What is an ideal customer profile (ICP)?
A fictitious customer that would greatly benefit from your product, but also provide you with immense value in return, a kind of a symbiotic relationship.
In B2B sales, the most important thing is that what you offered actually helped the other business, whether it was increasing their revenue or reducing expenses, saving time, relieving their pain points or ensuring other businesses that fit the ICP want to work with you in the future. And that plays into other types of value that you can get from your ICP apart from money – feedback, testimonials or referrals.
ICP goes into the specifics. Aspects to consider would be the industry, the number of employees, annual revenue, budget, geography, technology that they use, etc.
ICP is crucial for the success of your business. Although it could change over time, you should come up with one before starting any marketing and sales activities.
The better you target your ICP the higher your rate of conversions will be.
Ideal customer profile vs buyer persona for B2B startups
ICP and buyer personas aren’t the same thing. ICP is the business or organization that you are targeting, while buyer personas are the decision makers within that company.
In case you might have wondered if they were the same, now you know the difference. If you’re wondering whether you need both, the answer is yes. To reach the maximum effectiveness of your sales and marketing activities, it’s best to have both since they are so closely linked.
After coming up with your ICP, go into the specificities of your buyer persona. It should be someone who is most relevant in the purchasing process.
Keep in mind, though, that not all C- or VP people can gain value from what you are offering, make sure that you find the right person. Moreover, companies usually differ in organization, so a little research is necessary.
Buyer personas usually include job role, job title, tasks and responsibilities, pain points, etc.
Why should you build an ideal customer profile?
As previously said, you should come up with ICP before any sales and marketing activities since it makes many crucial activities easier: marketing & sales strategy, saving resources, customer retention and increase of lifetime value, and referrals.
Marketing and sales strategy
When you precisely target your ideal customer, it is easier to come up with messaging. You will know how to talk to your potential customers and how to address their pain points.
When marketing to them you will know what their motivations are, as well as what would trigger them to actually purchase your product.
When coming up with the strategy, you will also be able to understand, as previously said, how to sell to your prospect which will make for more accurate goal setting and predictions.
By setting your ICP as precise as it can be, you choose to focus your resources on companies that are more likely to convert to customers.
Your ICP also means that you know when to say “no” if a company isn’t a fit, which saves you time and money.
Customer retention and increase of lifetime value
ICP enables reducing churn rates. By looking at your ICP, you learn exactly how your onboarding process should look like, and you know exactly how to cater to your customers to meet their needs and expectations.
Considering that these customers will truly benefit from your product, they will become your brand advocates that do not shy away from recommending what your offer to other prospects.
Since they are already in your target industries, their referrals could prove valuable.
Steps to creating an ideal customer profile
1. Identify your best customers
The easiest way to go about creating your ICP is to identify and then analyze the best of your past and existing customer who were truly satisfied with your product.
Make sure that you select the best of the best customers. This means that you will be looking at companies who love-love-love your product and are actually getting more-than-average value from using your product.
If you miss any information that you need, reach out to them. Since they are really getting immense value from your product they will most likely be ready to share.
2. Interview your best customers
After preparing any firmographic questions that you might have for your most successful customers, set up an interview with them to learn about their pain points, how your solution solves them, how your product affects their short and long term goals, and their purchasing process.
If you have no idea what questions you could ask, we have prepared some in the section following this one.
3. Pinpoint ideal customer characteristics
Now, take what you know, take the info you got in the interviews and systemize it.
You now have to analyze all this information and look for common themes. What do your best customers have in common?
They could be companies of a similar size or they could have found your product and decided to buy it in the same way.
All this information is vital for coming up with your ideal customer profile so that you can precisely target prospects with the highest likeliness of converting.
4. Select the framework that works for you and fill it out
When your reach your conclusions, it’s time to put the info together in some sort of way.
It’s important to know that there is no one set framework for your ideal customer profile – you can search for templates online, make your own or use the one we prepared.
The majority of them are fairly similar, but if you feel like your vertical demands other fields – feel free to add and customize.
Once you complete your ICP, you will see that your sales and marketing processes instantly get easier. You have a much better idea of how to set up your processes.
However, remember that as time goes by, you will most likely have to adjust your ICP. It won’t stay the same forever.
Ideal customer profile questions
As was discussed in the previous section, you will have to interview your existing successful customers to get input that will help you with creating your ICP.
Apart from the “obvious” firmographic information, you should also learn about their pain points, where your solutions fits in and their buying process.
If you are unsure of which questions you should ask, we have prepared some for you.
Start with firmographics.
- What industry are they in?
- Where is the company located?
- How many employees does the company have?
- How many offices does the company have?
- What is the annual revenue of the company?
- What is the company’s budget?
- How long has the company been operating?
Learn about their pain points & how well your product or service solves them.
- What are their biggest pain points?
- What is the single biggest pain point that they need to solve as soon as possible?
- How do these issues affect their day-to-day activities?
- How do these issues affect reaching their short and long term goals?
- Does your product solve any of these problems?
- How does your product help relieve their pain points?
- What are the results of them using your product?
Next, learn about their buying process.
- How did they hear about your company?
- Why did they decide to buy your product?
- Who makes the decision to purchase?
- Do they need approval of someone higher up?
- How much did they research before purchasing?
- Where do they research before purchasing?
- Do they prefer referrals when making purchasing decisions?
- What was the biggest obstacles in their reaching the decision to purchase?
Ideal customer profile template
Hey, if you’re looking to save time, our ideal customer profile worksheet could come in handy.
You can use it completely like it is, or you can use it to inspire you – pick and choose the parts useful to you and then add your own.
Remember, there isn’t one correct form of ICP, you make your own.