increases, decreases, or neutral adjustments.
- Choose a Tool – Use specialized software or online tools (discussed in the next section).
- Input Data – Enter values and define the flow structure.
- Customize Appearance – Adjust colors, labels, and layout for better readability.
- Analyze Results – Interpret the chart to gain insights.
Best Tools to Create a Sankey Waterfall Plot
Several tools allow users to create high-quality Sankey Waterfall Plots. Some of the best options include:
- Tableau – Offers built-in Sankey and Waterfall Chart functionalities.
- Microsoft Power BI – Provides custom visuals for Sankey Waterfall Plots.
- Google Data Studio – Useful for web traffic and marketing analysis.
- Excel (with Add-ins) – Requires external plugins or manual customization.
- Python (Matplotlib & Plotly) – Suitable for data scientists and advanced users.
- R (ggplot2 & networkD3) – Ideal for statistical and data visualization purposes.
Each tool has its strengths, depending on your specific needs and level of expertise.
Sankey Waterfall Plot vs. Other Charts
Sankey Waterfall Plots are often compared to other visualization methods. Here’s how they differ from similar chart types:
Sankey Waterfall Plot vs. Regular Waterfall Chart
A Waterfall Chart shows increases and decreases step by step but lacks flow connections between categories. A Sankey Waterfall Plot, on the other hand, adds directional arrows to illustrate how values move.
Sankey Waterfall Plot vs. Sankey Diagram
A Sankey Diagram is primarily used to show how resources, energy, or data flow between multiple categories, while a Sankey Waterfall Plot focuses on how a single value changes over time or across stages.
Common Mistakes When Using Sankey Waterfall Plots
While Sankey Waterfall Plots are powerful, they can be misleading if not used correctly. Here are some common mistakes to avoid:
- Overcomplicating the Chart – Too many categories can make the visualization confusing.
- Ignoring Scale – Inconsistent scaling can distort data interpretation.
- Poor Color Choices – Using similar colors for different types of changes can make the chart unclear.
- Not Labeling Data Properly – Lack of clear labels can make it difficult to understand the flow.
Thoughts on Sankey Waterfall Plots
Sankey Waterfall Plots offer a unique way to understand how values change over time or between categories. Whether you’re analyzing financial performance, business operations, or energy consumption, these plots make it easier to identify trends, patterns, and key contributors to change. By choosing the right tool and ensuring a clear, well-organized presentation, you can maximize the benefits of using a Sankey Waterfall Plot.
The Bottom Line
The Sankey Waterfall Plot is an essential visualization tool for anyone dealing with complex data flows and incremental changes. It combines the step-by-step breakdown of a waterfall chart with the flow-based representation of a Sankey diagram, making it perfect for tracking changes in finance, business, and science.
By following best practices and avoiding common mistakes, you can create clear, insightful charts that help drive better decisions. Whether you’re an analyst, business owner, or data enthusiast, mastering Sankey Waterfall Plots will give you an edge in understanding and presenting data effectively.
