What's an ideal customer profile? Definition
In B2B sales and marketing, an ideal customer profile (ICP) describes an imaginary company's attributes that find the best solution to their main pain points in the product or service your company sells.
Also, it is the best customer you would love to have in terms of brand ambassadorship and the quickest sales cycle. In other words, an ideal customer is a lead that is most likely to buy from you, and a profile is a list of descriptions to capture that.
What goes into an ICP? Standard attributes include demographic, geographic, sociographic, behavioral, and product use data. Unique attributes have non-standard data points that can be critical in your niche (i.e., you sell fintech subscription-based services and see hedging experience as a crucial data point in your ICP).
Are ICPs and BPs synonymous?
No. An ideal customer profile and a buyer persona are two different marketing instruments. A profile is not an ideal customer persona. It’s simply a set of metrics for the type of company your product has the best fit that can be fleshed out into several buyer personas. The buyer personas describe the individual characteristics and psychographic data of decision-makers and points of contact who actually make a deal.
Knowing who buys from you the most (ICP) helps marketing tailor lead generation campaigns more effectively and generate the highest-quality leads. The detailed buyer personas help sales reach out to targeted individuals with personalized messages and close deals faster and more effectively.
Thus, you target a company that fits your ICP and nurture the decision-makers according to insights from your buyer personas.
For example, here's an example of a well-developed ICP:
B2B enterprise SaaS with 10 to 100 team size based in the USA, UK, Germany, Israel, or the Netherlands and making $500K to $1500K in revenue. Has no streamlined lead generation strategy, a low brand awareness, and zero marketing-sales alignment. A martech stack includes a CRM, marketing and sales automation, and LinkedIn Sales Navigator. Occasionally outsources marketing activities to SEO / PPC agencies. Has no regular marketing budget with irregular marketing spending.
Then, one of the buyer personas may sound like something like the following:
Marketing director for a US software company, female, age 35 to 55, married with college-aged kids, lives in the suburbs. Is outgoing and modern, looks for solutions online but is trustful of referrals and recommendations from her peers. Is active on LinkedIn and other social media platforms. Tends to spend more time on her smartphone than her laptop. Rarely takes calls or answers emails during business hours. Catches up on emails late at night and at the weekend.
An all-encompassing sales and marketing strategy includes an ICP and relevant buyer personas, from basic firmographics to more comprehensive psychographic data, to achieve the best results in lead generation and improve sales conversion rates.
Why is an ICP important for B2B lead generation?
An ICP is not a piece of formal documentation to be developed when a new business is set up and then never revisited. An ICP is to be adjusted as often as sales and marketing learn more data about the target audience and key customers. To put it simply, an ICP is a steering wheel that takes you to higher revenue attainment and sales goals the shortest route.
Ultimately, matching all the leads against your company’s ICP will boost your lead generation efforts, but let’s examine in greater detail the five reasons for using an ICP for your B2B lead generation campaigns.
Reason 1. Targeting the right leads
Do you want to blow your marketing budget? Run marketing campaigns without a tailored ICP and sell to the entire market. You will generate leads and even convert some of them, but at what rate? A behavioral profile of your ideal customer helps you focus your marketing efforts on chasing only high-quality leads because why on earth would you want to waste money on prospects who have little to no interest in your product?
Create an ideal customer profile, and you will learn the common traits your current and potential customers share and target leads who have them. An ICP will let you know what social platforms your potential customers hang out with, what pain points they have, and what actions will most effectively target them. As a result, your pipeline will be filled only with the right leads, a ripe opportunity for sales conversion.
Reason 2. Improving lead nurturing
You’ve used an ICP to generate leads. Now, when the leads are at the top of the sales funnel, keep using your ICP to personalize outreach. The leads are to feel your product is destined particularly for them. At the lead nurturing stage, an ICP suggests relevant keywords and critical information to make SEO on the company’s website and landing pages speak right into the leads’ hearts. SDRs write email copy, having learned about the challenges and pain points of the target audience from the company’s ICP. Organic search and paid ads are adjusted to maintain interest and respond to the needs and goals of your ideal customers.
Reason 3. Perfecting your timing
Meet leads where they are and when they are ready to buy. First, having your ideal customer profiles detailed can help identify what social media platforms high-quality leads use. Figuring out the channels to find high-quality leads is essential.
