Generating revenue is especially challenging during a global economic downturn, placing more pressure on sales reps to widen their pipelines and increase their efficiency. One of the most important tools that sales reps can use to achieve this is the Ideal Customer Profile (ICP).
Admittedly, ICPs are nothing new, but they are still highly effective for driving more sales, and in today’s difficult sales environment, they are more relevant than ever.
It does take time and effort to set up an ICP, which is why many are tempted to skip this stage, but they pay out dividends for your investment. An ICP is like the foundation of the sales process, supporting efficient sales cycles that bring in more revenue.
Read on to learn how to set up an ICP and apply it to your sales processes.
What is an ICP, and how is it different from a persona?
First, let’s define our terms. An ICP is best thought of as a goal-oriented representation of the company that is your ideal customer. It’s like an outline of the company that needs your solution most, stands to benefit from it most, is most likely to sign on with you, and is most likely to remain your customer the longest.
An ICP is similar to a buyer persona, but it’s not the same, and you can’t simply replace one with the other. An ICP is the company that you should target, while the buyer persona is the person that you’re selling to at that company.
An ICP includes consideration of factors like company size, tech maturity, location, growth rate, pain points, and more, while a buyer persona might include the person’s favorite hot drink, dress style, and demographic profile.
ICPs play a key role in B2B sales workflows
The truth is that sales reps don’t always enjoy the process of creating ICPs. They want to focus on smashing quotas and might view creating an ICP as a waste of time that could be spent selling.
But ICPs are vital for smooth sales processes, and they ultimately help boost sales deal volume and deal sizes. As detailed descriptions of the characteristics, traits, and attributes of a company’s ideal customers, ICPs help sales teams to:
- Identify qualified prospects, by reconciling enriched CRM entries with the attributes of an ICP
- Target and engage with their most valuable leads, adding focus to the process of lead scoring
- Select the best messaging for lead nurture messaging
All of these factors unite to ensure that lead generation teams attract interest from the right companies, and that sales reps direct their resources towards those leads most likely to convert, thereby boosting sales efficiency.
“Sales leaders must focus on the quality of sales and the quality of the buying process,” says Itay Sinuani, CEO and co-founder of Demoleap. “Companies must look for ways to help their teams focus on the right customers and efficiently remove unqualified leads from their leaky pipeline.” ICPs are a valuable tool for achieving this.
The best leads, after all, aren’t necessarily those that are most likely to convert – they’re the ones most likely to be happy and loyal post-conversion. In this sense, ICPs are particularly useful for lead-to-order (LTO) methodologies, since both are approaches that consider the broader customer lifecycle.
With LTO, sales leaders take a holistic view of customers in a scope that spans lead generation and nurture, sales processes, order management, and post-sales support.
ICPs help revenue leaders to optimize lead generation, lead qualification, and messaging efforts throughout the LTO lifecycle, so businesses can efficiently identify and engage with prospects who are more likely to become valuable customers.
1. Gather customer data
The first step is to collect data about your existing customer base. Dig deep into all your data repositories, including CRM software, historical sales records, and marketing analytics reports.
You want to create as full a picture as possible, so consider using Mention to include social media data that shows your best customers’ past interactions with your content. You can also map out their engagement with your company’s social presences, both before and after the initial sale.
The data you gather should be wide and varied, including the company’s geographic location, industry, budget, and size; their growth rate and business goals; their customer base; purchase history and buying cycles; who their decision-makers are and as much detail as possible about their buying process.
Seek out qualitative as well as quantitative data that reveals their pain points and how you resolved them.
2. Analyze customers
Once you have your data, your next task is to divide your existing customers into segments based on common characteristics. See if your best customers share the same company size, industry, or location, or cluster around a common set of pain points, similar target markets or buying processes.
Your aim is to identify patterns and common themes that can help you group similar customers together, so don’t limit yourself to the obvious. You might find that they all have Harvard-educated CEOs, for example, or that they all moved their headquarters from California to Delaware in the last five years.
“You want to be creative and approach this from different angles, even if some of them might not seem relevant or meaningful at first. The goal at this step of the process is to come up with an extensive list of attributes first,” says Chintan Zalani, a B2B thought leader.
3. Identify the best customer cohort
Next, it’s time to drill down into your segmented data to identify which grouping represents your best customer. These are your most valuable customer segments, and they are the ones you want to focus on.
“You know your solution works for that ideal customer, and that the ideal customer works well for you as a business – so yes, more of the same should suit you quite nicely,” explains Leah Messenger, content marketing manager at SimilarWeb.
Bear in mind, though, that “best” is a subjective term. It could mean the customers with the highest customer lifetime value, biggest profit margin, or top retention and renewal rates; the ones who are most likely to convert or most likely to recommend you to others; those who are the most satisfied or place the largest orders.
