In the world of sales and marketing, understanding your target customer is the first step in developing any go-to-market strategy. Steve Jobs even said, "Get closer than ever to your customers. So close that you tell them what they need well before they realize it themselves.” Knowing your customer informs everything from product design to messaging to pricing…etc.. Your customers are your company. And if you’re company is derived from your customer, it makes sense to define who that customer with precision. This is the goal of the Ideal Customer Profile (ICP).
But while many people think they know their company’s ICP, but the reality is that it’s often not clearly defined. The CEO might think that a great potential customer looks one way, where another employee may believe differently. One can’t rely on tribal knowledge This disorder causes inconsistency that is ultimately felt by the customer. In this article, we’ll explore why it’s essential to know your ICP and who needs to be involved in defining it.
Why Knowing Your ICP Matters
Knowing your ICP can help you:
- Identify the right prospects: Understanding your ICP helps you identify and target the prospects who are most likely to buy from you. This saves time, resources, and helps you close more deals.
- Tailor your messaging: By knowing your ICP, you can tailor your messaging to resonate with the specific pain points and needs of your target customer. This improves the effectiveness of your marketing and sales efforts.
- Optimize your sales process: Knowing your ICP helps you optimize your sales process by understanding how your target customers make purchasing decisions, which channels are most effective, and how to build trust and credibility with your prospects.
Who Needs to Align on the ICP?
To build an effective ICP, it’s critical that all stakeholders in your organization align on a formal definition. This includes:
- Leadership: Executives should be clearly communicated the top potential customers to the company. Strategy should be built around these targets in every way.
- Sales: Your sales team is on the front line of identifying and engaging with potential customers. They have valuable insights into the characteristics of customers who are most likely to convert to a sale. Without their input, your ICP is likely to be incomplete.
- Marketing: Your marketing team is responsible for creating messaging and campaigns that target the right customers. By aligning on the ICP, your marketing team can create more effective campaigns that resonate with your target audience.
- Product: Your product team is responsible for building products that meet the needs of your customers. By understanding your ICP, they can develop features and functionality that meet the specific needs of your target customers.
- Customer Success: Your customer success team is responsible for ensuring that your customers are happy and successful with your product. By understanding your ICP, they can provide better support and identify opportunities for upsells and cross-sells.
How do you define your ICP?
To define your ICP, start by running an analysis of your existing customer base and top targets. If you don’t know your top targets, consult with your company’s c-suite.
A scientific approach to this exercise is to perform a regression analysis on a sample of recently won business. Using data enrichment tools like ZoomInfo or 6sense will give you a complete firmographic and technographic breakdown of these clients’ key attributes. You are looking for commonalities in attributes such as size, revenue, industry, funding stage, technographics, etc… You will find that your best clients share things in common, for example, 80% of your business comes from financial technology companies headquartered in the USA between 500-1,000 employees with annual revenue between $5-10MM.
Once you have this ICP defined, implement this into systems and rally your team around it.