What do the values on the back of an encoder mean?
If you have the datasheet for the exact manufacturer of the part, they may have meaning. Often a given encoder maker will have one (sometimes two) standard number(s) of steps for a given model. 

If it's a typical shafted mechanical panel encoder, it likely has more like 12-24 steps (full steps with both phases changing) and an equal number of mechanical detents. You can count the detents easily by hand if you attach a knob with pointer. 

The exact number is usually unimportant since the point is simply to get relative change, however if you use an encoder with far too few steps with firmware that expects more the user may have a sub-optimal experience.