Setting appropriate confidence thresholds

Confidence thresholds determine how certain you need to be before declaring an experiment successful. While the standard 95% confidence level is common, the appropriate threshold should vary based on the risk and impact of implementation decisions. Higher-risk changes warrant stricter confidence requirements, while lower-risk experiments can use more relaxed thresholds.

When setting confidence thresholds, consider both the potential downside of being wrong and the opportunity cost of waiting longer for higher confidence. For critical flows like checkout or signup, you might require 99% confidence before making changes. For less critical features like content recommendations, 90% confidence might be sufficient to capture value faster while accepting slightly higher risk.

Many organizations adopt a tiered approach to confidence thresholds based on experiment context. This flexible framework balances speed and certainty while reducing the risk of false negatives, potentially valuable changes that never reach traditional significance levels. Remember that every decision has two potential errors: implementing ineffective changes or missing valuable opportunities by being too cautious.