Terms

Champion/Challenger Test

A Champion/Challenger test is a method for comparing different operational decision strategies in a live production environment. This technique pits the current, established approach, known as the "champion," against one or more alternative strategies, or "challengers." By routing a portion of real-time transactions to each, organizations can measure their performance against key metrics to identify the most effective decision logic.

Applications in Industry

The Champion/Challenger framework is widely adopted across various sectors. In finance, it's used to refine credit scoring models and fraud detection algorithms. Insurance companies leverage it to optimize underwriting rules and claims processing logic for better risk management.

Retail and e-commerce businesses apply this method to test dynamic pricing and personalized recommendations. Telecommunications companies can compare models for predicting customer churn. This continuous testing allows businesses to adapt and improve their core operational strategies in real-time.

Benefits and Challenges

While the Champion/Challenger model offers a powerful method for refining business logic, it presents both significant advantages and implementation challenges. It allows for safe, data-driven experimentation in a live environment, directly measuring impact on key performance indicators.

  • Optimization: This approach enables continuous, data-driven improvement of core operational decisions. By testing new strategies against a proven champion, companies can safely enhance performance and adapt to market changes without major disruptions.
  • Complexity: Implementing a proper test requires significant technical overhead. It involves managing traffic distribution, ensuring unbiased sampling, and monitoring results in real-time, which can be resource-intensive to build and maintain.

Champion/Challenger Test vs. A/B Testing

While both methods involve experimentation, their core applications and strategic focus differ significantly.

  • Champion/Challenger: This test is used for optimizing complex, operational decisions in a live production environment. It focuses on improving core business logic, like risk models or pricing strategies, by measuring real-time impact on key business outcomes. It's ideal for enterprises wanting to refine internal processes safely.
  • A/B Testing: This method typically compares variations of a single user-facing element, such as an email subject line or a webpage layout. It's primarily used in marketing to optimize user engagement and conversion rates, making it well-suited for testing specific changes in customer-facing campaigns.

Implementation Strategies

This is how you can set up a Champion/Challenger test.

  1. Define the "champion" model—your current, best-performing strategy.
  2. Develop one or more "challenger" models with alternative logic.
  3. Route a small, random portion of live traffic to the challengers, with the majority going to the champion.
  4. Measure the performance of all models against predefined key performance indicators (KPIs).
  5. Promote the winning model to become the new champion and repeat the cycle.

Case Studies and Examples

The Champion/Challenger model is applied across industries to validate and improve core business processes. Real-world applications demonstrate how companies use this method to drive better outcomes. Here are a few common examples:

  • Lending: Testing a new credit approval model to lower default rates.
  • Marketing: Comparing different promotional offers to maximize customer lifetime value.
  • E-commerce: Evaluating a new product recommendation engine to increase conversion.
  • Insurance: Refining a fraud detection algorithm to reduce false positives.

Frequently Asked Questions about Champion/Challenger Test

How much traffic should be allocated to a challenger model?

Start by routing a small portion of traffic, often 5-10%, to the challenger. This minimizes potential negative impact while still collecting sufficient data. The allocation can be increased as confidence in the challenger model grows, ensuring a controlled rollout and risk mitigation.

Isn't this just another name for A/B testing?

While similar, Champion/Challenger tests focus on optimizing complex, back-end operational logic like risk models. A/B testing, in contrast, is typically used for front-end, user-facing elements like ad copy or button colors to improve engagement or conversion rates.

How do you manage the risk of a poorly performing challenger?

Risk is managed by allocating only a small fraction of live traffic to challengers. Continuous monitoring of key performance indicators is crucial. If a challenger underperforms significantly, it can be quickly disabled to limit any negative business impact, preserving operational integrity.

Other terms

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Hadoop

Hadoop is an open-source framework designed for the distributed storage and processing of extremely large data sets across clusters of computers.

Hadoop

Data Visualization

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Data Visualization

B2B Contact Base

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B2B Contact Base

Gone Dark

Going dark is when a once-responsive prospect suddenly stops all communication, leaving you wondering what went wrong.

Gone Dark

Audience Targeting

Audience targeting is the process of segmenting consumers into specific groups to deliver more personalized and relevant marketing messages.

Audience Targeting

Average Revenue per User

Average Revenue per User (ARPU) is a key performance indicator that calculates the average revenue generated from each user or subscriber.

Average Revenue per User

Brand Equity

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Brand Equity

MEDDICC

MEDDICC is a sales qualification framework for complex B2B deals. It helps reps identify and validate key aspects of an opportunity to close more effectively.

MEDDICC

Lead Qualification Process

The lead qualification process is how you determine which prospects are most likely to become customers by evaluating them against specific criteria.

