What is an Ideal Customer Profile (ICP)?
Think of your Ideal Customer as the customer type that – over a clearly-defined time frame – you will dedicate Sales and Marketing Resources to acquire.
It is NOT a “Persona” … just yet.
A “Persona” are the key decision makers inside your Ideal Customer Profile’s organisation, e.g. Marketing Manager, HR Manager.
Why You Need an Ideal Customer Profile
Have you ever been pondering which service, features or benefits to put on your website, and which to leave out because you couldn’t fit all of them?
The reason behind this is that if the sales funnel and messaging is focused around the product and not the ideal customer, then what’s then whose problem is it solving and what the significant difference between one feature and another?
If we want to grow your business and scale our lead generation, we need to know what we are looking for so we can recognize them when we see them. It helps us find out where to go look for more and how to attract them..
Customers generally leave for TWO reasons:
It could be that the customer goes out of business or they get acquired: death or marriage in industry speak.
They might have eliminated your service or product as part of a cost reduction and you service was not among the essentials.
Did not achieve the results they wanted
The other far more common reason for attrition is that your customer did not achieve their desired outcome or did not have a good experience of using your product.
In short, customers that achieve their desired outcome AND have a good experience using your service are far more likely to stay longer, spend more, and provide referrals.
How To Create Your Ideal Customer Profile
Step #1 – Name You Best Accounts Among Your Current Clients?
Sales, marketing, and customer service will each have their take on which are the best accounts, so bringing everyone together will provide the most holistic view on which accounts should be included in the honorable category of “Best Accounts”.
In the words of Jack Welch (Former CEO of GE) “I God We Trust … Everyone Else Bring Data”.
To avoid an exchange of personal opinions and fruitless hours of discussion, it helps bring data for everyone to get the “a-ha” experience of enlightenment by being presented for facts they never realized, which often sheds new light on what everyone previously have perceived as “good” customers.
A customer may bring in “good revenue” to the company on a single product, but require a tremendous level of service and pay late, which jacks-up the cost of customer maintenance and eats all the profit ….
Whoever notices the customer that buys 90% of the services you have to offer, handles everything in silence because the have an efficient running business. Service never hears from them and accounting never touches them because they are always on time.
So this is a chance to get a real perspective on which clients you want more of and which you want less of.
A few examples of elements to consider when evaluating your current customers
|ACCOUNT & FIRMOGRAPHIC DATA||Segment 1||Segment 2||Segment 3|
|How big is this problem for the company? (1 Low – 5 High)||2||3||4|
|What is their budget for this service category?||$15K||$45K||$50K|
|How many times a year do they buy||2||36||12|
|How large is each order||$1K||$500||$1.5K|
|How much is average discount on total sales?||15%||2%||5%|
|Are they buying all your services or just one?||1 / 10||9 / 10||4 / 10|
|How much service do they require (total service cost)? (1 Low – 5 High)||4||1||2|
|How long have they been a customer?||1.5||5||5|
|Niche in relevant industry||Small Bus. IT Service||Third party IT Service||IBM, HP, Etc.|
|Total head count||25||120||600|
|How many employees in related department||5||60||350|
|Number of locations||1||4||10|
Step #2 – If You Could Pick-And-Choose, Which Companies Would You Like As Customers?
Create a top 100 or 200 list of companies that fit you “Best Accounts” (Ideal Customer Profile).
You can brain storm and write down your “dream customers” in a spread sheet.
How to capture Firmographics
LinkedIn is a really great source when you want to look for businesses within an industry, geographical area, employee count, etc. The most easy and frictionless way is to sign up for LinkedIn Sales Navigator (paid service) which will allow you to search and export the companies you pick, into your CRM system or a spead sheet. It will have all the firmographic data you are looking for.
Using Google Search & Hubspot CRM
Another (free) great way to find your dream customers is using Google search e.g. “IT Service company, Altanta GA”, which will give you a list of “IT Service Companies” on a map. All you need to capture is the URL of the companies that you think might fit. Once you have the URL’s you can then create a free Hubspot CRM account. All you need to do now is create a “Company” by pasting the URL and Hubspot will provide you instantly with all the Firmographics you need.
You can also connect LinkedIn “Sales Navigator” and your Hubspot CRM and import them directly into Hubspot.
Step #3 – Profile of Ideal Customers
|Annual revenue||More than $50 mill|
|Growth||More than 5% YOY|
|Employees||More than 100|
|Geography||United States & Canada|
|Number of Locations||+2|
|Industry/Specialty||Third party IT service companies|
|Number of Business Units||+2|
|Staff in specific department||Marketing staff of 3 or more|
|Technology they use: ERP, CRM, etc.||CRM, ERP|
|Online Advertising Channels||SEO, SEM, Social Media Advertising|
You now have a clear list of the current customers that you want more of, a list of companies that you would love to have as customers.
Now it’s time to narrow down the profile for everyone to see and commit to.
Using the firmographics data you have on your existing customers: Total Revenue, Employees, Location, and more, you apply that filter to the company list you have collected from LinkedIn or Google and imported to Hubspot CRM.
Last step is to create a “list” in Hubspot where you “filter” the list for companies that match the “Ideal Customer” criteria.
Now you have it, the Ideal Customer List.
Step #4 – Description of Your Ideal Customer
What do you know about your ideal customer now?
The firmographics criteria is not enough, as they don’t include the specific information that you have on your current ideal customers.
So make a description that you can share between marketing, sales, and service.
Ideal Customer Profile:
A IT Service Company that offers support on OEM equipment (IBM, HP, etc.) with annual revenue of $100M and +60 support engineers, located in United States or Canada.