Why Percentages Don't Add Up

by on 29 October, 2007 - 16:18

by: Roger Dooley

Which is scarier - undergoing a potentially fatal surgical procedure that has a 95% survival rate, or one that causes death in 1 out of 20 patients? If you are like most people, you would find the latter statistic far more worrisome, even though mathematically the two statements are the same. A variety of research shows that marketers should choose carefully when throwing numbers at their customers.

Although Philip Zweig’s neuroeconomics book, Your Money and Your Brain, is geared to showing how poorly our brains are wired for evaluating investments, it has plenty of content useful to marketers. Zweig spends time discussing framing, i.e., how the way information is presented can affect the way it is interpreted. One of the more surprising examples of framing is the difference between percentages and absolute numbers. Zweig notes that people react differently even to the fairly subtle variation between “10%” and “one out of every 10.” Here are a few examples from Zweig’s chapter on perception of risk:

When psychiatrists were told that “patients similar to Mr. Jones are estimated to have a 20% chance of committing an act of violence” within six months, 79% were willing to release Mr. Jones from a mental hospital. But when they heard that 20 out of every 100 patients similar to Mr. Jones are estimated to commit an act of violence” in the same period, only 59% said they would let him out…

Psychologist Kimihiko Yamagishi asked people how concerned they were about various causes of death. When he informed people that cancer kills 1,286 out of every 10,000 people, they rated it as 32% riskier than they did when he told them it kills 12.86% of the people it strikes…

As psychologist Paul Slovic puts it, “If you tell people there’s a 1 in 10 chance of people winning or losing, they think, ‘Well, who’s the one?’ They actually visualize a person.” More often than not, the one person you will visualize winning or losing is you.

The neuromarketing implications are clear: for maximum impact, use real numbers, not percentages. If you have something positive to say about your product or service, express it in terms of absolute numbers.

Good: 90% of our customers rate our service as “excellent” Better: 9 out of 10 customers rate our service as “excellent”

Conversely, if you must present negative information (and are not bound legally to present it in a particular way), expressing it as a percentage may mute its impact somewhat. In general, of course, it’s better to focus on the positive - few marketers would include negative information in their ads voluntarily. (”Most people like our product a lot, but 5% think it sucks!” is an unlikely tag line.) And when marketers DO have to include negative information, like the side effects of a pharmaceutical product, they may have specific legal requirements as to what they can and can’t say. But there are times when marketing and public relations people do have to address negative topics, as when dealing with press coverage of a company problem. In these cases, I’d recommend percentages. “Only 1% of our laptop power supplies have actually caught on fire” is, from a framing standpoint, better than, “Only 1 out of 100 …” Bad news is bad news, but people will be less likely to visualize their legs getting scorched if they don’t imagine themselves as “the one.”

Sometimes, enough numbers combined with percentages can turn data into mere window dressing. Here’s a statement from Franklin Templeton Investments: “86% of Franklin Templeton’s long-term mutual fund assets were in funds ranked in the top two quartiles of their respective Lipper peer groups for the three-year period, 87% for the five-year period and 93% for the 10-year period ended September 30, 2006.” Got that?

Percentages still have their uses. A product that is 99.94% pure does indeed sound free of contaminants, and there may not be a better way of making the point. In that case, though, the writer isn’t expecting the reader to really analyze or understand the number other than the fact that is is really close to a perfect 100%.

Summing up: To communicate with clarity and impact, use real numbers whenever possible. Your targets will understand you better and identify more closely with the statistics when they relate to numbers of people.

Original Post: http://www.neurosciencemarketing.com/blog/articles/why-percentages-dont-add-up.htm