A well-developed ICP also allows SDRs to shot-list the best-fit companies and track buying signals through marketing automation software. If you know your potential clients frequent LinkedIn, advertise there. If they are active users of Saleshacker: arrange a guest post there. If they prefer live events, attend one.
A specific and detailed ICP will give marketing and sales teams answers to many questions. Improve your communication methods and find the best timing.
Reason 4. Qualifying business opportunities
Not each lead is worth pursuing. When the leads fail to fit a company’s ideal customer profile, they are low-quality and shouldn’t be pursued. An ICP makes it easier to identify leads that are the most promising. Exclude the leads with a less than 50% match from the sales pipeline. Don’t run ads and don’t chase after leads that are too far from your ideal customer profile.
Reason 5. Building customer lifetime loyalty
It’s no secret that generating new customers costs a B2B company more than maintaining current customers. That’s why increasing customer retention and loyalty is an essential part of marketing and sales activities. And a well-developed ICP is incredibly helpful in doing so. You’ve built a profile of ideal customer behavior, and now your teams tailor content to maximize customers’ value in the post-sale period.
Getting significant value from you, your loyal customers become brand ambassadors and refer more customers to use the product and services. Thus, profiles of ideal customer behavior build customer success, grow referrals, and bring down marketing costs.
Use an ICP together with historical deals data and AI-empowered prediction, and you’ll be able to accurately predict when you can upsell or cross-sell to your existing customers.
How to build an ideal customer profile ICP?
So, an ICP helps marketing professionals and salespeople generate better leads, select better accounts, facilitate lead research, and personalize outreach. Now, let’s review how to build a profile of ideal customer behavior step by step.
Step 1. One market segment – one ICP
The market segmentation is helpful because each segment is unique and requires a different proposal and approach.
If you build separate ideal customer profiles for various market segments, you pinpoint your target audiences' needs and pain points. Also, you can prioritize your lead generation efforts from the most profitable to the least profitable segments.
For example, after analyzing the market and developing an ICP for all the market segments, you can find out that enterprise companies bring you more revenue than service-based companies. It's rather evident that SaaS and service-based companies require different approaches because their reasons to buy your product are different, and they have different needs.
As we already mentioned, the one-size-fits-all approach isn’t effective for B2B lead generation. So the segmentation step is essential.
Step 2. Select top 10 customers with the most significant value from this segment
Keep in mind that your goal is not to get an average customer profile. That’s why there’s no sense in picking ten random customers and distilling their criteria to a common denominator.
You need to select the best customers who bring you the highest revenue, who you love to work with for some reason, or who have the shortest sales cycles.
If you don’t have ten best customers, list fewer. See how much value your current customers bring and single out the top 5 or 8 or 10 customers. The main point is to gather data and analyze the various attributes of these key customers.
Step 3. Research the key customers to find the common attributes
Gather all the data on the existing customers from all the sources available to you:
- CRM. Your Customer Relation Management software has firmographic data (location, revenue, number of sales to this customer, team size) and sub-industry data (for example, tools and software the company uses)
- Social media. Learn which social media platforms the company is active on and the communities and trade groups they contribute to. You’ll later use these communities for content distribution. If your existing customers are sharing content on websites, think about guest posting or other forms of collaboration.
- Google search. Search the Internet, any hard copy that you may have, any responses on the Internet. Internal and external, think of it like books in a library. You won't need all of the information, but it's all relevant in some fashion.
- Customer survey/interview. Make it easy for your customers to give feedback. Offer a discount or a free service upgrade for their answers.
Ask the customers about:
- their buying process,
- the key stakeholders in the company,
- how the product solves their pain points,
- where they heard about you,
- what they love the most about the product,
- what features they would like it to have,
- what social media they use the most,
- what experts they read or listen to,
- which blogs, industry publications, or influencers they follow.
Identify what they're measured on, what they care about, what they write about, articulate, and talk about.
Setting up customer interviews as a staple is a great practice, but for ICP creation, you don't need feedback from all your new customers. Just make sure you did your best to interview your key clients.
Step 4. Fill in the Best Customer template
Now you fill a spreadsheet with all the data you have gathered for the ten best customers.
Standard criteria include:
- firmographics and geography (location, branches, company size, size of relevant departments, etc.)
- business area (niche, sub-industry, distribution channels)
- financial data (i.e., budget, share in segment revenue, share in company’s revenue)
- challenges, objectives, and strategic goals
- elements of the decision-making process (decision-makers, obstacles, influencing factors), etc.
