One challenge remains common for businesses of any size, sector, and location—building a successful sales strategy. If your sales team is struggling to connect with your customers, an ideal customer profile just might be the missing ingredient.
In this article, we’ll look at why having an ideal customer profile is crucial for businesses and how to build one for yours. But first…
What is an ideal customer profile?
An ideal customer profile (ICP) is a template of companies likely to benefit the most from your product and in turn, are also the most lucrative customer for your business.
A solid ICP is always backed up with accurate data and firmographics, such as:
- The company size
- Annual revenue
- Number of employees
- The industry company size
What’s the difference between ideal customer profiles and buyer personas?
While both ICPs and buyer personas help you understand your customers better, they are like different arrows in the sales teams’ arsenals.
An ideal customer profile for B2B businesses describes an imaginary company that would benefit the most from your product or service.
B2B buyer personas, on the other hand, are fictitious characters who represent the type of people who work at those targeted companies.
With that said, let’s talk about what makes ICPs so important for B2B businesses.
4 benefits of creating an ideal customer profile
In today’s post-pandemic era, sales teams need to adapt their strategies significantly. For example, the very first step of the sales outreach strategy at Spotted Media—which helped them gain their first set of customers before the website was ready—is to create an ideal customer profile.
ICP isn’t just a valuable tool for sales teams; it also provides your product team with useful insights to continuously test new and existing features.
On top of that, ideal customer profiles help you…
1. Speed up the sales cycle
In the latest LinkedIn State of Sales Report, 44% of the respondents said that their sales cycles have increased. This means the sales teams struggle with finding quality leads and reducing the sales cycle.
Creating an ideal customer profile can address this challenge. This is especially true today, where buying habits evolve quickly and customers make impulsive/faster buying decisions.
2. Personalize marketing
McKinsey found that the fastest-growing companies drive 40% more revenue by using personalization. With an ICP on deck, you can create relatable campaigns and connect with your customers.
3. Increase customer lifetime value (CLV)
Guido Bartolacci from New Breed explains how changing their ideal customer profile increased its deal size by 83% in just one year! Do you know what an increased deal size means? Yup… a higher lifetime value.
4. Help with Account-Based Marketing
70% of marketers used account-based marketing in 2021, which is an increase of 15% from 2020. And almost half of the survey respondents consider delivering a personalized customer experience to be their biggest challenge with ABM.
Based on this insight, many companies are now making ICP an integral part of their business strategy. Tracy Eiler, the CMO at InsideView, shares, “An important part of our strategy was building our ideal customer profile (ICP). These aren’t always the accounts you can sign the fastest—they’re the accounts most likely to stay with you the longest.”
How to create an ideal customer profile in 7 steps
Ideal customer profiles should be completed before the sales prospecting and lead qualification steps in the sales funnel.
Why might you ask? ICPs weed out irrelevant leads and help the sales personnel to focus on better prospects.
Luckily, building an ICP isn’t a complex process. The following seven steps will help you build an ICP tailored to your company.
- List down your best customers
- Analyze your customers
- Compile a list of the notable attributes
- Identify your customer’s challenges
- Mention your unique value proposition
- Document your ICP
- Review and revise
Before you start
As soon as you approach the task at hand, you may notice that there is something you’d really need to tap into to make your ideal customer profile exercise effective and useful.
Yep, that’s your contact database.
Surely, you’ve heard all sorts of telltales about how bad the quality of the data in any given database is, and while there’s definitely some truth to it, that doesn’t mean there’s nothing you can do about it.
We all know that data is fundamental in today’s world, and we all agree that you’d want to have as clean data as possible. That’s particularly true when building your ICP because bad data may mean going after the wrong kind of companies, and yes, it may cost you so much money.
Breadcrumbs Reveal is here to help. In just a few steps, you’ll have a complete view of your database health and what attributes and actions are the best revenue predictors.
To get started:
- Connect your data. Connect your lead and customer data with no-code connectors to popular tools such as HubSpot, Marketo, Salesforce, Mixpanel, Intercom, and more.
- Define Your Objective. Let us know what segment of contacts we should use to define success. i.e., all paying customers or paying customers on specific plans.
- Get Your Results. See which attributes are the best predictors of revenue today, while machine learning gets smarter over time as more data is introduced.
