VWO calls a variation a Smart Decision when its potential loss is below the threshold of caring and its Probability to beat baseline is greater than or equal to 95%. Deploying the Smart Decision is a smart business decision because, in a business, you always try to maximize your output quickly. With our threshold in place, you will most likely not lose anything. And, in the best case scenario, you might even get something out of it.
How VWO Calculates the Threshold of Caring
The threshold of caring is the magnitude that decides whether to consider a variation to declare a Smart Decision or not.
The threshold of caring = Current conversion rate * multiplier * 100
where the multiplier is 0.001 for revenue goal and 0.0075 for non-revenue goal
In the current reporting system, the Conversion Rate of a variation is taken from the test results. Say it is 2.5%, the threshold of caring will be: 0.025 * 0.001 * 100 = 0.0025. Hence for a variation to be a Smart Decision, its potential loss must be below 0.0025, and the Probability to beat baseline is greater than or equal to 95%
When the potential loss of deploying a variation is small enough to be within the comfort threshold, and the chance to beat baseline is greater than or equal to 95%, SmartStats recommends that it’s a Smart Decision to deploy this variation. VWO tests can have multiple Smart Decisions whenever more than one variation outperforms the base variation. In such cases, you can choose to deploy the variation having the least potential loss value.
We do not ask for these details, we compute them based on the first week's data.
When is a Smart Decision Retracted in VWO?
Once a variation has been declared as a winner, the decision will be reversed if the Probability to beat baseline goes below 90%.