Consultant Society: Business Case and Research

SLT Presentation - March 25, 2003

Rainmaker sub-team

Kevin MahlerDave Mitchell Susan RendaCorinne Smereka Jon Steffey

MICA - The Opportunity

SAE has 4,000 - 7,000 members and circulation recipients in consultant-related positions

SAE’s overall membership base and corporate associations are very attractive to consultants

SAE discontinued its print Consultant Directory, and thus has no formal mechanism for connecting consultants with companies who need them.

MICA - The Solution

Create a new society to provide members with a professional affiliation, networking benefits and to facilitate the connection between industry consultants and corporations…

The Mobility Industry

Consultant’s Association

Why a separate, affiliated association?

Provide a specialized professional membershipProvide a new, clearer value statement to current

non-SAE membersMake a clearer distinction from SAE, to counter

claims that new benefits should be included in SAE membership

Use affiliated status to draw on SAE’s brand strengths

No existing society meets these needs

Building a business case

One-on-one consultant interviews Found preliminary indications of interest, honed

value possibilities

Consultant Survey 1800 consultants in SAE’s database, with email

addresses Divided into 4 groups, to test various price points 293 respondents (16% response rate)

Overall Interest in MICA concept

31%34%

20%

9%

5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Probably Join Might Join Unsure Probably Not Not Join

65% of respondents indicated at least preliminary interest.

Join rates at different dues levels

0%

10%

20%

30%

40%

50%

60%

$150 $250 $300 $350

Much less price sensitivity from $150 & $250 than higher

Four Dues packages:

Dues: $150

Initiation Fee: $100

Preferred Membership: $200

Dues: $250

Initiation Fee: $150

Preferred Membership: $400

Dues: $300

Initiation Fee: $200

Preferred Membership: $600

Dues: $350

Initiation Fee: $250

Preferred Membership: $800

1) 2)

3) 4)

Package Acceptance Rates

0%

10%

20%

30%

40%

50%

60%

1 2 3 4

Package

% W

illi

ng

to

Pay

Dues

Initiation

Status

Revenues Scenarios:(assume similar acceptance rates for a market of 4000)Dues Only: Year 1 Mbrs Year 1 Rev. Year 1 Mbrs Year 1 Rev. 2 Year RevScenario 1 1938 290,625$ 2131 319,688$ 610,313$ Scenario 2 1611 402,778$ 1772 443,056$ 845,833$ Scenario 3 861 258,228$ 947 284,051$ 542,278$ Scenario 4 845 295,775$ 930 325,352$ 621,127$

Dues & InitiationScenario 1 1625 406,250$ 1788 446,875$ 853,125$ Scenario 2 1222 488,889$ 1344 537,778$ 1,026,667$ Scenario 3 861 430,500$ 947 473,550$ 904,050$ Scenario 4 845 507,000$ 930 557,700$ 1,064,700$

New Scenario:$250 + $100 1611 563,889$ 1772 620,278$ 1,184,167$

*Membership levels assume lower of acceptance rates betweenrelevant Dues & Initiation Fee responses.

Interest in proposed benefits

64%75%

59%

42%36%

55%46%

31%39% 37%

42%

13%

0%10%20%30%40%50%60%70%80%

Online

Dire

ctory

Consultin

g Opps

Job

Matching

Web S

ite &

Em

ail

Discuss

ion Fo

rum

Best P

racti

ces

Prof D

ev

Ins.

Disc.

Bus. S

erv. D

isc.

Prese

nt O

nline

Mag

azine

Other

Very Imp/Imp

Not Very/Not Important

Directory, job listing & matching and best practice surveys are tops.Professional Development, Web services & magazine have some interest

Benefits interest for most likely members:79%

85%

69%

50% 50%

66%58%

38%45% 47%

53%

17%

0%10%20%30%40%50%60%70%80%90%

Online

Dire

ctory

Consultin

g Opps

Job

Matching

Web S

ite &

Em

ail

Discuss

ion Fo

rum

Best P

racti

ces

Prof D

ev

Ins.

Disc.

Bus. S

erv. D

isc.

Prese

nt O

nline

Mag

azine

Other

Very Imp/Imp

Not Very/Not Important

Similar patterns, tend to regard everything as more important

Interest in corporate membership

41% belong to organizations with more than one consultant

35% of those believed their organizations might be interested in a corporate membership

Response to MICA name/tagline

43% indicated a positive response11% indicated a negative response

58% Full-time / 42% Part-time26% consulting 1-4 years, 28% 2-5 years,

46% for more than 10 years

Consulting Status

Consulting Field

Engineering Management 30%Engineering Design 46%Engineering Manufacturing 22%Information Technologies 14%Human Resources 5%Marketing 14%Accounting 0%Other 54%

(more than one could be chosen for each respondent)

Other Memberships

77% of respondents are SAE members64% of those expressed a positive interest in

MICA (vs. 65% overall)

25% of respondents are members of other consulting-related societies

84% of those expressed a positive interest in MICA

Conclusions

The MICA concept is viable and potentially profitable for SAE

Primary member-only value propositions include: Online consultant directory Consulting opportunity listings Best practices surveys and reports

Secondary possibilities: Web and email services, journal/magazine, business

services discounts, presentations to SAE members

Estimated Revenue StructureYear 1 Year 2 Year 3Projected Budget Projected Budget Projected Budget

Revenue 1,200 members at$240 each =$288,000$100 initiation feefor 1000 members =$100,000

1,500 members at$240 each dues,$100 initiation feefor 300 members =$390,000Member benefitsrevenue of $30,000

2,000 members at $240each dues, $100 initiationfee for 500 members =$530,000Member benefits revenueof $30,000

Expense $50,000 $60,000 $70,000Net $338,000 $360,000 $490,000Employees* 7 (E, part-time

commitment foreach)

7 (E, part-timecommitment foreach)

7 (E, part-timecommitment for each)

*(E) Existing *(N) New *(C) ConsultantNOTE: This revenue projection assumes a conservative initial market of 4000 potential members, and a 30%penetration of this market. In addition, it assumes that the initiation fee would be waived for the first 300 chartermembers, so the revenue is for dues only. Thus, revenues may be substantially higher than shown here. Expensefigures are estimates and could be higher, but will be refined in the business plan for this implementation.

Current Plan

Create a team to write and implement a complete business plan

Rhonda Buzard* Kevin Mahler Dave Mitchell Susan Renda Corinne Smereka Jon Steffey Becky Wiley** These potential team members have not yet been approached about potential involvement