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What everyone should know about “percentages”
2 February 2010, by , in Data Management, 2 comments

I admit I’m a data freak. I loves me some good stats. But one has to be very careful when interpreting data, especially something like “percentage increase.”

For example, in this article, the sub-head states: “Millennials show the highest increase in participation [of loyalty programs]”

The article goes on to say “… participation jumped 19 percent year-over-year, with the most significant increase exhibited by Millennials (people between 18 and 25 years of age), among whom the level of participation spiked by nearly 32 percent.”

But when the whole number is so small (or conversely, so large) to start with, this may be meaningless data. As you can see in the article, “Affluents” participate at a nearly 80% level in 2007. So even if 100%!!! of affluents participated, that would only be a 20% increase.

On the flipside, Gen Y is participating at less than 50% in 2007, so if they were to go to 100% participation, that would be a 100% increase.

When the bases are different, the percent increase can be misleading. So be very careful when you hear things like “our membership increased 25%” or “our event registration increased by 10%.” Without knowing the base number, the percentage increase or decrease may be meaningless.

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2 Comments on "What everyone should know about “percentages”"

Scott Oser - 8 February 2010 Reply

Wes, This is a great post. I hope that BOD members and EDs read your blog so they realize the importance of understanding the numbers behind a percentage. Many Board books and regular reports include a large number of stats which at face value look very impressive. It is only when we look behind the percentages do we really find out what is happening. All leaders need to understand that so thanks for pointing it out. Scott

Wes Trochlil - 9 February 2010 Reply

Scott, you're right, this IS a great post! ;-) Good point about board books. We have to be careful about how represent (or misrepresent) our data.

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Mary Pat Paris, Executive Director
International Registration Plan

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International Registration Plan

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