Identifying your Ideal Customer Profile

It should come as no surprise to anyone even vaguely familiar with the world of commerce, or sales and marketing, that those who are aiming to trade their goods or services for money must understand exactly who they are trying to trade with.

In other words, the fundamental rule of sales and marketing is to know thy customer. Though we are continuously refining how to better capture and utilize this information, the concept is age old. The better you understand who is and wants to purchase your product or service, the better you will be at selling it to these people, and the better your business will do as a result.

In 2021 jargon, we call this identifying your ideal customer profile.

What is an Ideal Customer Profile?

From a business-to-business perspective (B2B), an Ideal Customer Profile (ICP) is the description of a company – not an individual – that has all the qualities that makes them the best fit for the solution that you provide.

You could define your ICP as those who will benefit the most from the product or service that you provide, or those who are most likely to buy and recommend your product or service. In the simplest terms, your ICP are those that want to buy what you are selling.

Some of the characteristics that you will use to define your ICP will be:

  • Industry
  • Annual revenue
  • Annual budget
  • Geography
  • Employee Headcount
  • Current tech stack
  • Level of organizational maturity
  • Size of their customer base

This is a non-exhaustive list but it should give you a general idea of the attribute categories that you should be paying attention to, and then use those as a starting point for further refinement of your ICP.

Considering those characteristics, some of the questions you will want to ask may include: what industry should we target and why? Do these companies make enough money to afford our offering? Are there countries that we don’t want to sell to? Is this company too big or too small for our offering? Etc.

Example of an ICP

Take for example a company that sells video production software. Their ICP may look something like this:

Our ideal clients are Video Production Companies in predominantly English speaking countries that have a production team of at least 10 people and have a budget of at least $1,000,000 per feature film or TV series.

You can see in this example that we’ve defined the industry, geography, team size, and budget for this particular ICP. This may be too broad or too narrow a profile for another business, but it works for this one. There is no cookie cutter solution or guaranteed formula for generating an ICP. It will vary for each business.

Why is an ICP important?

Having a clear and well-defined ICP is important because it gives direction to your sales and marketing teams.

It gives direction to your marketing team because they will know exactly who they are trying to connect with. Having an ICP will inform marketers where and how to speak to these prospective clients. It will allow them to be much more specific and accurate with how they spend their marketing budget, and it will also dictate how they develop their brand story and marketing messaging so that they can effectively and optimally communicate with these prospective buyers.

And this is all very important to sales teams by default. Sales people want to be served the best possible leads by their marketing teams so that they can efficiently close deals. Without an accurate ICP, your sales team will end up wasting their time dealing with sub-optimal leads and they won’t be able to hit their targets.

How Do You Identify an Ideal Customer Profile?

It should be noted at the outset that identifying an Ideal Customer Profile is different from defining a target market. When you are first starting a business, you may sketch out possible markets that you think may be best suited to buy your product or service. Defining an Ideal Customer Profile is easier once you are established as a business, but whether you are an established business or just getting started it is important to identify who you want to spend your time and dollars on.

If you have existing customers, there are a number of ways to leverage that customer base to better understand them and chisel out your ICP. Some examples include:

  • Surveys: Ask questions that uncover information about your customers’ characteristics, behaviours, preferences. The goal is to gather data that allows you to define your customers into separate buckets of identifiable, understandable, and actionable profiles
  • Customer Interviews: Schedule interviews with your most loyal and enthusiastic customers to learn more about who they are, and why they love your product or service. This is a two-stone approach, as you will intimately learn more about your customers, but also forge an even stronger bond with those who are already champions of your offering
  • Employee feedback: You already have a wealth of information at your fingertips if you have a customer support team or customer success team and a sales team. These are the front lines of your business, and they are interacting with the very people that you are trying to better understand every single day. These people know your customers better than anyone else. This is also a two-stones situation, because you can simultaneously show your employees another way in which they are valuable to you and your company, and also mine the gold that they have accumulated through many interactions with your customer base.

Conclusion

Identifying and defining your Ideal Customer Profile is a non-negotiable task for any aspiring successful business. In order to have the most efficient and effective sales and marketing team, and protect your business from lost time and money, you must understand exactly who wants to buy from you, and who you are trying to sell to. If you are not able to clearly articulate who your ideal customer is, your chances for success will be very limited.