Sample size confidence
Also called Shrinkage, Pulled toward the average.
Trusting a figure in proportion to how many deals stand behind it. A group of leads with few deals has its value pulled part of the way toward the average; one with many keeps close to its own figures.
Why it matters
Small groups produce extreme numbers by chance. Priced at face value, a lucky group of twenty-five looks like the best leads in the business, and the platforms pay up to whatever they are told a lead is worth.
What goes wrong
The pull is not a correction of your data. The close rate and deal size shown are still your own; what changes is how far the multiplier moves from the average. The more deals, and the more wins among them, the less it moves.
Whether a group is priced at all is decided first, on its own raw figures. The pull then decides by how much, so a real difference in a small group is kept, only more cautiously.
What this product does about it
How it was worked out shows the raw multiplier and the one priced after this pull, side by side, with sample size confidence named as the reason.
Next to this
How it applies in your trade
The same method, worked through for each kind of business: what a lead is worth, what is known on arrival and what to prepare.
The rest of this step
- Day-0 value
- Close rate
- Average deal size
- Expected value per lead
- Cohort
- Multiplier
- Value cap
- Profit on ad spend (POAS)
- Value spread
- Flat feed
- Early gate
- Lead scoring vs lead valuation
- Propensity modelling
- Predicted lifetime value
- Conversion value rules
- New customer acquisition goal
- Conversion adjustments
- Recalibration
- Model drift
Measure this on your own data
The diagnostic reads a CRM export in your browser and reports your volume, your match rate and the spread between your leads against the thresholds in this glossary. Nothing is uploaded and no account is needed.