How to Create an Ideal Customer Profile

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What is an Ideal Customer Profile (ICP)?

Describing an ideal customer profile is like painting a picture of what you’d like your perfect customer to look like. You want to paint as rich and detailed a picture as possible. 

Learn how to blitz your first meeting with your customer here. 

Your perfect customer will need to adhere to a set of criteria that are the perfect fit for your product and your capabilities. Those criteria can include things like company size, revenue, employees, number of a certain type of employee that can use your product, geographical location, industry type etc.

It’s all about the “fit”

When defining your ICP, it’s equally important to know your capabilities such as your product strengths and weaknesses, organisational capability etc. You need to be able to match your capabilities to the customer criteria. This is because your ideal customer is a customer that can be acquired and retained profitably over a reasonable* period of time.

Developing an ICP will help later with asking the right qualifying questions 

For example, a Fortune 500 company might look like an ideal company to target. But if there are gaps in your capability then it may not be realistic to win their business at this stage. If you are lucky enough to contract a “whale” you might also find that they destroy your profitability if you are not quite ready to play in the big league.

How is the concept of “ICP” different to a Buyer Persona?

ICP is all about the attributes of the organisation that you are targeting. Whereas a buyer persona is all about the real human beings that work in the organization. Buyer personas need to be built out for the different types of people that can influence and ultimately determine the buying decision in your favour or against you.


Why is it important to define your Ideal Customer Profile?

You need to keep this question top of mind when putting your ICP to use. 

It’s one thing to go through the motions of describing your ideal customer – and I’ll show you how you can write a perfectly good ICP in less than 10 minutes.

It’s entirely next level up in executive skill and discipline to actively use your ICP to make decisions that impact your investment of sales and marketing resources and time.

Your ICP should be your “north star” that helps you make trade-offs.

For example, if you have decided that your ICP = “manufacturing firms based in the MidWest, turning over $100m-$500m in revenue p.a”, then you want most, if not all of your available sales and marketing resources targeted at this ICP. OK, so what do you do in these two scenarios:

  1. Your digital marketing manager tells you that your competitors are spending up big on AdWords on the East Coast and they are building market share there
  2. You receive an RFP from a UK based company that turns over $1Billion annually. They would be a terrific brand name to add to your logo board and reference list

Your ICP should make resource allocation decisions clearer and easier to make. In the examples above, you should be looking at

  1. Ignore the East coast market and double down on your AdWords spend in the Midwest
  2. Writing a polite email to the UK company (cc in all relevant contacts) advising that for various reasons you are not able to respond on this occasion. Use the opportunity to position your company clearly. You never know where the recipients will be working in the future – they might just remember your bold and unusual stance.

Of course, back in the real world, things are not always as clear cut. For example, the east coast is not part of your ICP criteria because you don’t have a services team that can do fulfilment in that region. Nonetheless, there might be ways in which you can do business in the East – you just place a much lower investment on actively chasing business in the region.

Likewise, there might be a case for winning your first UK based company because of the size. The key takeaway here is that your ICP should guide your decision making and you should have very good reasons for compromising the criteria. As opposed to “going with the flow” on every sales and marketing opportunity that arises on any given day.


Seven questions to define an Ideal Customer Profile

If you have worked in your business for a while, you should be able to punch out the answers to these questions pretty quickly. If a question doesn’t feel like it is relevant to your business, just ignore it.

Q1 What industry or industries?

Try to be specific. For example, instead of “Banking”, “Retail Banks” might be a better description.

Q2 Where are the organizational buyers located?

Think about how the customer is likely to buy your product or service. Do they have a foreign parent company that might overrule local purchasing decisions?

Q3. How big (or how small) does the company need to be?

Think through the best criteria for an ideal customer. Is it the number of employees, the number of staff in a particular role or department or the number of staff located in your ideal geographic location? Revenue is also a good measure of company size.

Q3 What are their internal ways of doing business?

For example, the types of IT systems they use might be very important to a vendor of complementary software tools. Maybe you do business best with companies that have highly decentralized business units.

Q4 Who is their incumbent supplier?

This is a relevant criteria if your sales plan is to win market share of key incumbents. Or maybe customers using certain incumbents represent ideal targets because these incumbents are legacy players and ‘ripe’ to be displaced.

Q5. What is their business outlook?

Are you best positioned to serve fast-growth companies or are you looking for companies that are suffering ‘life threatening’ challenges to their business?

Q6. What is their business culture?

This might seem like an odd criteria. But remember that people like to buy from “people we like”. You also want to do business with people that you want to work with long term. So, looking for alignment in shared values and behaviours might be important criteria. 

Q7. What is their appetite for innovation?

Similar to Q6 but more specifically, do you want to sell to companies that have a track record of being early adopters or are they more laggards? Naturally, this will be an important factor for companies looking to introduce new products to the market.

You will note that some of these criteria feel like “buyer persona type” attributes. 

For example, you might have a buyer persona called “Early Adopter Erin” where “Erin” is someone in the finance team who has an appetite for new technology and therefore will be receptive to a pitch from a new SaaS Payroll vendor.

In this case, I would expect that you would want the criteria “has a track record of trying new technology” to be listed in your ICP criteria. 

This overlap is fine for the simple reason that a “company” is the sum total of the people who work for it. In the above example, you want to target companies that have a track record of implementing new technologies. This would rule out companies that are wedded to legacy systems. Once you have connected with your “ideal company” you want to be on the lookout for the Erin types to join the buying process.

An Example ICP – SalesGRID

Here’s what our ICP looks like. As you can see it’s not extremely detailed. It’s a simple list of criteria to keep us grounded and focused on our “north star”

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