4. Conduct market research
So far, so good, but there’s still more to do. Your ICP needs to be fleshed out with market research that delivers insights into your industry and potential customer base, given your new focus on specific attributes. It’s important to look beyond your proprietary customer data to consider the broader landscape for your target audience.
Consult industry reports, surveys, competitor analysis, and statistical data to gain clarity about the pain points, needs, and preferences of your ideal customers. Even better, carry out your own research to discover industry trends and opportunities.
It’s also a good idea to interview some of your top customers to get a better understanding of what motivated them to buy from your company. Remember that other departments in your organization can have valuable insights into customer concerns and market forces, so collaborate with other stakeholders to encompass their points of view.
5. Refine your ICPs
Now’s the moment to bring together your market research and customer analysis into a single location. You’ve amassed an enormous amount of information that describes your ideal customer in great detail. While this is awesome, it’s just the raw material. Think of it as the clay out of which you will shape your finished and beautiful ICP.
At this point, you need to change your focus from casting a wide net to gather as much information as possible, to narrowing it down into a precise and easy to communicate ICP that everyone in your organization can use.
Be as specific as possible about the characteristics and attributes that define your ideal customers. Don’t aim for a long list – instead, try to be extremely concise and focus only on the most important factors. Your goal is clarity and precision so that everyone in the company can quickly grasp and remember the ICP, not to create a memory game.
6. Validate the ICP
The next step is to test and validate your ICP by applying it to your existing funnel and prospective leads. To do this, choose a small number of leads who fit the ICP you’ve created, and then engage them with marketing messaging, frequency, and nurture processes that match the results of your ICP.
As you do so, make sure to monitor engagement and response rates, conversion rates, customer satisfaction levels, and other sales and marketing metrics. Compare them to the results of previous campaigns that didn’t use your ICP, and look for emerging trends or changing patterns.
Hopefully, you’ll see an improvement over your previous marketing efforts. This indicates that your ICP aligns well with the reality of your company’s pipeline.However, if you don’t get the results you’d hoped for, it’s a sign that you may need to polish your ICP further.
You need to refine your messaging to better resonate with the ICP, or even go back to the drawing board and start again.
7. Document and share your ICP
Assuming that the previous step went well, you’ve now successfully created an effective ICP. Congratulations! But the work isn’t over yet. Your ICP isn’t going to be of any use unless everyone in your organization knows about it and applies it to their marketing and sales efforts.
That means creating a short, formal document that outlines your ICP. Make sure to include all the relevant details, such as demographics, pain points, goals, and preferred communication channels. When it’s complete, share your ICP document with all your marketing and sales teams, so that everyone is aligned.
Yael Davidowitz-Neu of Cyxtera Technologies recommends printing out posters of ICPs and personas, so you can hang them all around your office. “This helps internal folks to conceptualize a customer,” she says. “When they keep seeing it, it gets into their heads, so they know who they’re building for and who they’re selling to.”
8. Implement targeted marketing and sales strategies
After all the work you’ve put in to create and set up your ICP, it’s important to put it to good use. By now, everybody in your sales and marketing departments, if not your entire organization, should be intimately familiar with it. But more importantly, everyone needs to apply it.
Your marketing personnel should be using your ICP to tailor marketing campaigns, craft nurture messaging that resonates with customer needs and pain points, choose the most effective platforms for sharing content, and more.
Meanwhile, sales reps should apply your ICP to score and filter leads, identify which communication channels are best for reaching out to prospects, and refine their sales pitches and nurture conversations to match the ICP’s top concerns. With the ICP serving as the rallying point, sales and marketing efforts can be easily aligned to a focused strategy.
9. Review and update regularly
Like with many sales and marketing tasks, creating an ICP isn’t a once-and-done activity. Your ideal customers don’t remain static, so your profiles can’t either. Market dynamics change, businesses evolve over time, and pain points grow and shrink, all of which inevitably affect your ICP.
As a result, it’s vital to review and update your ICP at regular intervals, to ensure that it remains accurate and relevant. This usually means a quick review once a quarter or at least two times a year, plus a more extensive overhaul every year or two.
You might find that you have to completely redo your ICP every few years – it all depends on how fast your market changes and how quickly your customer base grows. The good news is that you’ll find it keeps getting easier to update or redo your ICP, because you’ll already have more experience with the process.
An ICP can be a valuable sales and marketing tool
With the help of an up to date ICP, your sales and marketing teams will be able to target their resources more effectively to drive more sales and boost revenue. The benefits far outweigh the time and energy required to build an ICP, making them an indispensable tool for every growth-oriented company.