Cook's Distance

Measure of influence of an observation on regression. A working definition from the RGM marketing glossary.

Schematic — Cook's Distance

Measure of influence of an observation on regression.

Common mistakes

Read that twice.The errors with Cook's Distance are predictable: one blanket rule, no context, chasing the word, raw benchmarks. Each is avoidable.

No segments. Treating Cook's Distance as one number for all. Break it out before you trust it.
No context. Reporting Cook's Distance with no baseline. A bare number cannot be judged.
Vanity focus. Gaming Cook's Distance instead of the result. Tie it to business value.
Raw benchmarks. Stacking Cook's Distance against rivals blind. Normalize for margin, pricing, and sales cycle.

What does Cook's Distance mean?

Measure of influence of an observation on regression. Settle what Cook's Distance covers first; the strategy follows from there.

Why does Cook's Distance matter?

Cook's Distance earns its place when it shapes a real decision. The leverage is in correct use, not in the word itself.

How do teams use Cook's Distance?

Teams put Cook's Distance to work on a spend split, a metric, or a head-to-head call. See the Netflix walk-through above.

What is the most common mistake with Cook's Distance?

Chasing Cook's Distance as a goal and benchmarking it raw. Both bury the real trade-off underneath.

What does Cook's Distance mean?: Measure of influence of an observation on regression. Settle what Cook's Distance covers first; the strategy follows from there.
Why does Cook's Distance matter?: Cook's Distance earns its place when it shapes a real decision. The leverage is in correct use, not in the word itself.
How do teams use Cook's Distance?: Teams put Cook's Distance to work on a spend split, a metric, or a head-to-head call. See the Netflix walk-through above.