Before you start selling your products and services, it’s important to know who you’re selling to. Without that information, you’ll be fumbling around in the dark, wasting your efforts on leads that will never bite, while interested prospects fall by the wayside.
To help them figure out which leads to focus on and which to keep on the backburner, businesses have two primary tools: ideal customer profiles (ICPs) and buyer personas. Each of these is important but serves a slightly different function.
In this article, we’ll go over how to create an ICP that can make your sales cycle more efficient and effective.
What Is an Ideal Customer Profile?
An ideal customer profile (ICP) describes a theoretical organization that is a perfect (ideal) match for the products or services that your business offers. It’s particularly helpful when qualifying leads so that you can make sure you’re spending enough effort on high-probability leads, and not as much time on low-probability ones.
Unlike buyer personas, which are used more often by marketing to help make advertising and content initiatives more relevant to your target audience, an ICP is used by the sales department to figure out where they should focus their efforts.
Sometimes, there is crossover between ICPs and buyer personas, but they’re generally two distinct tools with different applications.
An ICP will typically take the following factors into account:
- Industry: Any business needs to know what industries it’s selling to. Without this, your efforts can easily be misdirected.
- Budget and Organization Size: Similar products always come in different price points, so your company needs to decide which budget segment you’re going after. For example, are you selling an expensive product aimed primarily at enterprises? Or is your solution a budget-friendly option for startups?
- Region: Companies often aim their products at a specific geographic region, i.e., Europe, North America, etc. Your ICP should include the target geographic market for your ideal customer.
- Legal Restrictions: Certain products have legal restrictions that limit your potential customer base. For example, tobacco, firearms, alcohol, etc., all have age restrictions. Some countries also ban certain technologies and social media platforms. By taking the law into account, you won’t waste time trying to sell to organizations that legally can’t buy from you.
- Limitations: Some companies may have service-level agreements (SLAs) that guarantee they will respond within a certain timeframe. Take this into account when developing your ICP so you can be sure to target companies for which you can meet the required response time.
How to Create an ICP for Your Sales Team
Now that you understand what an ICP is and how it can help your business, let’s take a look at what you’ll need to do to make one. The process can be divided into four steps:
Step 1: List Out Your Best Customers
Even though your ICP is going to be a fictional organization, it’s a good idea to take inspiration from the real world.
To do so, start by making a list of all your best customers. This will serve as the foundation for your ICP. Evaluating who your best customers are can be useful because sometimes businesses will realize they’ve been aiming at the entirely wrong market segment all along.
For example, an acoustic isolation company may be trying to sell primarily to music studios, but after listing out its best customers, it may realize that it’s actually luxury hotels and apartment developers that are its top customers. This could in turn help the business pivot its sales strategy.
Step 2: Find What Unites Them
Once you have a list of real-world ICPs, it’s time to try to find the common themes that tie them all together.
For example, you may find that your best customers all have fewer than 50 employees, are based in the Southeastern United States, and are involved in the hospitality industry. This is quite a lot to go off and can really help you hone in on your ICP.
Step 3: Pick Out the Most Important Unifying Factors
When you list out the common attributes between your best customers, it’s entirely possible that you’ll find commonalities that aren’t actually relevant.
For example, if you happen to find that all your top customers have CEOs named Dave, that may be interesting, but it doesn’t necessarily mean that you should start prioritizing companies run by Daves above all else – unless you can find some seriously convincing data that this is anything more than a coincidence, which is unlikely.
Your job at this stage is to pick out the most important shared attributes among your top customers. In this context, most important means the attributes that are most likely to make them convert.
For example, you may find that 90% of your top customers are from the same geographic region, but only 20% of your top customers are from the same industry. In that case, you should prioritize selling to people from that particular region over people from a specific industry.
Step 4: Write Out Your ICP
The fourth and final step in writing out your ICP is to codify it so that team members can become acquainted with it and leadership can reference back to it.
By this stage, you should already be pretty well-acquainted with your ICP, so this step is more about writing it down than continuing to think it through.
An ICP can help businesses tailor their sales processes and make them efficient. By strictly defining what a perfect customer looks like, businesses can better qualify leads and focus their effort on those that are most likely to convert.
Although ICPs are similar to buyer personas, they serve different purposes. A strong organization will typically have both buyer personas and ICPs that they can use in tandem.
No matter your current situation, having an ICP in hand is an important step to helping your sales team reach its full potential.