Lead Qualification Process

Programmatic Advertising

Programmatic advertising uses AI and real-time bidding to automate the buying and selling of digital ad space, targeting specific audiences.

Programmatic Advertising

Canary Releases

A canary release is a deployment strategy where new software is rolled out to a small user group first, minimizing risk before a full release.

Canary Releases

Marketing Attribution

Marketing attribution is the process of identifying which touchpoints contribute to a conversion and assigning value to each of them.

Marketing Attribution

Call Disposition

Call disposition is the process of labeling the outcome of a call. It helps sales teams track interactions and plan their next steps effectively.

Call Disposition

Drupal

Drupal is a free, open-source content management system (CMS) for building websites and applications. It's known for its robust flexibility.

Drupal

Zero-Based Budgeting (ZBB)

Zero-based budgeting (ZBB) is a method where all expenses are re-evaluated and must be justified from scratch for each new budget period.

Zero-Based Budgeting (ZBB)

Competitive Intelligence (CI)

Competitive intelligence (CI) is the ethical gathering and analysis of market data to inform strategic business decisions and gain an advantage.

Competitive Intelligence (CI)

Buying Process

The buying process is the journey a customer takes from first realizing a need to making a final purchase decision and evaluating it afterward.

Buying Process

Warm Outreach

Warm outreach is contacting prospects with whom you have a pre-existing connection, like a mutual contact, making your message more personal and effective.

Warm Outreach

Target Buying Stage

The Target Buying Stage identifies a prospect's position in the buying journey, from initial awareness to the final decision to purchase.

Target Buying Stage

End of Quarter

“End of Quarter” (EOQ) refers to the final weeks of a business quarter when sales teams rush to meet quotas, often leading to a flurry of deals.

End of Quarter

Sales Partnerships

Sales partnerships are strategic alliances where two companies co-sell products to expand their reach, generate new leads, and increase revenue.

Sales Partnerships

B2B Leads

Learn about B2B leads, including identifying quality B2B leads, generating B2B leads effectively, & B2B leads vs. B2C leads: understanding the differences.

B2B Leads

C-Level or C-Suite

The C-suite, or C-level, refers to a company's most senior executives. Their titles usually start with 'Chief,' such as CEO, CFO, or CTO.

C-Level or C-Suite

No Forms

No Forms is a method for capturing lead data directly from your website visitors' profiles without requiring them to fill out any forms.

No Forms

Video Prospecting

Video prospecting is the sales technique of sending personalized videos to potential customers to grab their attention and secure more meetings.

Video Prospecting

B2B Data Enrichment

Learn about B2B data enrichment, including benefits of B2B data enrichment, implementing B2B data enrichment strategies, B2B data enrichment vs. data cleaning.

B2B Data Enrichment

GDPR Compliance

GDPR compliance means following the EU's strict data protection laws to ensure the secure and lawful handling of personal data.

GDPR Compliance

Customer Retention Rate

Customer Retention Rate (CRR) is the metric that measures the percentage of customers a company has kept over a specific period of time.

Customer Retention Rate

B2B Marketing KPIs

Learn about B2B marketing KPIs, including identifying key B2B marketing KPIs, setting achievable KPI targets, B2B vs B2C marketing KPIs: understanding the differences.

B2B Marketing KPIs

Tokenization

Tokenization is the process of breaking down text into smaller units called tokens, such as words or characters, for AI to process.

Tokenization

Touches

Touches are the individual interactions you have with a prospect throughout the sales process, from emails and calls to social media messages.

Touches

Mobile App Analytics

Mobile app analytics involves collecting and analyzing data from mobile apps to understand user behavior and optimize the app's performance.

Mobile App Analytics

User Interaction

User interaction is any action a user takes within a digital interface, like clicking a button, scrolling a page, or filling out a form.

User Interaction

Video Selling

Video selling uses personalized video messages to engage prospects, build rapport, and guide them through the sales funnel to close more deals.

Video Selling

Ransomware

Ransomware is a type of malicious software that encrypts a victim's files, holding them hostage until a ransom is paid for the decryption key.

Ransomware

SPIN Selling

SPIN selling is a sales technique using a sequence of questions—Situation, Problem, Implication, Need-Payoff—to uncover a buyer's needs.

SPIN Selling

On-premise CRM

An on-premise CRM is a system hosted on a company's own servers, offering complete control over data, security, and system maintenance.

On-premise CRM

Product Recommendations

Product recommendations are a marketing strategy that uses customer data to suggest relevant products, boosting sales and customer engagement.

Product Recommendations

Key Accounts

Key accounts are a company's most valuable customers, vital due to their significant revenue contribution and strategic importance for growth.

