I started reading Fitness for Purpose in the exact moment lots of discussions around market and product segmentation was happening at Elabor8. Traditional marketing segmentation approaches were not resonating with me, and I felt like doing to check the box. The ideas brought in the book were so compelling that I’ve decided to give them a go and trying stuff out as I was reading. This talk will share this case study with distilled theory and practice of: - Design + Implementation + Service Delivery of professional services - Market segmentation by customer purpose - Fitness Box Score and F4P Cards - The four types of metrics

1. Fit-for-purpose Framework
distilled theory and practice
Principal Consultant & Head of Technology Services
marcio.sete@elabor8.com.au
Marcio Sete
@marciosete

2. @marciosete

3. Market segmentation by customer
purpose (not demographics)
The four types of metrics: fitness criteria,
health indicators, improvement drivers,
and vanity metrics
The three dimensions of products and
services: design, implementation, and
service delivery
How to assess fitness of your product or
service using
F4P Cards and Fitness Box Score
Fit-for-Purpose Framework
@marciosete

4. #1 – THE THREE DIMENSIONS OF
….PRODUCTS AND SERVICES

5. Fit-for-purpose components
@marciosete

6. Consulting services: the three components
Design
Service catalog and intended
approach:
● Capability Assessment
● DevOps Squads
● Practitioner Coaches
● The Learning Dojo
@marciosete
Implementation
Consultants:
● Technical knowledge,
skills and experiences
● Human skills
● Ability to execute the
intended approach
Service Delivery
Customer experience with:
● Sales and pre-sales
● Lead time to answer
● Technical Fit
● Cultural Fit
● Customer Service
● Troubleshooting
● Value added stuff

7. To be fit-for-purpose for different customers,
design, implementation, and service delivery
must be sufficiently good.
#1 – THE THREE DIMENSIONS OF PRODUCTS AND SERVICES

8. #2 - MARKET SEGMENTATION
BY CUSTOMER PURPOSE

9. different people & contexts →
different purposes →
different selection criteria →
different purchasing decisions →
different vendors
@marciosete

10. Fitness for purpose review
@marciosete

11. The best stories came in this order
■ Observation of facts (from current customers)
■ Rich and contextualised speculation of future (potential customers)
■ Contextualised speculation of future (consulting community)
■ Poor speculation of future (myself behind my screen)
@marciosete

12. Technology
Strategy
& Advice
Software
Lifecycle
Improvements
Capability
Uplift
Delivery +
Coaching
Staff
Augmentation
Market segmentation by customer purpose
@marciosete

13. Defining the strategy for each segment
■ Target? Non-target?
■ Protect, encourage and grow
■ Seek improvements
■ Be neutral
■ Switch-off
@marciosete

14. Same persona have different consuming
identities when fulfilling different needs.
Each identity composes a different market
segment which has different selection criteria
and thresholds.
#2 - MARKET SEGMENTATION BY CUSTOMER PURPOSE

15. #3 – F4P CARDS & FITNESS BOX SCORE

16. Template for Fit for Purpose survey
1. Tell us why you selected [our product or service]? List up to 3 reasons
2. For each reason, purpose or objective, please indicate how “for for purpose” you found this service?
5. Extremely
4. Highly
3. Mostly
2. Partially
1. Slightly
0. Not at all
3. For each reason, purpose or objective, please state specifically why you gave your rating for question 2.
@marciosete

17. Sample of a F4P Card
@marciosete

18. Interpreting the scores
■ Scores of 4 and 5
Satisfied - Fit for customer purpose
■ Score of 3
Neutral - Acceptable but not delighting
■ Scores of 2 or below
Dissatisfied - Unfit for customer purpose
@marciosete

19. 70/ 20/ 10 (30) 14/ 17
70% thinks our service was fit-for-[their]-purpose
20% thinks our service was neutral or mediocre
10% thinks our service was not fit-for-[their]-purpose
Thirty purposes have been identified
People invited to answer the F4P Cards
People who answered the F4P Cards
@marciosete
Fitness box score

20. @marciosete

21. @marciosete

22. @marciosete

23. F4P Cards and Fitness Box Score are simple
tools to capture customer purposes, level of
fitness, and customer narratives.
#3 – F4P CARDS & FITNESS BOX SCORE

