A few years ago the Apple CEO Tim Cook was asked by an analyst how important iMac sales were to Apple.
He said that iMac sales were $22 billion.
He could have left it there.
Except he knows something that a lot of us don’t.
He knows never to leave a number hanging.
He knows that numbers, especially large numbers, don’t mean a lot to us without context.
Of course $22 billion is a large number.
But how large?
Tim Cook went on to use 2 power phrases to bring numbers to life.
First he said, that’s the equivalent of one-third of Apple’s sales.
Second he said, to put that into context if Apple were a stand-along company they would be number 110 on the Fortune 500.
Ok, so now I get how important iMac sales are (or were) to Apple.
It’s a trick that Tim Cook uses regularly to bring numbers to life, and he’s not the only one.
It’s a tried and tested formula used by business leaders, marketeers and politicians.
It’s just us finance people that didn’t get told the secret of bringing numbers to life.
And you can use the same technique to make the same number seem really big and important, or small and insignificant.
The recent Brexit campaign was dominated by one number.
Well actually, the number the leave campaign decided to use was £350m a week.
(by the way we’re making no comment on whether the number was accurate or not, all we’re doing is looking at how the number was used)
The leave campaign knew that a big annual number like £18.2 billion was too hard for people to get their head around, because it lacked context.
(The equivalent of) £350m a week is much easier to get to grips with.
They didn’t stop there though.
They went one step further and said, to put that into context thats X thousand extra nurses or Y thousand hospital beds.
Now this is very clever because they are comparing the number to something emotional, pulling at the heart strings.
And their final trick?
As any great marketeer knows, the single best way to bring a number to life is to make it very big.
And stick it on the side of a bus.
Which is what they did.
The remain campaign hit back and used the same trick to try and make £350 million look small.
They compared it to the overall government budget and said it was the equivalent of less than 1% of total spending.
The mistake they made?
Maybe not comparing it to something that touched people’s hearts in quite the same way.
And so the £350 million just seemed to get bigger and bigger and bigger as the campaign went on.
Just goes to show that it’s not accuracy that counts when it comes to bringing numbers to life.
So what? How can I use this to bring numbers to life?
The next time you have an important (accurate) number to communicate, bring it to life using these simple tips.
Step 1: Make the number big and put it on the side of a bus (bus is optional)
Step 2: Decide whether you want to make your number seem big or small
Step 3: Say that’s the equivalent of and turn the number into a ratio, %, amount per day
Step 4: Say to put that into context and compare it to something concrete that your audience will intuitively understand and that is relevant to them. Pick something emotional for best effect.
Here’s a few more examples of the principles in practice:
Netflix is just £6.99 a month. That seems a lot smaller than £85 a year.
Protect your family for less than £1 a day with our life insurance. £1 a day seems much smaller than £365 a year, and the emotion is loaded in up front.
Unlimited online access for less than price of a cup of coffee. £3 a day doesn’t sound a lot does it? How about £1,000 a year?
Leasing a new car (or equivalent) for just £395 a month, seems a lot less than buying the same car for £45,000. And of course in the small print there’s the deposit, ballon payment and excess mileage charges.
Here’s a few ways you could use this to spice up your finance presentations:
I used this when I was a finance director, to bring numbers to life It certainly grabbed the attention of the Board!
The profit gap is £1.2m. That’s the equivalent of £12m of sales. To put that into context none of us will get a bonus.
When I said this 3 people dropped their Blackberry’s (yes, that how long ago it was!) and someone else actually woke up from a post lunch snooze.
Within 15 minutes we had agreed a profit recovery plan and cost-savings had come out of the woodwork.
Behind me on the screen (my bus) I had one number on a slide – £1.2m.
It was a technique I had learned from a previous CFO who only ever had one number per slide. He made it big and then talked about it.
Here’s another one I used to bring numbers to life when I was a sales director:
Product X earns us £1.20 per unit. Product Y earns us £3.40 per unit. That’s the equivalent of 3 times the profit for the same effort. To put that into context you could hit your sales target in March and take the rest of the year off.
Behind me on the screen I had a picture of someone on the beach relaxing.
One of my team said, so you’re saying if we hit our targets we can go on holiday.
I said yes.
And so will I.
But not with you 🙂
What if accountants wrote adverts?
If us accountants wrote adverts they would go something like this:
‘Sign up to Netflix for £6.99 a month. That’s the equivalent of £85 a year. To put that into context, assuming you are a member for the rest of your life, and at a personal cost of capital of 2%, that’s the equivalent of £4,250 in today’s money.’
The actual advert:
Netflix. Free trial.
And that my friends is the difference between an accountant and a marketeer.