Imagine there’s a file that was worked on by every founding member, considered the Holy Grail of your internal Google Drive, used by every team, and forever in edit mode, now guess the file, if you didn’t guess ‘ICP document’, then this blog is definitely for you.
(If you did guess it right, you should still read this because, who doesn’t like to learn something new everyday?)
Who is an ICP?
An Ideal Customer Profile(ICP) is a description of the type of company that is most likely to benefit from your product or service, and who is also most likely to be willing to pay for it.
Why do you need an ICP?
A well-defined ICP paves the way for sustained growth would be an understatement.
In simple terms,
- It helps all your teams be laser focussed in their approaches
- It gives you clarity on your Total Addressable Market(TAM) and Serviceable Available Market(SAM)
- Get your sales, service and executive team to work on highest-value accounts and helps with target account creation.
How to use your ICP document
Using the ICP document should be a keystone habit at work for all the relevant teams.
A well-defined ICP can be used by,
- The product team to plan roadmaps addressing the precise pain points of the ICP
- The marketing team to prove targeting for campaigns with the right messaging and also get increased ROI
- The SDR/BDR teams to connect and qualify leads better with prospects from the first call
- The sales teams can improve their sales pitch and close bigger deals because they’d be selling to companies that are a good fit for the product and that have the budget to buy it.
How to structure your ICP document
An ICP document should have the following:
- Organisational ICP: Where we define the firmographics of the organisation including details like size, industry, location, and revenue.
- Your Ideal Buyer: Where we create a fictitious version of who an ideal buyer is, what they care about, their challenges, how they spend their time on a work day etc.
- Your Ideal User: Where we define a similar profile as the buyer but with more focus on their work challenges
- Ideal Influencers & Champions: Where we define who would be influencing the buying decision and who can be the internal champion
For a well-rounded look at what an ideal organisation who could purchase and use your product, the following has to be defined clearly:
1. The size of the organisation and the size of the team that will be using your product or service. This will help you define a clear and tangible ROI for your product. The price of your product and the duration of the sales cycle should be taken into consideration. For example, if you sell a premium software solution or an implementation heavy product, you may want to target larger companies with more resources and sales cycles tend to be longer. On the other hand, if you sell a more affordable solution, you can consider SMBs.
Employee size: 1000 - 4999, 5000 - 10,000 & 10,000+
Employees working in Engineering & IT business functions > 20% of the company.
2. The primary industry to focus your marketing and sales efforts: If your product or service is applicable for several industries, the following should be considered while defining which ones will serve as your primary industries:
- The size of the market: The size of the market will also play a role in determining the industry you target. If you are targeting a large market, you will have a larger potential customer base. However, if you are targeting a small market, you may be able to achieve a higher market share.
- The growth potential: The growth potential of the industry will also affect your decision. If you are targeting an industry that is growing rapidly, there will be more opportunities in the future.
- The competition: The level of competition in the industry will also be a factor to consider. If you are targeting an industry that is highly competitive, you will need to have a strong product or service early on to get prospects to switch from competitors.
Tier 1: Financial Services, Insurance, Banking, Hospital and Healthcare
Tier 2: Internet, Information Technology & Consulting and Software development
Tier 3: Energy, Retail, E-commerce and Hospitality
3. The primary region. This is extremely important to account for as you would have to shift your marketing strategy to work for that region specifically. Different regions can respond differently to the same messaging due to cultural and workplace changes. For example, if you’re going to focus on North America, language, tone of voice has to be catered to their taste so all customer facing collaterals would have to be tailored to them.
P0 : US, UK, Canada & Australia
P1 : Germany, Netherlands, NORDICS, Singapore & South korea
P2 : India, Philippines, Brazil & Argentina.
4. The organisation’s tech stack.This is an interesting aspect to account for while defining key accounts, where you can segment accounts on the basis of the current tools an organisation uses. For example, if your product works closely with a CRM, then approaching accounts that currently have Hubspot CRM or Salesforce CRM.
