Defining Your Ideal Client Profile

Defining your Ideal Customer Profile (or ICP) is one of the most important decisions an early stage company makes. You're not just defining who you want to sell to to. You're defining who you can and should sell to as well. 

Ultimately, you're narrowing the focus of every person in your company around one subset of potential customers. Too wide and you may miss the mark with messaging and utilizing marketing funds in the smartest way....but too narrow and you may be leaving money on the table and missing out on growth opportunities. So how do you get it right? Here is how to start shaping the outline of your ICP:

Do you already have customers? If so - start with your best customers that you would love to have more of - who are they & what makes them such a great fit? How did you find them? What are you solving for them? Why do you enjoy working with them? How much are they paying you? What hasn't gone well and how did you overcome it? 

You're basically looking at this group of "success stories" as a way to start shaping the demographic (if you're selling to individuals), or firmographic details (if you're selling to businesses) of your ICP.  

What sales outcomes can you learn from? What deals do you win? What deals have you lost, and why? What trends can you find in that data? You can help narrow your ICP by realizing, for example, that manufacturing companies have a specific need that doesn't align with your product. Or that leads from some geographical areas perform exceptionally well because of political leanings. Make this an ongoing exercise - even long after you've defined your ICP. You can't just look at a set of data and assume that will hold true in the future. Knowing your data and these trends can help you spot when things shift or behaviors change - so you can stay ahead of your sales & marketing strategy.

Once you've examined the above, you're going to outline your Ideal Customer Profile in as much detail as possible. Here are a few things you don't want to miss:

For B2B:

• Company Size (headcount, revenue, or other metric(s) you can easily measure for every company)
• Industry (Are there industries that are better than others? Some you don't sell to at all, ie. government?)
• Geography (What states/countries/regions/time zones are you targeting, and which ones are a no-go?)
• Compliance & Legal Considerations (Any government or legal restrictions, or areas where there might be a conflict of interest, etc.)
• Best Fit for Product/Service (Who can't your product/service solve for now or in the near future? Where do you shine?)
• Buyer Personas (Companies don't buy things, people at companies do. You need to know a lot about the people at each company that are most likely to help lead to a sale!)
  • Title, years of experience, general responsibilities, reporting structure, general role in the buying process, likely to care about most/least, issues most likely to encounter internally & externally, etc.

For B2C:

• Sex
• Age
• Location
• Income
• Ethnicity
• Employment Status
• Level of Education
• Marital Status
• Family Makeup
• Homeowner Status
• Sexual Orientation
• Religious Beliefs
• Clubs & Affiliations

Once you've outlined the framework, you're ready to move into psychographic profiling. And you're probably not going to find this next set of data in your CRM. Psychographics are taking what you already know about your ICP/Buyer Persona - and then telling the story of who they really are as people. This includes: 

• Personality, Opinions & Attitude
• Values & Belief Systems
• Lifestyle, Hobbies & Interests
• Communities & Connections (online & offline)
• Professional Initiatives & Interests 

The more you know about someone, the more you can think like them. The more in-tune you are with the way your prospects think, the more likely you are to succeed at selling to them. It's that simple. 

So you have all this data now. What do you do next? Creating & outlining your ICP is just the first step in this journey. I recommend taking your time and being thoughtful & diligent in your approach. You can't just change your ICP every time you gain a new learning. You will already have marketing campaigns rolling, engineering teams building, etc. towards your ICP, so any changes you make here should be necessary.

If you're an earlier stage company, don't be tempted to go too narrow on your first pass - so any changes you're making down the line are to narrow your ICP and not expand it or change it all together. It's easier and less expensive to move this direction, trust me! And you can always test outside your ICP without changing your ICP. In fact, you should continue to validate, test & iterate.....forever. That's the game!

Speaking tactically, I would recommend these steps following an ICP development exercise:

1. Assess TAM, or Total Addressable Market to validate your comfort level against some back of the napkin math for: how many companies are in that specific, narrowed ICP space? What percent of market share is reasonable to expect at different stages of the business? Based on reasonable assumptions for average contract/order value, what are low/mid/high projections for the next 3 years with this ICP? If everything checks out here, move to step 2. If not, go back to the drawing board to make adjustments until it does.

2. Put the ICP information together in a digestible format that can be used for training your team, referencing during the transition, and ensure that everyone is aligned & on the same page. Here are some example formats we've used  with clients.

2. Analyze your CRM/prospect data for coverage against your new ICP. Based on the companies and people you're targeting - what % do you have current contact information for? (Name, email, phone are baseline data for people,  company name & website are baseline for companies). You can periodically test the validity of your prospect email addresses via a service like Neverbounce to ensure you have up-to-date information. After assessing coverage, make a plan to acquire company/people data where you have gaps. This can be expensive, so if your budget doesn't allow for purchasing all of it, you can prioritize the most likely to close by doing an account or lead scoring exercise, or by using other data to help you narrow your list. 

3. Now that your updated ICP is locked in, the team is trained & you have your up-to-date data, you're ready to go get some new customers! I recommend crafting a slow-roll plan if you're making major changes to an already-existing ICP. This could include doing some targeted testing with smaller groups, adding new folks into the mix while pulling others out slowly, testing the talk track with some other team members, and measuring & validating before you proceed.

Once you've fully integrated your new ICP into marketing & sales, don't forget to measure often! And data doesn't always tell you early enough when something is off. Check in with the frontline teams in marketing & sales to get their sentiment as well. You'll likely be making little strategy adjustments based on learnings for weeks after an ICP change and that's all part of the process. Need a second set of eyes? Let's chat!