Ideal customer profiles are a must for go-to-market teams, especially sales and marketing. A good buyer profile helps focus the team’s efforts on the right kinds of people and companies, shorten the sales cycle, and increase performance. Plus, sharpening your profiling skills is also practical, because defining your ideal customer profile is an ongoing process.
What is an ideal customer profile?
An ideal customer profile (ICP) is a set of qualities that define the person and/or organization that has the greatest potential to buy your product.
In the B2B world, an ICP addresses both people and companies. This is because you need to identify the person who will have the greatest influence on a purchase decision, but products are also sold based on what the company needs (AKA customer pain points).
Building an ideal customer profile takes effort and knowledge, and it might need revision once in a while as your familiarity with your market increases or if your product changes. So why go through the hassle? Here are just some of the reasons:
- ICPs maximize efficiency because salespeople spend more time on prospects that will convert. Having a good idea about what the ideal customer wants also results in better pitches and shorter sales cycles.
- An ICP is particularly important when using account based marketing, because this strategy depends on nurturing individual contacts and understanding their needs.
- In addition to sales, other parts of the company depend on an ICP. For instance, product designers need to think about what features an ideal customer wants, while marketing and sales need to be on the same page when it comes to figuring out strategies and methods to gain more customers.
What is the difference between ideal customer profiles and buyer personas?
Another concept often used in B2B sales and marketing is the buyer persona. In many ways, this is like a short bio and personality profile of a person who wants what you are selling.
Salespeople and marketers use personas to understand prospects from a human perspective. For instance, if the persona is someone who is a frequent social media user, then nurturing them through LinkedIn is an option to consider.
The main difference between personas and profiles is that a persona refers only to a type of individual based on their job role, while the ICP also looks at the organization where they work.
In addition, there are normally multiple personas for each ICP. Let’s say your product is a SaaS accounting software. The ICP might be a corporate accounting department, but remember: you’re selling to an actual person. So you might have one persona who wants to be able to dive deep into the numbers and will be a day-to-day user, while the other is a more administrative role who needs to view analytics at a glance to make sure everything is on track. This persona information is what salespeople will use to customize pitches for each.
Ideal customer profile examples
There are basically two examples of ways to organize an ideal customer profile.
One of them is like a shopping list. It shows each characteristic and what you should be looking for as you review a bunch of prospects. As an example, here are three basic parts of an ICP with blanks filled in:
- Revenue – $1-10 million per year
- Industry – Software
- Location – International
The other way to create an ICP layout is in the form of a scorecard. Let’s say that you have a stack of company profiles and want to evaluate them according to how they match your ICP. In this case, you would go through each profile and assign a score for every characteristic. The companies with the top scores fit into an “ICP” category and get sent as high-potential targets to the sales team.
No matter which format you choose, it’s often a good idea to start with a basic checklist. ICPs usually have a few distinct categories and are specialized depending on what you sell. But almost every ideal customer profile includes some of the same basic details.
Industry or department
Some products are relevant to specific industries, like construction equipment. Others, like a CRM, are useful for departments in organizations across many industries. There are even those that have pretty much universal appeal, such as messaging apps. In this case, the information from other parts of the ICP will be important in order to narrow down the prospect list.
Pain points
B2B products are usually created to solve a critical problem for companies. When evaluating prospects, the question is, “how much do they feel this pain?” The answer can be found through research like technographic data (what technologies a certain company uses). But there’s a good chance that you might not discover the specific pain points until you actually talk to the prospect.
Revenue, profit, and purchase process
The usual rule is that a company with a lot of revenue can afford more purchases and is more open to investing in third-party products. But if a company is strapped for cash because profits are low, then you’ll need to reconsider. Additionally, large companies tend to be more demanding and have more complex needs. You should also note that larger organizations tend to have buying cycles as part of the purchase process, so making sure that you approach them before budgets run out is crucial. Finally, identifying the stakeholders and decision-makers within a target company is vital because you will need to connect with and convince the most influential people involved in buying your product.
Geography
Knowing the physical location of prospects is necessary, even for online products, because sales activities need to account for time zone, language, and culture. If you’re located far away from otherwise promising accounts, then depending on your product or team, they may not be ideal.
Keep in mind that for a new product, some of the data that goes into an ICP will be missing. For instance, having knowledge of the purchase process that is common in your target market might only happen over time. For reasons like this, ICPs tend to be evolving documents.
But other details can be filled in through intent signals. New companies have often not been around long enough to generate intent data through their web site or product review sites. They can instead turn to third party services that supply company profiles and can even help narrow down the search to something approaching an ICP. Going forward, you’ll probably use these sources again when researching prospects more specifically.
How do you write an ideal customer profile?
Behind an ICP is a whole range of ideas that everyone on your team should be familiar with. Probably the two most essential are value proposition and product-market fit, which are hopefully already part of your Go-to-Market plan. Together, they form the starting point for an ICP.
A value proposition is a clear, simple statement of the benefits that a company/product provides. In contrast, a product-market fit describes how these benefits meet an important demand in the market. When looking into product-market fit, the obvious question is, “why would our target market buy this?”
Using this basic question, you can start brainstorming an ICP. For instance, you can list all of your product features and benefits, and match the list with what kinds of people or businesses need them. This provides a few key pieces of the puzzle such as “pain points” and “industry/department.”
For part two of the exercise, you can look at other essential ICP factors as a way to boil down the brainstorming results. For instance, is your product relatively expensive? If yes, then you’ll put a large figure under “Revenue/Profit”, which excludes low revenue companies and gives you an ICP that is more manageable.
These steps are only the start. As your product sales increase, you should take the opportunity to survey the most active and enthusiastic users as a way of sharpening the ICP.
Key Takeaways
- An ideal customer profile defines the person and/or organization with the greatest interest in buying your product
- Essential parts of the ICP include industry/department type, pain points, geographical location, revenue, profit, and purchase process
- Creating an ICP starts with your value proposition and product-market fit.
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