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What Is an Ideal Customer Profile?

Ideal Customer Profile (ICP) describes someone who would benefit a lot from what you offer and provides you with significant value in exchange. ICP helps you with meaningful conversations and sharper campaigns.
8 Min Read

Table Of Contents

    In 2012, HubSpot was worth $52.5 million, had 8,440 customers and more than 429 employees on its rolls. Brian Halligan, the CEO of HubSpot was confused between serving two types of customers, it was a major overhaul of their strategies given that they were doing well for themselves. They decided to focus on just one ICP among the two- Mary Marketer or Owner Ollie.

    Mary Marketer- These are marketers within companies of 10 to 1000 employees.

    Owner Ollie- small business owners with less than 10 employees and no full-time marketer.

    After much deliberation, HubSpot decided to focus on just one ICP- Mary Marketer. This meant that everyone in the team will be focusing on one type. The content team would have to cater to just one type of user. The sales team could come up with strategies for just one type of user. The product team doesn’t have to add a lot of features to please different types of users.

    By focusing only on Mary Marketer, their team was able to align their strategy across the company. So HubSpot’s example of an ICP is “marketers within companies of 10 to 1000 employees” and the customer persona is “Mary Marketer.”

    What is Ideal Customer Profile?

    HubSpot says- ”The ideal buyer profile defines which companies are a good fit for your offering and which ones are not. If you are a B2B company, the definition should be at the company level, not the contact level.”

    In other words, in the B2C scene, an ICP is the description of someone who would benefit a lot from what you offer and would also be providing you with significant value in exchange.

    For a B2B startup, an ICP is a hypothetical business that would get the most out of the product sold by you.

    Benefits of Ideal Customer Profile:

    benefits of ideal customer profile by Delve AI

    The main objective of any company, B2B or B2C, is profit maximization. This means that businesses would be toiling to find techniques to increase their bottom line. Identifying your ICP is one such endeavor that will help increase the profits as well as provide many other benefits. Businesses that follow an account-based strategy will realize that it is a blessing.

    Helps in creation of target account list:

    ICP helps you identify the most valuable customers and prospects that have higher chances of converting. Its output is a list of customer and prospect characteristics that can be used on the accounts. Based on the characteristics, it is possible to narrow down accounts that are more likely to give you a win. Without ICP, businesses lack focus because there are too many types of accounts to cater to, so the targeting and campaigning isn’t sharp enough.

    Resource allocation:

    Once you know the accounts that you should target, the business can assign the resources like time, effort and money that will be invested in each of them. Without ICP, the strength of the campaigns will be diluted as there is no focus on a select set of accounts. With ICP, the right accounts which are more likely to convert will get a lot more attention.

    Creates alignment across departments:

    One of the best benefits of ICP is the creation of alignment across the entire organization- marketing, sales, development, customer service, strategy, etc. All of their focus will only be on the target accounts, most of whom have the same characteristics. It is easy to create a go-to market plan when the intent is similar and there is cohesiveness amongst the entire team. Usually, there is customer and contact data, CRM, and other quantitative data that is used, but with ICP, you will also be using qualitative results from different teams.

    Clearer communication:

    When you concentrate on one type of account, your communication to your customers gets streamlined. There will be no confusion. There will be no requirement to cater to a few more types of accounts. The focus is singular. The language is clear and incisive. More often than not, communication can seem lackadaisical because there are too many target audiences.

    Extended customer lifetime:

    When a business stops concentrating on not-so ideal customers, there is more time to build a better relationship with the existing customers. By creating your ICP, you will also be able to understand your customers better. It will help you customize your offerings to your customers which will foster trust. Customers who trust you will stay loyal and will spend more on your business.

    How to create an Ideal Customer Profile:

    how to create ideal customer profile by Delve AI

    Businesses that want to be data-driven should invariably use ICP. It helps you become a focused company. You should not only know who exactly is your perfect customer, but also know everything about them. ICP is found out using a bunch of data from your customers- demographic, psychographic, firmographic, and more. Having an Ideal Customer Profile will help you have meaningful conversation with your customers instead of shooting in the dark. You will be able to have meaningful conversations by leveraging ICP since you will know everything that you need to know about the customer. This makes targeting and streamlining all the other campaigns easy.

    #1 Define your ideal customer:

    Gather all the stakeholders together and ask them what they think an ideal customer would look like. Ensure that everyone from different departments are there to give their view of an ideal customer for the business. You will also have to consider data from different quarters so that you can make an informed decision.

    Data about your customers

    Someone who is already a paying customer can give you great insights about who would be your ideal customer. Collect data about them. You can either interview them, send them an email survey, arrange for focus group discussions, etc. In fact, make a list of your best clients and consider the below questions.

    1. How did they become your customer?
    2. Through which channel did they reach out to you?
    3. Write down a list of your most profitable accounts.
    4. Which are the clients who have been with you for the longest?
    5. Do the clients pay on time according to the contract?
    6. Is the client getting ROI from your product?

    Apart from these questions, collect information from your CRM tool, analytics tool, customer reviews, testimonials, social media chatter, etc.

    #2 Interview your customers:

    Reach out to the clients in person and conduct face-to-face interviews. Assuming that you are interviewing one of the decision makers, get to know more about them because they are your only (usually) connection to the company. Getting to know about them will help you tune your messaging accordingly.

    Collect company data during the in-person interview and find out the challenges they face. Will you be able to solve them better? Get to know how they make their purchasing decision. Understand why they chose you as a vendor. These insights will go a long way when you are drafting a sales strategy because these are solid points that you can communicate with prospective customers.

