## 6731Re: basic math question - percentages

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• Jun 2 10:43 AM
Stephane,
I am glad you brought that point up. Besides the math logic and
terminology, that was actually my point in asking the question. You
could see conversions going from 1.0% to 1.2% and proudly announce
that there was a 20% increase in conversions. But what if the goal
is 1.5% - the 20% good news has to be taken with a grain of salt. It
drives me crazy when the marketing types take only the 20% increase
(or whatever the biggest number is), spin that to upper management,
and before you know it, somebody is wildly happy about a 20%
conversion rate. Because I have gotten burned by this in the past
(and it seems you have also), I favor reporting on "differences" in
these instances and not percentage increases.
Maureen

--- In webanalytics@yahoogroups.com, "S.Hamel" <shamel67_news@...>
wrote:
>
> Ho boy do I love Web analytics and this newsgroup!
>
> I have seen so many times people running around with a single
number and
should be
> printed in all Web analytics manuals. What's important is the
interpretation
> of the numbers, not the numbers themselves. This exemlpe also
highlight how
> important it is to look at the numbers from various angles. In your
example,
> the average sales price could be the same, say 25\$, but the
revenues for the
> month would be 40% lower! (10*25\$ vs 6*25\$)
>
> That's why a web analytics solution doesn't do any magic, it's the
people
> using them that makes all the difference! :)
>
> Cheers,
> Stephane
>
> ----- Original Message -----
> From: "Peter Michael Sopp" <peter.sopp@...>
> To: <webanalytics@yahoogroups.com>
> Sent: Thursday, June 01, 2006 4:56 AM
> Subject: Re: [webanalytics] Re: basic math question - percentages
>
>
> > I'm just a poor sociologist not a mathematician. Nevertheless I'm
hoping
> > I could clarify the points already mentioned by others.
> > The main point is to understand that the result of a substraction
is a
> > difference and not a percentage.
> > The difference is April - March, so 1% - 1.2% = 0.2%-points. The
result
> > of a substraction is always a absolute number and never a
percentage!
> > To calculate the percentage growth or percentage increase you
need a base:
> > (April-March)/March = simple growth rate. Now you can multiply it
by 100
> > and you get 20% (= growth rate in percent: The difference of the
> > percentages is related to the percentage of March).
> > Let's give an interesting example:
> > a1t1 = absolute number of visitors in March
> > a2t1 = absolute number of buyers in March
> > (a2t1/a1t1)*100)
> > a1t2 = absolute number of visitors in April
> > a2t2 = absolute number of buyers in April
> > (a2t1/a1t1)*100)
> > Now the following could happens: The number of visitors as well
as the
> > number of buyers decrease. Nevertheless the growth rate is
positive
> > because relativly more visitors has converted to buyers in April
as in
> > March.
> > For example: In March you have a simple conversion rate of
> > (10/1000)*100 = 1% and in April (6/500)*100=1.2%.
> > The conclusion is - well that's up to you!
> > Hope this was helpful
> > Peter
> >
> > matpflum schrieb:
> >> I have always struggled with the logic behind this seemingly
simple 0
> >> rate was 1% in March and is 1.2% in April, that the rate
increased
> >> by .2% and not 20%? So it's a simple subtraction. I'm not a
> >> mathematician, but I think that it is wrong to compute a
percentage
> >> of a percentage because the percentages were calculated off of
> >> different bases. Are there any mathematicians who can explain
which
> >> way is correct? Thanks.
> >> Maureen
> >>
> >>
> >>
> >
> >
> >
> >
> >
> > ---------------------------------------
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