Never Trust the Numbers
And How to Make Yours Look Good
By Gordon H. Bell
One great advantage of direct marketing is the ability to measure results. With the right data, marketers can make the right decisions to increase sales. Yet marketers (and senior executives) too often are misled by precise numbers derived from fuzzy math.
In his 1954 classic, "How to Lie with Statistics," Darrell Huff gives numerous examples of how "the secret language of statistics, so appealing in a fact-minded culture, is employed to sensationalize, inflate, confuse, and oversimplify … Many a statistic is false on its face. It gets by only because the magic of numbers brings about a suspension of common sense."
Though surely we have become much more sophisticated over the last half-century, the "suspension of common sense" seems to stay with us. Here are a few warnings to note.
Never Trust Percentages … Especially the High Ones
Reading the local paper recently, I was surprised by the "252 percent earnings decline" on a "4.6 percent" drop in sales for a regional billion-dollar retailer. How hopeless can they be to lose so much on such a small change in sales?
Looking at the numbers, the picture becomes a bit less dramatic. The journalist was correct: Earnings dropped from a profit of $13.3 million in 2000 to a loss of $20.2 million in 2001. Yet at the same time, sales dropped by $60 million. Now, think about the relationship between the dollar and percentage drop: