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