Download a complete flowchart of all test selection paths as a study guide
💡 Help me understand "outcome variable"
The outcome (also called dependent variable or Y) is what you're trying to predict, explain, or measure. In marketing:
- Numeric: Revenue, conversion rate (%), time on site, order value, satisfaction score
- Binary: Did convert (yes/no), clicked ad (yes/no), churned (yes/no)
- Categorical: Product chosen (A/B/C/D), segment membership (high/med/low)
💡 Time Series vs. Cross-Sectional Data
This determines whether you need time series methods or standard regression/comparison:
- Time Series: Observations recorded in sequence over time (daily sales, weekly revenue, monthly KPIs). Past values may influence future values.
- Cross-Sectional: Observations from different units at same time (customers, campaigns, products). Order doesn't matter.
Key question: Does the ORDER of your observations matter? Would rearranging rows change your analysis?
💡 Help me understand "predictors"
A predictor (also called independent variable or X) is what you think influences or explains the outcome. Examples:
- One predictor: "Does ad spend affect revenue?" (X = spend, Y = revenue)
- Multiple predictors: "What drives revenue: spend, seasonality, AND campaign type?" (X₁ = spend, X₂ = season, X₃ = campaign)
Tip: Start with one predictor to understand the basic relationship, then add more for modeling.
💡 Help me choose predictor type
Your predictor's type determines which test you'll use:
- Numeric: Ad spend ($), days since last purchase, customer age, discount %
- Binary groups: Control vs. Treatment, Email A vs. Email B, Before vs. After
- 3+ groups: Four email designs, three price points, five geographic regions
💡 Independent vs. Paired data
This is about whether the same people/accounts appear in both groups:
- Independent: Different customers in each group. Example: Group A gets Email 1, Group B gets Email 2 (different people)
- Paired/Matched: Same customers measured twice. Example: Same customers see Offer A then Offer B, or before/after campaign
Key question: Can you draw a line connecting each observation in Group 1 to a specific paired observation in Group 2?