How to avoid confusion between Percentage and Percentage Points?

Question

Whenever I have to communicate a change in a numerical metric, I found myself struggling if I should use Percentage or Percentage Points. Especially, when the metric is a percentage itself, it can be really tricky.

For example, if we track the Retention Rate of users in a platform and the percentage increased from 10% to 30%, we can either say that we had an increase of 20p.p. or we had an increase of 200%.

Another example, if we classify the risk of a business decision to 5% of revenue drop and an alternative choice has 7% revenue drop. We can say 2p.p increase or 40% increase.

Things to consider

• Not every team member has a math/statistical background to understand the difference of the two options without giving an explanation. The difference is not common in the "average-person".
• Not everyone has English as his/her first language and the right choice of words might not have a big effect. For example, using "increase by .." or "increase to.." might not have any difference at all.
• The use of p.p. or % can be either verbal in person or through an online, video call, an official report or a short message in a chat app (slack, Skype etc)

Why it matters?

• The number per se, might have a different impact to others. For example, an increase of 20p.p could "feel" low, while the increase of 200% "feels" enormous.
• Using % only ends up to misunderstandings. For example, I found myself in a situation where a team member understood an increase of 50% to a 10% retention rate was ended up to 60% retention rate.

What to do?

How to choose the way I communicate such an increase in the following cases

• Verbal in person or video call
• An official report or documentation
• A short, informal message like in Slack or Skype

Answer 1

Use whatever conveys the message more clearly.

This usually means to use percentages only for absolute metrics and use %-points for metrics which are presented as percentages (e.g. "retention rate increased by 5%-points" in your example).

From my experience you can expect almost everybody to know the difference. The only exception would be highly operational staff, e.g. blue collar staff on the shop floor, cashiers in a supermarket etc.

In the latter cases, or if there are language barriers (e.g. audience is not fluent in English) or technical issues (e.g. a bad connection), make the changes explicit. For example:

• Retention rate increased from 10% to 15%
• Potential revenue drop of 7% compared to 5% in the first scenario