How can you measure the ROI of something that is experimental (which much of #SocBiz currently)?

Hi Brian,

Thanks again for your question! Natalie gave a great answer in Roundtable #1 (The Promise of Social CRM, pt 1). She addressed the question about 35-40 min into our talk.

Let me take a moment here to give a different perspective to add to Natalie's answer.

From an ROI perspective, "experimental" translates as uncertainty or unknowns. Higher uncertainty translates into higher risk. You can still perform an ROI analysis, but the potential return may be lower because of the greater uncertainty.

This isn't new to business analysis. Lots of potential corporate investments can carry unknowns. A prime example from my own past in petroleum exploration relates to investing in geologic prospects where uncertainty is extremely high.

The way I like to approach ROI analysis is to consider 3 cases.

The Minimum Case reflects your most conservative expectations. It shows what you think you can accomplish with a minimum of resources and risk. Because of this, your expected outcome is low too but it's what you believe you can absolutely achieve.

The maximum case is reflective of a wonderful world where every thing is optimum and outcomes far exceed your expectations. It carries high risk to accompany its super high potential outcome.

Sitting in the middle is the Most Likely Case. It carries moderate risk with moderate returns. It's an achievable case but one where you'll also likely face some challenges to hurdle.

If you present ROI to an executive team in terms of those 3 cases - min, most likely, and max -- then you also give execs a context to make the right investment decision for the company.