5 ways % comparison lies and deceives you.
After working in the world of consultancy, I realized that when I switched over to business enterprises, clients are often misled by percentages. Statistical misrepresentation is your next door neighbor liar. It appears every so often, and people who use them are pretty sneaky conmen. Every time a big number pops up, your mouth involuntarily makes ‘ooh’ and ‘aah’ sounds, rendering you vulnerable to ‘alternative truths’.
I can still remember on one afternoon, my ex-colleague presented ‘engagement survey’ results to our clients, citing that employee engagement of the client is 10% below that of the industry average. However, what the heck does 10% even mean? Does it mean that one employee feels 10% not as engaged in their work as the rest of the industry? How does one person even feel 10%?!
Here are 7 ways, simply put, percentages have been deceiving you.
Trick #1: It makes your math brain dead.
Human deals stupidly with large numbers. We cannot conceptualize objects beyond our daily vocabulary (unless you are, of course, a mathematician). Sure, we can imagine ourselves rich as heck with numbers like 1,000,000,000 dollars, but we often find it increasingly difficult to count every single 100 dollar bills or do complicated math.
And so, using this fault in our perceptions, conmen trick you into thinking you’re getting more for less.
Do you remember the sales scheme your favorite store uses? Yeah, those 10% and then 30% off deals! When consumers are met with these seemingly cheap price tag, they are rendered dumb. Surprisingly, researchers at University of Miami, Rao and Haipeng Chen, found that majority of consumers treat percentages like numbers.
“…when consumers have to deal with more than one percentage at a time, they make errors that can be costly. For instance, if a store offers a 25 percent off sale with an additional 25 percent off for a certain product, people assume they are getting a 50 percent reduction. In reality, they are getting about a 43 percent discount.”
Your truly cheap discount may not be so cheap after all.
Trick #2: It blinds you from the real baseline.
I cannot lie that I have used this trickery before. Clients are astonished by really big percentages. Big numbers means it’s great right?! No.
Let’s take 447% as an example.
Have you noticed how this is something that has nothing to do with your sales team at all? Sure, if you use their software you may be better off than not having one, but does 447% still stand? Absolutely not, it’s a number that masks the baseline of percentages.
What is that 447% out of?
1 sales? If it is one sales, it just meant that using a software allowed you to sell 4.47 more donuts. Holy crap, now that is not as amazing as we previously imagined, let alone making our sales team happier.
Percentages also does not take into account the scale of growth. 447% may sound amazing for someone who runs a company of 10,000 sales per day, but is that truly likely? It’s quite absurd to imagine just one tool that can send sales to 4.47 million units of sales.
To really bring the point home, let’s imagine a bullet point a resume. Someone may claim that they have increased sales by 200% (or double the original amount). Since we do not know what the amount is out of, we may be impressed at first. However, if we found out that 200% growth means you only sold an extra donut from the beginning amount of one, it means shit.
Trick #3: It destroys variables in question.
Percentages destroy data integrity. It stops us from questioning whether the data collected is meaningful to what we’re measuring. Take being honest for an example.
Recall the independent fact-checking website of the 2016 presidential race that score how ‘truthful’ a candidate is within their speeches. According to their ‘analysis’, Donald Trump is only 4% truthful.
What does it really mean? Does that mean for every 100 words Trump said he only said 4 truthful words? Which statements are we talking about? Nathan J. Robinson, author of ‘Why Politifact’s “True/False” percentages are meaningless’, hits a home run on this methodology.
That distinction makes an important difference. PolitiFact does not take a random sample of the sentences in Trump’s speeches. If it did, it would include things like “My father was in real estate” and “I’ve run a business for many years.” (Plus things like “You’re a beautiful crowd!”) Instead, it picks out certain statements that it thinks ought to be evaluated.
But, by their nature, these are going to be the most contentious and controversial statements in the speech.
Trick #4: It encourages misinformation.
Percentage requires context in order to make sense and we are often led to ‘assume’ the wrong context. Dr. Bruce D. Watson stated in his linkedin blog that criticizes an article by BBC New site that we are often misled by context.
We often see articles comparing company’s costs of doing something against its rivals. However, what we are missing is the scale in which we are arguing about. Take GDP growth of the United States and China for example. We often find debates on China’s GDP growth in the recent years as it has been on a downward trend. However, some advocates do say that China is better off due to its constantly large percentage when compared to other countries such as the United States as per the graph below.
From this graph, it may be evident that China is doing way better than the United States in general. China has been out performing in terms of GDP percentage growth. However, if we carefully examine the quantum amount instead of the percentage amount we will find that the United States, even though its percentage is way lower, looks way better off.
In 2014 and 2015, China’s GDP was 11,007.72 billion dollars and 10,482.37 billion dollars. While in 2014 and 2015, the United State’s GDP was billion 17,393.10 dollars and 18,036.65 billion dollars. Are your brains dead with the big numbers yet? Good, I just used trick #1 on you.
This clearly shows that the United States is better off, not only in terms of percentages, but in terms of growth and size of the economy as well. Don’t let yourself be misled by large percentages as graphs, try to find the real numbers and see for yourself what is going on.
I am not saying that China is doing absolutely horribly in terms of its economy, there are much larger things going on in China that, we in the western media, may not see.
Trick #5: It makes no sense.
Sometimes these tricks do not even need to be smart in order to deceive the average Joe. One can say that a percentage alone makes no sense, but take on warnings, several percentages together also make no sense. As I have said in the beginning about employees being engaged, what does the percentage truly means?
According to Aon Hewitt, a human capital consulting firm, 65% of employees globally are engaged. It’s 3 points more than last year! Wow, this is splendid. Wait, hold your horses. What does it truly mean?
Does it mean 6 out of 10 employees are engaged with their job? Does it mean employees feel 65% engaged most of the time? Does this number fluctuate over menstruation cycle of an average female employees?
The answer is: we truly don’t know. Sometimes these percentages are not insightful at all. Are we supposed to be worried that only over a half of employees are engaged? Are all employees supposed to be engaged?
Again, we truly do not know and at the same time it makes no sense. These percentages are turning emotions and feelings into math. We all know that emotions are not in anyway logical. We cannot control emotional percentages. So, don’t let these numbers fool you.
Take for instant, you’re 65% good at sex. Hell, that doesn’t even make sense. Fortunately, the consulting company took data on what makes employee ‘not engaged’ in their work.
Now that you know how percentage comparison can be deceptive. The next time your next door neighbor conman (or consultant) runs to you with a nice big fluffed up number, ask yourself whether he/she is handing you a misrepresented data. You may have saved yourself from unnecessary fees.