Key Accounts

Consideration Buying Stage

The consideration buying stage is where potential customers have defined their problem and are now actively researching and evaluating solutions.

Consideration Buying Stage

Churn

Churn, also known as customer attrition, is the rate at which customers stop doing business with a company over a given period.

Churn

Chatbots

Chatbots are AI-powered programs that simulate human conversation. They interact with users via text or voice, typically for customer support.

Chatbots

Quality Assurance

Quality Assurance (QA) is the systematic process of ensuring a product or service meets specified quality standards from development to delivery.

Quality Assurance

Customer Acquisition Cost

Customer Acquisition Cost (CAC) is the total cost a business spends to gain a new customer. It includes all sales and marketing expenses.

Customer Acquisition Cost

Small to Medium-Sized Business

A small to medium-sized business (SMB) is a company whose employee count and annual revenue fall below certain industry-specific thresholds.

Small to Medium-Sized Business

Funnel Optimization

Funnel optimization is the process of improving each stage of the customer journey to maximize conversions and drive revenue growth.

Funnel Optimization

Sales Automation

Sales automation uses software to streamline and automate repetitive, manual sales tasks, freeing up reps to focus on selling.

Sales Automation

Key Performance Indicators

Key Performance Indicators (KPIs) are measurable values that demonstrate how effectively a company is achieving its key business objectives.

Key Performance Indicators

Customer Relationship Management Hygiene

CRM hygiene involves regularly cleaning and updating your customer data to ensure your CRM system remains a powerful and reliable tool.

Customer Relationship Management Hygiene

Rollback Procedures

Rollback procedures are a set of steps to restore a system to a previous, stable version after a failed update, ensuring minimal disruption.

Rollback Procedures

Net 30

Net 30 is a common payment term where a client has 30 calendar days from the invoice date to pay for goods or services in full.

Net 30

Virtual Private Cloud

A Virtual Private Cloud (VPC) is a secure, isolated section of a public cloud. It lets you provision your own logically isolated resources.

Virtual Private Cloud

Lead Enrichment

Lead enrichment adds third-party data to your raw lead lists, creating fuller prospect profiles for more effective and personalized outreach.

Lead Enrichment

Customer Lifetime Value

Customer Lifetime Value (CLV) is the total revenue a business expects from a customer throughout their entire relationship with the company.

Customer Lifetime Value

Lead Scoring Models

Lead scoring models rank prospects by assigning points for their behaviors and demographics, helping sales teams prioritize their outreach.

Lead Scoring Models

Mid-Market

Mid-market companies are businesses larger than small businesses but smaller than large enterprises, often defined by revenue or employee size.

Mid-Market

SEM

Search Engine Marketing (SEM) is a digital marketing strategy that uses paid tactics to increase a website's visibility in search engine results.

SEM

SQL

SQL (Structured Query Language) is the standard language for managing and querying data within relational databases.

SQL

B2B Intent Data

Learn about B2B intent data, including how B2B intent data enhances sales strategies, sources of B2B intent data, leveraging B2B intent data for competitiveness.

B2B Intent Data

Operational CRM

An Operational CRM is a system that automates and improves customer-facing business processes like sales, marketing, and customer service.

Operational CRM

Sales Methodology

A sales methodology is the framework that guides how your sales team approaches the entire sales process, from prospecting to closing deals.

Sales Methodology

Analytical CRM

Analytical CRM analyzes customer data to uncover actionable insights, helping businesses make smarter decisions and improve customer interactions.

Analytical CRM

Firmographic Data

Firmographic data is information used to classify firms. It includes attributes like industry, employee count, location, and annual revenue.

Firmographic Data

Serviceable Obtainable Market

Serviceable Obtainable Market (SOM) is the portion of the market you can realistically capture with your current resources, sales, and marketing.

Serviceable Obtainable Market

Personalization

Personalization is the practice of using data to tailor products, services, or content to an individual's specific needs and preferences.

Personalization

Data Security

Data security protects digital information from unauthorized access, corruption, or theft throughout its entire lifecycle.

Data Security

Brand Loyalty

Learn about brand loyalty, including how to build brand loyalty, benefits of brand loyalty, measuring brand loyalty, & strategies for increasing loyalty.

Brand Loyalty

Pipeline Coverage

Pipeline coverage is a key sales metric. It's the ratio of your total open pipeline value to your sales quota for a specific period.

Pipeline Coverage

Dynamic Territories

Dynamic territories are fluid sales assignments that adjust based on real-time data, ensuring reps can focus on the highest-value accounts.

