Updated: Jan 21
Modern sales is a complex matter, which makes it critical to know how to define your ICP (Ideal Customer Profile) and engage them. The ICP maps out the organizational, technological, demographic and other characteristics of companies that you’d like to turn into customers. It will act as a compass that will help you determine the people who matter the most for your business.
This guide will show you how to create an ideal customer profile. But before that, let’s quickly define ICP.
What is an Ideal Customer Profile?
An ideal customer profile is the description of an ideal but imaginary customer that’d be most likely to buy your solutions because they would derive the most value from what you offer.
A simpler definition of ICP is the ideal customer for the solution you sell. As we will soon see in this post, the attributes of an ICP include industry, size of business, location, decision makers’ profiles, and more.
What is the difference between an Ideal Customer Profile and a Buyer Persona?
A buyer persona is a generalized representation of your customers considering their demographics, goals, motivators, and challenges. Buyer personas provide structure and context and that’s why they’re important.
An ideal customer profile defines a fictitious company that has all of the qualities that would make them the best fit for the solutions you provide. An ICP is particularly interesting if you’re using account-based selling/marketing, or ABS/ABM, which means you’ll be able to focus on reaching your company’s target audience.
Why use ICP?
There are many reasons why you should know what's an ideal customer profile for your business. The short answer is that ICP helps you direct your resources in the right place.
Here are the top five reasons why you should use it:
ICP improves your chances: With the ICP, you not only understand your prospect better, but you also understand how they express themselves when they discuss their challenges.
ICP optimises your resource utilisation: It ensures that you invest your energy in people and organizations that will turn out to be the right fit for your business.
ICP provides you direction: Creating an ideal customer profile will make sure you are aligning your resources in the correct direction.
ICP gets you more of what you like: It brings a much-needed clarity on whom you should be reaching out to and whom you’d rather keep on hold.
ICP brings clarity to your processes: Knowing whom you’re trying to sell to helps you review and improve your own promotional processes.
How to Create an Ideal Customer Profile?
The step-by-step process to identify your ideal customer profile comprises four broad characteristics. These characteristics cover three items each. By understanding and defining each of them, you will be able to build your ICP.
Ready? Let’s get to it!
Techie or Technophobic? - Technological Insights
Are we talking about a Tech-savvy or a Tech noob audience? What kind of literacy does your product require? Here are a few things you should have in mind…
Technology usage: You want to find out what technology your target organizations use. That will tell you what kind of integrations, patches, or customization you might be required to perform in order to have the organization accept and use your product.
Technological maturity: Does your customer use experimental, untested technology, cutting-edge technology, or slightly older but established technology? Smaller the gap between the sophistication of what you sell and what they use, the better your chances of selling to them.
Solution deployment: It’s important for you to understand how your customers will use your solution. That’s mainly because their solution deployment style will tell you whether they’ll achieve the kind of success you wanted them to, which, in turn, defines your future success with similar customers.
Knowledge is Power - Organizational Insights
Knowing how your potential buyer fits in the firm and how the firm fits in the business ecosystem is key. This will help you understand how your own company can relate to them and, ultimately, if you’ll be a good fit.
Decision-makers: You want to learn which people will ultimately make the decision of buying your solution. For instance, the finance team will look closely at the ROI while the production team will have an eye on the quality improvement you can bring. Be sure to understand who’s going to give the final nod.
Raison d'être: Are they quality conscious to the point of being almost paranoid? Will they look at the after-sales support, more than anything else? Or are they guided largely by the way your solution ensures data privacy? Among all the number of reasons, you want to figure out the single compelling reason they’d buy from you.
Value delivery: Refine the way you articulate the value you deliver. The better you can define it for them, the stronger your case becomes. And it’s not just for the immediate sale but also for future recommendations and referrals they’ll provide. If they think you’ve delivered a rockstar solution, they won’t stop talking about it.
It’s Time for a Check-Up - Internal Research
Look inside your company, speak to your customers and analyse how the buying process unrolled. Where did things click for the buyer or where did things go sour? It’s very important to have this feedback in order to minimize mistakes, which is why having an ideal customer profile is so important. These are the three aspects you should have in mind:
Successful customers: Talk to your successful customers. How are they achieving amazing results with your solution? Have they discovered some special use cases? Document how more customers can achieve similar results. And while you are at it, don’t forget to understand their buying processes, because that will tell you a lot about how organizations make such decisions.
Feedback and tickets: And complaints too. Dig deeper into when and why customers turn to you with requests for help. What kind of support would your future customers expect? What kind of product training or customer education will it take to make them raise fewer tickets? Then map it out onto your ideal customer profile.
Successful sales patterns: Your past sales can uncover some invaluable insights. What did your salespeople do to convert your previous customers? What processes did your sales teams follow? What were the factors they stressed during every interaction with the client? That’s one window into the customer’s mind you always want to peek into.
Let’s Data it On - Data Analysis
After you collect all the data you need to build your ICP, it’s time to analyse it and take a look at certain key attributes such as budget, purchase process and revenue.
Numerical data: This is one of the relatively easier sections of defining your ICP. What’s the approximate turnover and headcount of the customer you will best serve? In particular, what’s the size of the department that’s going to use your solution? And, importantly, what budget do they have for solutions like yours? Data like this will keep you focused and efficient.
Analytical data: Such information is as important as, or sometimes more important than, the numerical data. For instance, if you sell your solution to a heavyweight (think Google or Amazon), will the sales agreement allow you to display their names on your website? How difficult (or expensive) will it be to serve them? As an example, a client that contributes to 60% of your total revenue but consumes over 80% of your support team resources is likely not the perfect fit for you.
General terms: Considering the logistical, legal, or similar restrictions, you may be able to serve certain geographies and not others. You also want to identify if you’ll be required to meet certain special conditions for certain locations or zones and whether it would be profitable for you to do so.
This is key to define your Ideal Customer Profile
Get as much data as possible on your ICP and integrate it into your sales or marketing strategy, see how it works. We also advise you to review your ideal customer profile once a year or maybe more if your product changes.
Ready? Set? Profile!
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