The Ideal Customer Profile or ICP is big news in marketing these days. Partly due to the growing popularity of an Account-Based Marketing (ABM), defining the ICP has become a necessity in order to establish exactly which accounts should be targeted as part of that approach. But the importance of the ICP goes deeper than this.
What Is An Ideal Customer Profile?
But first, let’s define our terms. Assuming we’ve learned the hard lesson that attempting to be all things to all people is a fast route to the poorhouse, the ICP is the clear and agreed definition of the type of organisation the business is trying to target, but more specifically (and there’s a clue in the name) the ideal customer, the one that will prove most profitable. It’s also important to understand that the emphasis here is on the business - not the individual within it. That comes later.
What should come out of an ICP analysis is a clear understanding (and perhaps more importantly agreement) as to the ideal target customer, encompassing:
The industry they operate in
The size of the company in terms of both revenue and employees
Geographical location
Typical business objectives
Maturity
Current situation and attitudes in regard to technology
That definition combines hard facts with more qualitative statements relating to the organization that might correspond to something like this:
“Our ICP is a tech start-up, ideally selling B2B. Based in the UK or Ireland, they have recently received seed or perhaps Series A funding and are looking to build and implement a go-to-market strategy. Although they’d like high-level strategic input from a positioning and marketing perspective, they are probably too early for a full time CMO”
The smarter bears in the audience may have twigged that this, or something like this, is my own ICP, and if they match this description I encourage them to get in touch.
How To Define The ICP
If you already have an established customer base, the best place to start is probably by taking a clear-headed look at who your most profitable customers are today. That provides a reasonably hard-headed view of who is actually paying the bills - but it isn’t the whole story. It’s also worth considering which existing customers ‘get’ the product or service, buy into the vision, and are most proactive in terms of working with the business.
At the same time, always be cautious of the customer deemed ‘strategic’ (often due to an impressive logo) who is in fact a poor fit, appears to want something from the product that it doesn’t and will never do, and in many cases aren’t actually contributing much to the bottom line (again, often due to the logo).
If you don’t have existing customers, and indeed even if you do, you’ll need to supplement this type of analysis with some qualitative work. At this point I could attempt to baffle you with science but in truth this means little more than sitting down with the key internal stakeholders and asking them the questions that lead to a sense of the ICP. Only one word of caution need apply here: make sure to interview individually before aggregating into something approaching a first pass at the ICP.
Next up - test it in the field. Find organizations that fit the ICP. Talk to them. Establish that your best guesses about their situation and motivation are reasonably accurate - and continue to evolve your ICP definition in a thoughtful way as you come across additional insights.
What To Do With Your ICP
So far, so much theory. But there’s no point creating an Ideal Customer Profile if you do nothing with it. The sole purpose of going through the process is to get down on paper an agreement that in turn informs decision making within the organization including:
Who we target with our marketing spend. If we’re going after large financial organizations, is Facebook advertising really such a great idea? With an ICP in place, any proposed tactical marketing campaign or investment can be evaluated in terms of how effectively it gets your message in front of the right people.
The product decisions we take. We’re all familiar with product management meetings that descend into rambling introspective discussions about what individual attendees ‘feel’ is important. But what matters to the ICP? If you don’t know, ask them (whilst always remembering that they may not clearly articulate what really matters to them and you may need to read between the lines)
The way we sell. If we know our ICP, and we have a very clear idea around what their objectives and fears are, we can position our product and tailor our message to address precisely those issues, and we’ll sell more effectively. Certainly more effectively than we would falling back on feature laundry lists.
Who we listen to - and who we politely ignore. To run a start-up or scale up is to receive huge amounts of advice and helpful pointers. God knows I’m in that business myself. Having an ICP clearly in mind helps filter out the noise and listen closest to those who are either in the ICP today or have clear experience of the market.
There are more reasons of course. The lesson is relatively simple - find your ICP, document it, and refer to it whenever you’re unsure about a course of action. It will be more helpful than you think.
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