1. Presented to the SME Member Council December 20, 2011 1

2.  The study objectives for Phase 1are to: ◦ Identify the awareness patterns of primary SME products, services and initiatives. ◦ Identify, from the portfolio of membership products, services and initiatives, which specific activities are most essential to the decision to join and retain membership in SME. ◦ Identify how the most important activities should be combined into the most logical configuration of membership categories. ◦ Identify similarities and differences by key audience for awareness, use, activity and membership configuration.  Data was collected online during August 2011 from a sample of SME members and prospects. ◦ SME provided lists for inviting members and non-members to participate. ◦ As an incentive for participation, respondents received a coupon for a $50 discount on the purchase of an SME product or service.  A total of 1976 individuals completed the Phase 1 survey. 2

3.  TURF analysis identifies the products and services that attract the widest range of members by determining which products appeal to unique sub-sets of the market. ◦ This analysis identifies nine products that, when offered in combination, appeal to 70% of the market. ◦ At a minimum, these nine products and services should be included in the basic SME member package. 3

4.  The sample is diverse with regard to age, member status and market.  The sample includes sufficient responses to allow reporting of results for key segments of interest  The greatest proportion of study participants are engineers ◦ Higher level professionals comprise 28% of the study sample.  Most participants are Caucasian  Industry makeup is 35% Target, 22% Core, 39% Other (educators, consultants, etc) 4

5. 5 Highest Awareness Moderate Awareness Tooling U has relatively low awareness

6. 6 But Tooling U among the top 5 importance in the Decision to Join

7.  It is a form of statistical analysis useful for devising optimal configurations or offerings.  In this study TURF identifies the products and services with most impact on the decision to join or retain membership. ◦ It begins by identifying the product or service with appeal to the largest number of participants. ◦ Next, it identifies the product or service that will appeal to the largest number of individuals who are not attracted by the first offering. ◦ In the example below ME Magazine has the most impact – attracting about 39% of the sample; trade show/expo access is second in impact attracting almost 11% (Incremental Lift) who would not join for ME Magazine and increasing total reach to 49% (% Selected) ◦ TURF continues identifying the next “best” product or service to offer to attract individuals who were not interested in the previously identified products/services. ◦ As more of the sample has indicated interest, the “incremental lift” associated with another product or service declines until it becomes inconsequential to add more products and services to the offer.  In total, this analysis examined the impact of 24 SME products and services. 7

8.  ME Magazine is most impactful; followed by trade show/expo access and discounts on Lean Certification.  The incremental impact of the remaining items on the list is lower because the first three products attract about half the sample. 8 Higher Performing

9.  The top 10 products/services reach or appeal to 79% of members. ◦ In comparison the top 10 account for 59% of non-members, as non-members are less inclined to join the organization. ◦ With all 24 products and services considered, 62% of non-members might join compared to 81% of members. 9

10.  Some products are of importance and motivate professionals to join SME but do not appear near the top of the TURF analysis. ◦ This may occur because they appeal to the same audience that is interested in another SME product or service that has already entered the TURF; hence the second product is not appealing to a unique or unduplicated portion of the target market. ◦ Examples include discounts on certified manufacturing technician/engineer programs, unlimited online training via webinars and the SME annual conference. ◦ These products and services may still be important to include in the basic membership package.  Other products and services that are lower in the TURF analysis also score relatively low on impacting the decision to join SME. ◦ Examples in this category include affinity program for book summary service, credit card and SME store discount; and VIP experience at expos and conferences. ◦ SME could consider selling these products and services separately at a premium or discontinuing them. 10

11.  Tooling U is not a current member benefit  Tooling U has low familiarity among the survey respondents, yet it came back as a recommended addition to the base membership benefits suite  Tooling U was in the top 10 TURF results for both members and non-members, and ranked higher among non-members ◦ Tooling U had higher incremental lift among non-members, suggesting it’s reach is more powerful for recruitment at the current level of awareness/familiarity 11