“Percent” and “percentage points” are not interchangeable. If a rate moves from 20% to 25%, the difference is 5 percentage points, while the relative increase is 25%. Clear wording matters in reports, discounts, conversion rates and survey results.
Percentage points compare two percentages directly
Subtract the old rate from the new rate. A move from 20% to 25% is +5 percentage points. This is often the clearest way to describe a change in rates, margins or shares.
Percentage change measures the difference relative to the starting value
Take the difference, divide by the starting value and multiply by 100. The increase from 20 to 25 is 5 divided by 20, or 25% relative growth.
The starting value matters
A 5-point increase is a much larger relative change when the baseline is 10% than when it is 80%. Always state which measure you are using so readers do not infer the wrong scale.
Discount stacking is another common trap
Two consecutive 20% discounts do not equal a single 40% discount because the second discount applies to the already reduced price. Calculate sequential changes on the current value.
Percentage decrease and increase are not symmetric
A value falling from 100 to 80 decreases by 20%, but returning from 80 to 100 requires a 25% increase because the base is now smaller.
Use labels in reports
Write “conversion rate increased by 3 percentage points, from 7% to 10%” or “conversion rate increased about 42.9% relative to the previous 7%.” The extra words prevent ambiguity.
Worked example
Example
A click-through rate rises from 4% to 5%. That is an increase of 1 percentage point and a relative increase of 25% because 1 ÷ 4 = 0.25.
Practical checklist
Before you finish
- Use percentage points for direct differences between rates.
- Use percentage change for relative growth or decline.
- State the starting value.
- Apply sequential discounts one after another.
- Label the measure explicitly in reports.
Common mistakes
What to avoid
- Calling a move from 20% to 25% a 5% increase.
- Adding discounts that are applied sequentially.
- Comparing relative changes without stating the baseline.
- Assuming a 20% fall requires a 20% rise to recover.