Dynamic Territories

Target Account List

A Target Account List (TAL) is a focused list of high-value companies that a business specifically aims to convert into customers.

Target Account List

Customer Engagement

Customer engagement is the ongoing, value-driven relationship a business builds with its customers to foster brand loyalty and awareness.

Customer Engagement

Search Engine Results Page

A Search Engine Results Page (SERP) is the page displayed by a search engine after a user enters a query, listing results ranked by relevance.

Search Engine Results Page

Data-Driven Marketing

Data-driven marketing uses customer data to inform marketing decisions, optimize campaigns, and deliver personalized experiences to consumers.

Data-Driven Marketing

Digital Sales Room

A Digital Sales Room is a private online space where sellers share all relevant content with buyers to streamline the sales cycle.

Digital Sales Room

Event Marketing

Event marketing is a strategy where brands engage directly with target audiences through live events like trade shows, conferences, or webinars.

Event Marketing

Email Cadence

An email cadence is a scheduled sequence of emails sent to prospects over a specific period to nurture leads and drive engagement.

Email Cadence

Revenue Operations (RevOps)

Revenue Operations (RevOps) is a business function that aligns a company's sales, marketing, and customer service teams to drive predictable revenue.

Revenue Operations (RevOps)

On Target Earnings

On-Target Earnings (OTE) is a salesperson's total potential pay, combining base salary and commission for hitting their sales quota.

On Target Earnings

Incident Response

Incident response is an organization's systematic approach to managing and mitigating the aftermath of a security breach or cyberattack.

Incident Response

Headless CMS

A headless CMS is a back-end content repository that delivers content via API to any front-end, decoupling the content from its presentation layer.

Headless CMS

Account Development Representative

An Account Development Representative (ADR) identifies and qualifies new business opportunities, creating a pipeline for account executives.

Account Development Representative

Economic Order Quantity

Economic Order Quantity (EOQ) is the ideal order quantity a company should purchase to minimize its total inventory-related costs.

Economic Order Quantity

Intent-Based Leads

Intent-based leads are potential customers whose online actions—like searches or content engagement—signal a clear interest in buying a solution.

Intent-Based Leads

Marketing Qualified Lead (MQL)

A Marketing Qualified Lead (MQL) is a prospect who has shown interest based on marketing efforts but isn't yet ready for a sales conversation.

Marketing Qualified Lead (MQL)

DevOps

DevOps is a culture and set of practices that merges software development (Dev) and IT operations (Ops) to shorten development cycles.

DevOps

Sales Velocity

Sales velocity is a key metric measuring the speed at which your company makes money. It shows how fast deals move through your sales pipeline.

Sales Velocity

Channel Partner

A channel partner is a company that works with a manufacturer or producer to market and sell their products, software, or services to customers.

Channel Partner

Opportunity Management

Opportunity management is the process of tracking potential sales from first contact to a closed deal, helping teams prioritize and win more.

Opportunity Management

B2B Data Solutions

Learn about B2B data solutions, including unlocking the power of B2B data, & key components of effective B2B data solutions.

B2B Data Solutions

Stakeholder

A stakeholder is any individual, group, or party that has an interest in an organization and the outcomes of its actions.

Stakeholder

Conversion Path

A conversion path is the journey a visitor takes to complete a desired goal, such as making a purchase, filling out a form, or subscribing.

Conversion Path

Fault Tolerance

Fault tolerance is a system's ability to continue operating without interruption when one or more of its components fail.

Fault Tolerance

AI Data Enrichment

AI data enrichment uses artificial intelligence to automatically enhance and update raw data, making it more complete, accurate, and valuable.

AI Data Enrichment

Account-Based Sales Development

Account-Based Sales Development (ABSD) is a focused strategy where SDRs target key stakeholders within specific, high-value accounts.

Account-Based Sales Development

BANT Framework

Learn about BANT framework, including implementing BANT in sales strategy, advantages of the BANT methodology, & BANT vs. other qualification models.

BANT Framework

Dark Funnel

The Dark Funnel describes customer buying activities that are untrackable by companies, such as private chats and word-of-mouth referrals.

Dark Funnel

CCPA Compliance

CCPA compliance is adhering to the California Consumer Privacy Act, a law that grants consumers more control over their personal data.

CCPA Compliance

AppExchange

AppExchange is Salesforce's cloud marketplace, offering a vast ecosystem of apps and expert services to extend Salesforce functionality.

AppExchange

CRM Data

CRM data is the information businesses use to manage customer relationships. It covers contact details, purchase history, and communication logs.

CRM Data

Lead Nurturing

Lead nurturing is the process of developing and reinforcing relationships with buyers at every stage of the sales funnel.

Lead Nurturing