For a company that is into customer data loss prevention on communication channels, it would make sense to target companies that use Zendesk, Freshdesk, Salesforce, Zoho desk, ServiceNow, etc..
Your Ideal Buyer
The rule of thumb while drafting your buyer persona is to be detailed and capture the challenges and motivations of these decision makers.
You can get started by speaking to at least 50 individuals, across countries, from relevant teams to understand who they are and then analyse the data to find visible patterns. You can bring all these patterns together to create personas that will act as proxies to develop the targeted campaigns and key account lists.
Don't just say that your ideal customer is a "senior marketing manager." Instead, say that your ideal customer is a "senior marketing manager at a mid-sized tech company in the San Francisco Bay Area.”
Here are a list of fields to capture in your buyer persona:
- Age group
- Size of their organisation
- Who they interact with the most/Which teams they collaborate with the most
- Ambition level
- Types of tools they use everyday
- Do they actively look for tools to make their jobs easier?
- Social Activity level
- If they’re professionally active in communities, forums, events etc?
- How do they stay updated professionally?
Your ideal buyer is constantly changing, so you need to update your buyer persona regularly. This ensures that your marketing and sales efforts are always targeted at the right people.
*JTBD here refers to the actual day-to-day tasks and the needs and challenges that arise from it
Your Ideal User
Frequently, user personas aren’t included in ICP documents but having a highly-specific user persona as part of it keeps teams, like marketing and sales, regularly reminded of the actual users of the product since the decision makers are not always ones using it everyday.
The same fields as buyer persona would be applicable here but special focus on:
- The challenges and frustrations of everyday tasks
- Specific pain points they could be facing with your competitor tools or pain points arising from having no tool to fix the same problem that product or service will fix.
Your Ideal Influencers & Champions
Once you’ve identified who the decision makers/buyers are, you can find the roles who would become the influencers of this buying decision.
Champions are people who can be advocates for your product internally. They’re frequently much closer to the users of the product than the buyers.
You can define influencers and champions with the same depth as buyers.
However, when it comes to influencers, it is helpful to map out what their concerns with this product or service might be so SDR and sales teams can be prepared for their interference in the later stages of the sales cycle or on demo calls. This is why influencers must also be part of the ICP document.
For example, for a marketing automation product, the Head of Marketing could be the buyer and the Director of Marketing Ops could be an influencer.
It could look something like this:
The Four Sins of Defining ICP
- Defining your ICP too narrowly or broadly: If you define your ICP too narrowly, you may miss out on potential customers. It's important to define your ICP broadly enough to capture a large enough market especially in early stages of acquiring customers. If you define your ICP too broadly, you may waste your time and resources marketing to people who are not a good fit for your product or service.
- Assumptions without data: Relying on assumptions or gut feelings about your target audience can lead to a skewed ICP. Always base your ICP on real data and insights from customer research, market analysis, and user feedback.
- Not being specific enough. When defining your ICP, it's important to be as specific as possible. This means defining your ICP in terms of demographics, psychographics, and behaviour. The more specific you are, the better you'll be able to target your marketing and sales efforts.
- Ignoring competitor analysis: Analysing your competitors' customer base can provide valuable insights into potential gaps in the market, the industries they currently sell to and even their messaging and positioning. Learn from their successes and mistakes to refine your ICP.
How to maintain your ICP
The final part is to how to maintain your ICP document such that it does not lose its value over time.
Here are the most important ways to maintain it:
- Collect Customer Feedback: Continuously gather feedback from your existing customers. Conduct surveys, interviews, or use customer support interactions to understand their pain points, needs, and expectations. Incorporate this feedback into your ICP to refine your understanding of your target audience.
- Involve Cross-Functional Teams: Collaborate with marketing, sales, product, and customer support teams to gather insights into customer behaviour and preferences. Each team brings unique perspectives that contribute to a comprehensive ICP.
- Identify Emerging Customer Segments: Keep an eye out for new customer segments that may emerge over time. As your business expands and evolves, new market niches may become apparent, requiring updates to your ICP.