The purpose of a heat map is to measure the density of data in a particular area. To differentiate different levels of density, heat maps employ various colors. In general, red and orange are utilized for higher densities and blue for lower densities.
Although other maps can measure data density, heat maps are a tidier way of doing so. For instance, a pin map displays density by identifying each datapoint with a marker. However, these maps can become messy and difficult to analyze. By contrast, a heat map makes it easy to identify areas where particular information is more prevalent in representing density with colors. For example, if you wanted to see where your sales are coming from, you would start by plotting all your sales locations. Then, by applying a heat map to this data, you would be able to quickly identify where sales are highest and where they are lowest. You can then use this information to make important changes to your sales strategy.
Types of Heat Maps
There are three primary types of heat maps. These are:
Traditional
This type of heat map represents data points as color-coded circles with a specific radius of influence. In general, the densest areas of these circles will be colored red and then fade to blue or green as the data becomes dispersed. However, most heat maps will allow you to choose colors to suit your preferences.
Area-Based
If you want to compare data between one or more different geographic areas, you will use an area-based heat map. Geographic areas can be defined by either zip codes, counties, or states. These areas are then colored based on the amount of data located there. For example, if a large number of customers aged 30-50 live in the state of Illinois, it would be colored red. However, if only a few customers aged 30-50 live in the state of Georgia, Georgia would be colored blue. Consequently, you’ll get a quick overview of where these types of customers are located in the US.
Point-Based
Often compared to dot-density maps, point-based heat maps use points to represent data. The larger the cluster of points, the higher density of data. The more sparse the cluster, the lower the density of data.
How Can You Use Heat Maps for Business
There are a variety of ways that heat maps can be useful for your business. For instance, as previously mentioned, heat mapping is a valuable asset for planning your sales strategy. This is because heat maps demonstrate the strength of data’s presence in some areas and its absence in others. As a result, a business can gain valuable insights.
A heat mapping tool measures a business’s performance based on several key metrics. These include:
- Revenue
- Customers
- Sales
- Service calls
- Deliveries
Taking revenue as an example, heat maps tell a company what areas bring in the most money. Businesses can decide what areas require more attention and what areas are already well served using this information. This can be particularly useful when designing a targeted marketing campaign. For example, for areas that bring in a great deal of revenue, the company might create ads that encourage repeat purchases. However, they might need ads that encourage new customers to trust their product or service for areas where revenue is low.
Another way to use heat maps is to employ them to manage salesperson distribution or delivery driver management. For example, by plotting your sales reps or delivery drivers and locations, you can see which territories have plenty of personnel and which are lacking. As a result, you can fill gaps and move people around to serve your customers better.
Lastly, heat mapping is a great tool for research. Heat maps can measure a vast array of demographic data, including:
- Income
- Housing
- Gender
- Population
- Race
- Age
Using this data, you can determine where your target audience is located, allowing you to plan strategic marketing campaigns and choose sites for new business locations.
Businesses that Heat Maps are Particularly Well Suited For
While virtually every business can benefit from using a heat map to analyze its data, there are a few types of companies that heat maps are particularly well suited for. These are:
- Sales
- Healthcare/Medical professions
- Finance
- Franchises
- Real Estate
- Delivery businesses
- Governments
- Service businesses
Main Advantages of Using Heat Maps
Heat maps are beneficial to businesses for many reasons, but let’s look at the advantages they provide in a little more depth.
Heat Maps Measure Performance
To improve your company, it’s essential that you know which parts of your business are performing well and which are not. Using a heat map, you can determine where you’re hitting your targets and where you’re falling behind. With this information, you can compare business locations and territories to determine where you perform best and which areas need work.
Heat Maps Help You Understand the Market
Developing a successful marketing strategy requires that you have a good understanding of the people you’re targeting. Therefore, a heat map is an excellent way to learn more about where your target audience is located based on demographic information. You will also learn more about who your customers are and how you can sell to them. Furthermore, a heat map can show you potential new areas for expansion.
Heat Maps Help Uncover Hidden Patterns
Business data contains a lot of valuable information, but some of it might go unseen if not portrayed in the right manner. For instance, it can be hard to decipher patterns in geographic buying habits by looking at numbers in a spreadsheet. By contrast, if you were to visualize your data using a heat map, you can compare the buying habits of one area versus other areas.