24. #4 – THE FOUR TYPES OF METRICS

25. The four types of metrics
Healthy Indicators
with a healthy range
Improvement Drivers
with a target
Fitness Criteria (KPIs)
with thresholds
Vanity Metrics
@marciosete

26. Fitness Criteria (KPIs) with thresholds
■ What makes a customer selects you, are your Fitness Criteria
and they should be your KPIs — Key Performance Indicators
■ Minimum threshold: below which the product or service is
unfit-for-[the customer]-purpose.
■ Exceptional performance threshold: Your differentiation and
perhaps an enabler of market disruption.
@marciosete

27. Some fitness criteria are universal
■ Lead time and its predictability
■ Quality and its predictability
■ Conformance with models, frameworks, standards and
regulatory requirements
■ Price and affordability
@marciosete

28. Market segments
Daily
Rate
Lead time for
mobilisation
Level of expertise Proof Points
Technology
Strategy & Advice
$$$$ < 4 weeks
● Holistic view
● Knowledge in Software
Engineering, Lean, Agile, Product
& Design, Delivery, Organisation
Design
● Good stories to tell
● Consultant CV including experience in
transformations
● Consultant thought leadership
● References
● Case Studies
Software Lifecycle
Improvements
$$$ < 4 weeks
● Sound experience in the subject of
the engagement
● Can not blink
● Expected to bring options and
tradeoffs
● Consultant CV including deep
expertise in the subject of the
engagement
● Consultant thought leadership
● References where they have delivered
similar solution before
● Case Studies
Delivery +
Coaching
$$ < 4 weeks
● Need to check some boxes and be
operational from day one
● Nice if brings some extras
● Can learn on the job
● Consultant CV including their overall
experience
Staff
Augmentation
$ < 2 weeks
● Need to know the core / basics to
start working
● Consultant CV including overall
experience

29. Healthy Indicators with a healthy range
■ Don’t indicate selection but are something that you need to
monitor as it might give you early warning of problems that will
eventually manifest in a failure to be fit-for-purpose
■ They have a guide range but no ideal value, threshold, or target
@marciosete

30. ■ Improvement drivers are important, but they don’t indicate
selection, nor do they have a direct relationship with customer
satisfaction
■ They have a target value to be achieved over time
■ When the target is reached, improvement drivers are usually
abandoned or changed into a health indicator.
Improvement drivers with a target
@marciosete

31. Vanity Metrics
■ Vanity metrics make us feel good, where more is always better
■ Have no meaningful impact on decision making, don’t predict
desirable outcomes or customer satisfaction, don’t drive
improvement, don’t have a target, and don’t indicate general
health.
@marciosete

32. Consulting services: the four types of metrics
@marciosete
Fitness Criteria
● Daily rate
● Lead time for
mobilisation
● Consultant
expertise and
human skills
Healthy Indicators
● Revenue
● Ebit
● Employee
engagement
● Client
satisfaction
Improvement Drivers
● Utilisation
● # case studies
● # strategic
engagements
Vanity Metrics
● # Engagements
● # Employees
● # Conferences
sponsored
● # blogs
● # Meetups

33. Homework: Look at your metrics
■ How would you classify them based on the options above?
■ Can you identify thresholds for your fitness criteria?
■ Can you identify targets for your improvement drivers?
■ Can you identify ranges for your general health indicators?
■ Can you align your improvement drivers with your fitness
criteria?
@marciosete

34. To understand what your customers expect and
what keeps them coming back again and again,
you need to understand why they choose your
product or service.
You need to understand their purpose.
#4 – THE FOUR TYPES OF METRICS

35. what I want you to remember...

36. @marciosete
Same persona have different consuming
identities when fulfilling different needs.
Each identity composes a different market
segment which has different selection
criteria and thresholds.
To understand what your customers expect
and what keeps them coming back again and
again, you need to understand why they
choose your product or service.
You need to understand their purpose.
To be fit-for-purpose for different
customers, design, implementation, and
service delivery must be sufficiently good.
F4P Cards and Fitness Box Score are simple
tools to capture customer purposes, level of
fitness, and customer narratives.

37. Principal Consultant &
Head of Technology Services
https://www.linkedin.com/in/marciosete
https://twitter.com/elabor8
https://twitter.com/marciosete
https://medium.com/@Elabor8
https://medium.com/@marciosete
Thank you! Danke dir!
www.elabor8.com.au
marcio.sete@elabor8.com.au
Marcio Sete