Non-standard criteria are up to you. For example, as a SaaS company, you can be interested in a martech stack and eternal expertise. If you want to have more enterprise clients, you can be interested in international branches and running paid acquisitions.
Step 5. Build your influence map
Once you’ve figured out segmentation and the key indicators that cause prospects to respond positively to your offer, you can start building your influence map. In Step 4, you have already learned the elements of the decision-making process, and now you need to analyze what strategy works best for the key customers.
There are two strategies. You can start from the outer ring of warm influencers, generally, people with whom you enjoy the conversation, and you'll be building rapport with them and getting intel on how they buy, who's involved, etc. You may or may not get that information, but you're starting to learn about the company by asking questions. It’ll also start giving you the confidence for going to decision-makers.
Another strategy is to start in the center of the ring, with a CEO or the board of directors, and go out. But some people find it more efficient to work their way in because they can namedrop and feel more comfortable.
Mapping all the participants in the sales process is highly useful because it gives you time to work out different negotiation scenarios, overcome obstacles, and eventually win a deal.
The influence map for each company includes not only actual decision-makers who approve the budget and sign the deal. Whereas startups and SMBs give easy access to decision-makers (CEOs & CIOs), larger companies usually negotiate through Champions (heads of sales, marketing directors, etc.), the people who are first to find products and vendors and who are interested in making a deal come through. Also, medium and larger businesses often have Influencers and Blockers engaged in decision-making. The former have the valuable opinion that the decision-makers might entertain while the latter might see a new solution as a danger to their position.
Step 6. Define ideal customer profile from the data you’ve collected
Once you’re through with data gathering and research, it’s time to create your ideal customer profile for the specific market segment. Combine the findings and distill them into a combination of data, features, and patterns about your key customers.
- Look through the spreadsheet you’ve created with the data on the ten best customers
- Group similar entries into the ICP entry points
- Write down repeated data points into a spreadsheet
- Use the ICP for marketing, prospecting, and sales purposes
How to use your ICP
Once you’ve created the perfect profile, here’s how you can use it to optimize marketing expenses and accelerate revenue.
- Targeted advertising. Big Data and AI enable marketers to specifically target people who match the criteria of customer personas you have defined for your profile blueprints. Slice and segment your audiences as finely as needed and show your ads on the sites they frequent. Use website traffic data to put up lead lists and get your sales teams prospecting with the highest-value leads.
- Content strategy. From targeted marketing campaigns to personalized email copy, improve the company’s content strategy with insights from your ICP. ICPs help marketers tailor all marketing materials to the pain points and needs of your profiles, catering to your real customers. Equipped with an ICP, they can take highly personalized content to the preferred communication channels of potential clients.
- Personalized selling. Digitalized selling is impossible without personalization these days. Although buyer personas are more helpful in personalizing lead nurturing emails and proposals, a developed profile will reveal the goals potential customers are trying to accomplish and the challenges they are struggling with. This information should inform sales tactics and behaviors.
- Lead scoring. Choose the right lead qualification criteria to evaluate the quality of the leads a marketing campaign has brought you. Run the best high-value leads against a checklist. Those who score higher are worthier of pursuing and nurturing. It will shorten your sales cycles. Furthermore, you can automate lead scoring by selecting a minimum revenue threshold or team size. This will free up more time for marketing and sales to pursue other leads.
- Pricing. Define your pricing relying on your profile blueprints. If you see that your ideal customers are staying with you for a long time, they can be comfortable with a long-term pricing model. If your ICP singles out startups and SMEs as your ideal customers, monthly-based prices might be more favorable to them.
Generate only high-quality leads with behavioral profiles
An ICP takes away the guesswork. Having drawn up profile blueprints, sales and marketing teams are no longer taking a wild guess which lead generation channel is the most effective, which lead qualification criterion is the right, and what content is the most engaging for each group of leads. Drawing on real customers’ data, an ideal customer profile focuses your team’s efforts on doing what’s best for the clients as much as your company.
Building your ICP takes time and effort, but we've experienced how effective and powerful this tool is in our line of work. As you have seen, profiling takes more than one step, but it never stops. The dynamic nature of data requires you to revisit your ICPs from time to time, and annual updates will make your ICPs more relevant, effective, and accurate.
We understand that making an effective ICP can be a difficult task for you, so book a call and the Belkins team will give you all the working techniques and help create the strong ICP.