The right sales strategies are key to success in sales. You must start looking for the perfect customer, those most likely to purchase your solution. This is where the ideal customer profile (ICP) comes in. It is a quick guide to help you find your next lead generation technique.
What’s an Ideal Customer Profile
An ICP is a combination of firmographic and behavioral characteristics that defines the most valuable customers of an organization. It is possible to create a profile of the top accounts in an organization and then develop strategies that will convert them.
What Is the Difference Between ICP & Buyer Persona
Even though they are similar, the ideal customer profile and buyer personality are concepts that have different practical uses. These terms are similar in that they describe buyers identified through market research.
They also use data such as firmographics, customer lifetime values, decision-makers, customer feedback, and customer feedback to help them understand their customers. ICP and buyer persona are based on your market knowledge, product/service, and the problems it solves.
The following is the difference between the two concepts:
A buyer profile is a description of people who purchase from you. It includes information such as gender, age, and profession. To put it another way, a buyer persona is a list of characteristics you can use to help understand your customers and determine the best approach for each stage of the sales process.
Businesses can use an ideal client profile to filter their B2B lead-generation activities and target only the companies most likely to become customers. This is how you can get a full understanding of the relationship between these two concepts:
A customer profile is a guideline for which companies to target. A buyer persona will help you understand how to reach these customers.
How to Create an ICP
1. Locate the Data
Start by taking stock of your existing customer base and identifying common traits. Your team can make the ICP as specific or general as they need it to be. You should consider the following basic characteristics: company revenue, employee headcount (within an entire company or a specific department), industry, location, and job titles.
Export your CRM opportunity data and add account information as required. Next, add more relevant data points to your industry and activities. Look for patterns. Each business is different. It is possible to notice that the buyers are located in specific areas, an industry, or a particular buyer.
2. Find Your Top Customers
Don’t look at all of your customers when trying to identify your ideal customer. Focus on the best customers in your universe. Start by creating a list of your top customers (all stakeholders in the organization must agree to the criteria).
These are some of the most important points:
- Highest NPS (Net Promoter Score)
- The highest ACV or TCV (Annual contract value or Total contract value)
- The highest potential for growth
- Retention rates highest or longest-lasting with your company
- Highest Customer Health Score
Also, you should consider customer accounts that are the most profitable. After you have established your criteria, continue the exercise. Take the data and analyze it to find patterns or similarities.
Additional Customer Profile Considerations
These attributes may not be sufficient to create your ICP. However, we recommend going deeper.
Customer Value: Calculate the total CLV — The total net profit a company makes from any customer during a relationship. CLV is a tool that companies use to plan and forecast how much they will spend on customer acquisition.
Referrals Customers who are “best” may not have the highest CLV. Referrals are a great way to add value by referring satisfied customers. According to statistics, 84% of B2B decision-makers start their buying journey with a referral. Most marketing and sales professionals agree that referrals are more effective in closing deals.
Service/Product Use: Customers can use your product or services at a high frequency. To determine the marketability of specific functionality in your product, drill-down feature by feature if applicable.
Customer advocacy: The companies most open to public advocacy for your product/service may be your “best” customers. Participation in case studies, online reviews, and other activities are all possible.
Established Brands: Customers who have established brands give your company credibility and brand equity.
3. Find the Similarities
You may be able to see some patterns immediately. Some patterns may not be obvious at first glance.
These are some questions you can ask to get started.
- Are they located in the same area?
- Do all companies belong to the same company stage or are they different?
- Do they work in the same industry?
- How many employees are employed at these customers?
This is where the only limit is in terms of data granularity and segmentation tools. These characteristics form the basis of your ICP. Because it is based on the best customers, you know that it represents your future customers.
4. Prioritize and Implement
Based on your evaluation, create a best-fit rating that will help determine how an account matches your Ideal Customer Profile. This rating system can prioritize and align your strategies and resources and identify potential target companies and leads.
Here’s an example:
Best Match: US-based companies with more than 500 employees that produce and sell security software
A Good Fit: North American businesses with more than 200 employees that distribute security software
Not a good fit: Security software distribution and manufacturing companies outside North America with less than 100 employees
This helps you prioritize and qualify inbound leads so that you can decide how to follow up with them or if they are passed on to sales. This provides strategic direction to your account-based or outbound target lists.
If a company does not fit the ICP, likely, they are not a good match for your product. Don’t waste time prospecting in the vast ocean of possibilities.
The last piece of advice? Last piece of advice? Revisit your ICP data to assess fit ratings over time, say, once per year, and reassess resource allocations and strategies.
Your ideal customer profile should highlight all the strengths of your target audience. This profile helps you to generate quality leads and reach decision-makers at your target companies via the right platform, at the right time, and with the right message.
Market and customer behavior may change over time. You’ll need to update your ICP repeatedly to ensure your ideal client description remains relevant. Snov.io can help you if your ICP needs a set of reliable tools to generate leads and reach out to people.