    Here are some of the questions that you can ask them:

    1. What was the type of research that went into choosing your business?
    2. How did they hear about us?
    3. How many people are involved in the approval process?
    4. What are the other vendors that they considered? Why did they reject them?
    5. Do they plan to use your product in the future?
    6. What are the major pain-points that you solved for your customers?
    7. What was the primary problem that they wanted you to solve?
    8. Does your customer make more money because of your product?
    9. Are they satisfied with your solution?
    10. What words do they use to describe your products or service?

    You can ask a hundred more questions to your customers. It will help you refine your ideal customer profile. There is no need to ask so many questions either. Vet the questions that you need to ask your customer by discussing with your team.

    #3 Characteristics of your ideal customers:

    Based on the information from the above questions, you will be able to get an idea of who your ideal customers are. The next step is to find out which are the common characteristics that make them a good fit. Compare different accounts and see what made them decide to choose you as a customer in the first place.

    Here are some of the factors that are most often found when deriving the ideal customer profile:

    1. Industries/Verticals
    2. Size of the company
    3. Geography
    4. Budget of the company
    5. Annual revenue
    6. Common pain-points
    7. Most important features

    #4 Create your Ideal Customer Profile:

    By taking care of the above steps, you would have narrowed down your best customers, written down their attributes, and have enough data about them. All of the above will tell you the common characteristics present amongst your finest customers. After taking in all of this, this is how a sample ICP will look like.

    • Industry: SaaS, Technology
    • Geography: U.S
    • Size: 80 employees
    • Funding: Series-A
    • Budget: $15,000/month
    • Decision-making factors: Look for vendors who have experience in the same niche, Referrals preferred
    • Decision makers: CEO, CMO
    • Pain points: Generating a sales lead funnel, Not able to convert leads
    • Objectives: Short term - More paying customers in this quarter, Long term - Raise the next series round

    You can also describe your Ideal Customer in a paragraph:

    “Our ideal client is a B2B SaaS company in the US with 50-100 employees, has secured at least series-A funding and has a budget of $15,000/month. The decision makers are CEO/CMO. They are looking to create a lead funnel and would like to convert more leads into customers and want more paying customers within 3 months.”

    Challenge with ICP:

    While there are immense benefits associated with creating an ICP, it does pose one challenge. Your ideal customer today might not be the same in another 4-5 months. The change could happen because of external factors like the economy and the state of the industry over which your business or your customers have no control over. Your customers expectations might also change and they might not be your ideal customer anymore.

    If there is a pivot in your business model, your ICP changes as well because your existing customers might not be a part of that bracket anymore. Even without any seemingly big change on the outside, we would still advise you to create an ICP every three months. Keep refining your ICP and you will certainly reap the rewards.

    If you think finding your ICP once is enough, then you will be in for a rude shock when things change, as it usually does. Now that we have established that ICP is dynamic, here are two kinds of inputs which you can use to refine it as much as possible. Here is how you can do it:

    1. Using this method, you find out your most valuable customers, write down their attributes and compare it with personas of other customers from different segments. You will get better ideas on refining your ICP using this data.
    2. In the next method, instead of looking at your customers, you can consider the customers of your closest competitors. Compare the attributes of your competitor’s customers with their other customers and find commonalities to refine your ICP again.

    Refining the ICP on a regular basis can be taxing for a business as it consumes hundreds of man-hours in a year. With our tool, your ICP will be updated on a regular basis as it automatically does both the above methods like clockwork.

    Conclusion:

    If you don’t invest in coming up with an ideal customer profile, then you will be knocking on the doors of a lot of businesses that don’t want your offerings. As we said earlier, creating one isn’t enough. Ensure that you keep updating it every 3-4 months. Your customer is everything for the existence of your business and not everyone is a customer, even if they might look like one. With ICP, you will be able to create a strategic sales and marketing process, build a content strategy, lead acquisition plan, and so on. Since your targeting is laser-focused, the output will also be better and it would be easy to close these leads as well.

    Keep refining your ICP so that the prospects you target are always on point. Do not stop with just newer prospects, look at your churned customers as well. If you see any changes in their characteristics and they fall into your ICP, then add them to your account list as well. When there is no ICP created for your business, your efforts will be moot because it doesn’t reach the right audience. Therefore, the effect is muted and you effectively lose a lot of time and money, which is precious in the business world.

    If you are looking for assistance with automatically creating and refining ICP for your business, then Delve AI can help using its Website Persona and Competitor Persona offerings. Please check these product pages for more information.

    Frequently Asked Questions (FAQs)

    What is an ideal customer profile?

    An ideal customer profile (ICP) outlines the attributes of prospects who would benefit from a business's offerings while offering substantial value in return. In B2B contexts, it focuses on company-level variables, while in B2C scenarios, it describes individuals who would fit well with the brand’s value proposition.

    Why do you need an ideal customer profile?

    An ideal customer profile is important because it allows you to direct your marketing efforts towards high-value customers, allocate resources where needed, improve communication and messaging, and enhance customer relationships, ultimately driving growth and boosting the customer lifetime value (CLV).

    What is the difference between an ideal customer profile and a buyer persona?

    An ideal customer profile represents buyers who would be a perfect match for a company’s products, services, and solutions. A buyer persona, on the other hand, describes the demographics, goals, motivations, and buying behaviors of prospects within the general target audience.

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