In running a business, speaking to groups, teaching a university class, I’ve learned that often an exact-sounding guess in the right range is more useful than “I’ll check on that and get back to you” or “I’m not sure exactly, but it’s around such-and-such.” So “ROI of 7%” sounds much better than “something like 5-10%.” And it means really the same thing.
In the world of business there is the fact that business information is worth the decisions you make with it. Technically, it’s worth the difference in your bank account between your bank balance with the information and your balance without it. Obviously one of those two values has to be hypothetical, but the concept is still true.
Similarly, 1.23 million registered users is a lot more credible than “more than a million,” but in business terms it means just about exactly the same thing. Annual growth of 9.7% is more credible than annual growth of “about 10%” and for decision purposes, it means the same thing.
Seth Godin reminded me of phenomenon this morning with his post Let’s make up some numbers. And his point is a lot like what Chip and Dan Heath are saying in Made to Stick, about communicating ideas. Seth says specifics sound better:
Marketers make up numbers all the time. It’s a great way to tell a story with efficiency, and if you do it in the right spirit (meaning that the numbers are as close to true as you can get them) there’s little downside or damage. Except to your reputation when you’re wrong…
Do we need to know how much the Dow moved to a tenth of a point? No, of course not. But when we start delivering numbers with that level of accuracy, people can’t help but believe them.
I would add that in many cases making a number more specific, but in the right range, isn’t really being wrong. It’s communicating well.