Table of Contents
Why statistical significance is not business significance
The significance illusion
In classic experimentation, statistical significance is treated as the final authority.
If a result is significant, it is declared valid. If it is not significant, it is ignored.
In revenue systems, this logic is incomplete.
CBSplit was built because statistical clarity does not always equal business impact.
Statistical significance measures probability, not profit
Statistical significance answers:
* Is the difference likely real? * Is the variation unlikely due to randomness?
It does not answer:
* Does this increase net revenue? * Does this reduce refunds? * Does this improve subscription survival? * Does this protect processor health?
A statistically valid result can still lose money.
Small gains can be statistically real and financially irrelevant
A variant may show:
* 1% higher conversion * Slightly better click-through * Marginal EPC improvement
With enough traffic, these differences become statistically significant.
But after:
* Refund adjustment * Rebill evaluation * Acquisition cost reconciliation
The financial impact may disappear.
CBSplit evaluates net outcome, not just event difference.
Large business impact can appear statistically weak
Some improvements affect:
* Churn reduction * Refund containment * Rebill stability * Long-term LTV
These effects:
* Emerge slowly * Require longer observation * Produce delayed financial gains
They may not reach statistical significance in short test windows.
Yet their business impact can be substantial.
Revenue systems are non-linear
Statistical models assume:
* Stable environments * Isolated variables * Clean measurement windows
Revenue systems involve:
* Traffic shifts * Payment retries * Refund timing * Subscription churn * External platform changes
Significance calculated in isolation may ignore systemic effects.
CBSplit evaluates performance within operational context.
Statistical wins can increase risk
A statistically significant improvement may also:
* Increase refund rates * Raise chargeback exposure * Stress payment systems * Attract low-quality traffic
Statistical models rarely account for downstream risk.
Business significance must include risk exposure.
CBSplit integrates risk-aware metrics.
Time horizon changes business meaning
Statistical tests often operate within:
* Short time frames * Limited cohorts * Controlled conditions
Business outcomes unfold across:
* Multiple billing cycles * Refund windows * Traffic scaling phases
CBSplit extends evaluation beyond short-term statistical windows.
Decision quality depends on economic impact
Business significance requires:
* Net revenue improvement * Refund-adjusted profitability * Rebill durability * Cohort-based LTV growth * Processor safety
Statistical confidence without economic improvement is incomplete.
