Truly understanding your customers is the only way to effectively market to them, sell to them, and delight them. That may bring to mind buyer personas, those fictionalized individuals who represent your customers. While well-articulated personas are absolutely necessary to creating valuable, relevant, compelling content, these are NOT the same as an ideal customer profile.
An ideal customer profile (ICP) is not a person, it is a business. A type of company that will get the most benefits from your products and services while giving you high value in return.
The foundation of a good ICP is data; factual demographics including…
the size of the business
the business’s industry
what the business does
the business’s revenue
why that business is likely to want your product and/or service
… and it goes far deeper.
An ICP should also include behavioral (recent activity) and psychographic information (what people in that company may be thinking/feeling). If available, information about actual individuals — specific buyers, users, and influencers — within a business can be very useful.
Another necessary element of an ICP is strategic intent. For instance, instead of targeting a prospect with a primary strategy of reducing costs, you look to attract prospects focused on reshoring as a supply chain strategy. Different, aren’t they?
The right strategic intent can result in working with a business with a quicker and more successful sales cycle, a high customer retention rate, and is likely to be a powerful ambassador for your brand.
Plus, your marketing team can more effectively share post-purchase communications to drive customer delight and build customer lifetime loyalty.
Trajectory is another element to consider. What does long-term success look like, and how realistically attainable is that? Is the business in a dynamic industry? Is leadership positioning the company properly, and is that business equipped to grow? What challenges and opportunities lie ahead?
Creating An Ideal Customer Profile
A solid ICP begins with understanding which customers will get the most value from your business while, at the same time, giving you profitable returns. But, don’t forget about the intangibles, such as how the relationship can provide marketing fuel for you and/or how your people feel about working with that customer. The intangibles matter!
Start the ICP creation process by looking at your own top-end customers. The best business relationships are symbiotic; they last long and stay strong because everyone benefits! As you think about customers in that context, rank them from top to bottom, and then take the top quarter and consider the factors that make them your most preferred customers.
You most likely won't have any customers that score strong on everything that matters. Yet, we’re going for the ideal here! So, identify all the things you want in a customer, starting with the things that make you valuable to them — because customers who love what you mean to them are most likely going to be valuable to you!
HOW DO YOUR CUSTOMERS BENEFIT FROM YOUR BUSINESS?
Do you help them grow their business profitably?
Do you help them lower their cost of doing business?
Do you provide them something they can’t elsewhere?
Do you have lots of relevant experience in their industry?
Do they learn things from you that are above and beyond what they pay you for?
Do you send business their way?
Does working with your business help them attract and retain talent, or improve the morale of their people? (remember the “intangibles”?!)
Now, turn your focus on how they’re valuable to you …
HOW DOES YOUR BUSINESS BENEFIT FROM YOUR CUSTOMER’S BUSINESS?
Is your business with them consistently growing?
Do they allow you to earn a better than average margin because they value what you do?
Are their practices and values consistent with yours, making them easier to work with?
Do your best people compete for the opportunity to work with them?
Do they provide you with marketing value by being a business reference or testimonial?
Do they share valuable business practices that help you improve your business?
Have they introduced you to important new vendors, customers, or business partners?
Does your affiliation with them as a customer provide marketing value on its own?
Now, let’s examine your top customers’ characteristics, which can predict new ideal customers…
WHAT DO YOUR CURRENT BEST CUSTOMERS LOOK LIKE?
Size matters; are they small, medium, or large?
Are they startups or mature businesses? Is growth critical or is profitability most important?
Do they have lots of experience buying from your industry?
How active have they been in investigating you as a potential solution?
How do they buy? Is it a formal corporate process or is it completely at the discretion of each decision maker?
What would they say is the most important factor in deciding to buy or not buy from you?
How do they view your products/services? Are you viewed as a commodity or an important value-add?
What is their culture like? Are their values well-articulated and demonstrated consistently?
How do they evaluate vendors after the relationship is launched? What matters most in the evaluation?
What kind of people do they hire and promote? Are most leadership positions filled by home-grown talent or do they usually go outside?
Dig Deep to Identify Important Customer Characteristics
When thinking about all the different ways to describe the best customers, it’s easy to continue going deeper and deeper into all the ways to describe the ideal.
When you think about constructing a truly thoughtful ICP, the first and most obvious application is in evaluating leads and opportunities. It’s wisest to focus energies on converting and closing leads that come closest to the ideal.
Additional, more far-reaching, benefits of understanding your ideal are creating content, planning social media activity, and articulating your brand promise to that ideal.
Just like any human relationship, the more you understand about what makes your ideal customer tick, the better equipped you are to connect with them with relevance, meaning, and credibility.
In addition to creating an ICP, another key to business growth is aligning your marketing and sales teams to ensure they’re on the same page about what makes a good lead and what your prospects and customers care about. Our eBook is a comprehensive guide to preparing, building, and implementing a sales and marketing service level agreement (SLA). Get yours by clicking the link below!
Posted by Greg Linnemanstons With 18+ years in senior management roles at Fortune 500® and medium-sized companies, Greg has deep marketing and sales experience with CPGs and manufacturing. He leads strategic initiatives with clients and is involved in developing client inbound marketing plans. Greg holds an M.B.A. from Northwestern's Kellogg School of Management and a B.A. in Economics from Lawrence University.