1. List down your best customers
Compile a list of your best current customers (at least 10) you’d want to target. Choose similar profiles of customers you’re already happy with. Or, go by the following criteria below:
- Largest accounts/most profitable deals
- Customers with the highest satisfaction levels
- Customers you’ve successfully upsold/cross-sold to
- Customers with most contract renewals
- Customers who’ve referred you to others the most
- Customers who’ve stayed with you the longest
It’s best if this information is data-backed from relevant sources. A few examples of such sources are:
- Insights from customer-facing employees, in-field sales team members, and other key decision-makers such as sales or marketing heads
- Data provided by your CRM system and customer support logs
- Industry-related reports that provide relevant benchmarks
- A tool like Breadcrumbs Reveal
2. Analyze your customers
Once you have your list of customers, you can figure out the ‘why’ and the ‘what’:
- Why are they your ideal customers?
- Why they’ve stayed with you for so long?
- What made them buy your product/service?
So how can you find these answers? Here are a few ways to go about it.
- Conduct interviews: Connect with your customers directly to get detailed answers to all the “why’s”. While face-to-face interviews are ideal, video or telephonic interviews are a good alternative.
- Collect customer feedback: Over 90% of companies use customer feedback via surveys.
Gather customer feedback through online surveys or feedback forms, like SurveyMonkey or Google Forms.
- Analyze indirect insights: Collect data from web analytics and social media to find potential customers similar to your current buyers.
- Use Breadcrumbs Reveal: connect your data to Breadcrumbs Reveal to analyze your marketing, sales, and product data and surface what makes a great customer to your business.
3. Compile a list of the notable attributes
So you have a good picture of your current best customers and what your ideal customer profile should look like. Your next step is to document their 5-10 main attributes, like:
- Organization revenue and size
- Growth rate
Add your findings to a template, and you’re good to go!
Protip: Identifying attributes can be a boring and time-consuming exercise, not to mention prone to human error if you have lots of data. We may be biased, but why not let AI-driven ICP analysis tools like Breadcrumbs Reveal do the heavy-lifting? Setup will take you a few minutes, and Reveal will analyze your data and tell you which attributes in your current customers are the best indicators of revenue.
Creating a basic ICP template with just the above three steps is possible. However, we suggest uncovering more insights by following the next three steps.
Let’s keep going, shall we?
4. Identify your customer’s challenges
Learning your customers’ behavior helps you discover new ways of serving them. Plus, it helps your sales team approach the right customer with targeted messaging.
This is exactly how Troops.ai increased their opportunity rate from less than 5% to 14%–they targeted the right people with specific messaging.
So how do you find your customer’s pain points, motivations, and expectations?
It’s simple—talk to them directly. Any customer retention strategy, like hosting a Zoom call or brand community, should do!
5. Mention your unique value proposition
Use this section in your ICP to outline your product or service’s unique selling proposition (USP). A USP differentiates your offering from your competitors and defines why customers should choose you.
A unique selling proposition also guides the efforts of your sales, marketing, and product teams:
- The sales team can focus on selling profile-specific features and benefits
- The marketing team can tailor the messaging to highlight the USP
- The product team can work on improving and differentiating your product from others
6. Document your ICP
In this step, all of your data and insights can come together and create an official ICP document. Finally!
So what does an ICP template look like? Let’s go through what we have seen so far. You should always include basic information about an ideal customer, such as:
- Firmographics (industry, geography, size, etc.)
- Behavioral insights (pain points, decision-making factors)
- Your core value proposition (why they should choose you)
Get started compiling your ICP by using the Breadcrumbs ICP Worksheet (with instructions!)–and remember to create as many forms as market segments you have. Pain points and value propositions may change depending on segments as well as how you market to each one of them.
7. Review and revise
Customer buying behavior doesn’t remain static, so your ideal customer profile shouldn’t either!
Every quarter, go through your ICP and update new information. Data-driven scoring like Breadcrumbs will help you update your ICP accurately.
Your brand new ideal customer profile is ready. Now what?
Now is the time to leverage your ideal customer profile and use it in ways that matter the most to your business.
This might be using the ICP as a benchmark for prospecting and scoring new leads. Or perhaps to discover new pain points. You may also want to use your ICP to reach new audiences with targeted and personalized ads.
Whatever the case, you’ll need some complex data to drive you in the right direction. Create a free Breadcrumbs Reveal account and learn how to get the most out of your ideal customer profile.