How to build an Ideal Customer Profile (ICP) and best examples
Knowing how to build an ideal customer profile is increasingly important in digital marketing, because an ICP helps you know where to focus your sales and marketing efforts.
Casting too wide a net can result in a diluted presence, while focusing too narrowly on only a few seemingly ideal customers may mean that you miss out on a larger market share. Knowing how to build an Ideal Customer Profile (ICPs) is one way to help identify your most profitable customer segments and those who are most likely to purchase from you.
In order to better plan for your GTM strategy, demand gen campaigns, or sales territory strategy, implementing an Ideal Customer Profile (ICP) is a critical first step. Knowing how to build an ICP will allow you to narrow your focus and reach your ideal customers in sales territories with the highest potential ROI. We provide some of the best examples of an ICP below.
How to develop an Ideal Customer Profile (ICP). Some of the examples are below.
In marketing, an Ideal Customer Profile (ICP) is a set of characteristics representing those most likely to buy from you; or most likely to buy from you quickly; or most likely to spend the most with you (e.g., highest ACV). The ICP will contain relevant firmographic and demographic information, and–ideally– information about the buyer’s needs and wants regarding your product or service.
The ICP can be used for any form of customer relationship management, whether it’s a retail store, a business-to-business organization, or a non-profit.
Once it is defined, you can customize products and marketing tactics to maximize the number of customers who fit the profile. By focusing on this subset of your potential customers, you will have more success in reaching them.
Developing Your Ideal Customer Profile (ICP)
Determining your Ideal Customer Profile begins with developing a list of key demographics. For companies building strategic sales or marketing plans, this is typically a list of potential customers segmented by a number of company characteristics (firmographics).
Ideal Customer Profile (ICP) best example based on a scatterplot– automatically generated in seconds by PatternAI machine learning.
When you see deal velocity vs. opportunity value, your “ideal” customers clearly stand out on the bottom right quadrant (green companies). Conversely, your non-ideal customers are in blue– slow and low spenders. PatternAI can even help you understand the characteristics of the companies in the green customer segment.
There are many, many firmographic characteristics of your ICP (e.g., % engineers of total employees), but if you start with the following 3, you’ll have a good foundation:
- Industry. What industry are they in, defined by NAICS code? (Manufacturing, Retail, Banking, etc.). You’ll want to use NAICS codes because these are standard codes that can be used when you purchase leads from a list provider
- Company Revenue. What is the size of their company? What is their revenue?
- Geography / Region. Where does the company mainly operate? You can look only at HQ / main office, or you can use the office of your primary buyer. Geos can be at any level: country, region, state, province, county, city, etc.
Ideal Customer Profile (ICP) best example, a customer matrix– automatically generated PatternAI machine learning in just seconds. In this example of an ICP you can clearly see 4 customers segments, and green stands out above the rest. You can even see the firmographic and demographic characteristics of the customers in the Ideal Customer Profile (ICP).
The customers in green above represent the best Ideal Customer Profile (ICP) example. These customers spend nearly $160K in ACV, while the non-ideal customers spend only $16K. Where would you focus? Ideal Customers.
Once you have this list of variables, you can develop your ICP by creating demographic profiles for each type of high-value personas in those companies. This may include title, department, rank, tenure, age, gender, family status, etc.
Like firmographics, the Persona characteristics can be numerous and detailed as well (e.g., tenure in role; highest university degree attained; geographic location / where they reside, etc.). A good starting point will be the following
- Title. The core starting point is the title of your buyer. With machine learning software like PatternAI, you can start to see clear patterns in your ICP titles. This is beyond pie charts and bar charts– patterns reveal what’s really happening, and who’s really buying.
- Rank. One fascinating feature of ML/AI with platforms like PatternAI is the ability to separate titles into rank. Many marketing and sales teams debate whether they should “go high” or “go low” in their GTM motions. With ML/AI, a machine like PatternAI can separate Rank from the job title and tell you the exact answer.
- Department. Every good marketing and sales team has a sense of which department they sell to, and they usually have data to back it up. But if you don’t think to ask about a department in an old tool like a pivot table, you may miss the answer. There are often hidden departments that can only be revealed when you look at the customer patterns and this is where ML/AI really becomes valuable.
Ideal Customer Profile (ICP) best example, based on Geographic characteristics, automatically generated by PatternAI machine learning algorithms in just seconds. Clearly your ideal customers reside in geos such as California and the Northeast, while the Midwest has fewer opportunities.
Multiple dimensions– the real unlock
Most GTM teams have good data to back up their GTM strategy. They’ll typically know which industries they sell to successfully. They’ll know if they sell to Marketing or IT. But current outdated tools like pivot tables and even Tableau, can’t really identify the ICP like machine learning can– they miss the hidden patterns.
The real unlock in knowing how to develop your ICP profile is to look at which Title, and which Rank, in which Department, in which Geography.
With this foundational ideal customer knowledge, you can begin to better analyze and implement a GTM strategy that will maximize the number of ideal customers you reach.
How your ICP drives your GTM strategy
A GTM plan is an overarching plan for your entire marketing & sales strategy. It tells you how to target the market precisely, in order to maximize customer engagement, drive conversion, and meet their needs, while also ensuring each salesperson has enough opportunities to make quota.
Territory planning, hiring strategy and more
In Sales, a solid ICP helps drive the sales territory plan because it gives you insight into which markets will be most receptive to your products or services. It can also help you define a hiring strategy that will maximize success– if you’re selling to large financial institutions with a big ticket ACV, you’ll likely want a seasoned field rep who can manage the complex sales cycle.
With this knowledge, you can draft your sales territory plan to assign each salesperson the most likely customers to purchase your product or service, which best fits the profile of an ideal customer.
Once you’ve got your ICP finalized and know where most of those contacts are located, sit down with your management team and your sales reps and draft a blueprint for your territory divisions.
Tailored messaging and outreach
Having a solid ICP will also help drive your Marketing messaging and your sales rep pitches and scripts. If you know how to develop your ICP and have good examples, you’ll have a very good foundation for your demand generation messaging and sales scripts.
This map should have the ideal customer profile at its core while considering other variables that may influence how you set up your territories. For example, if a particular company is worth more to the business than another company, it may get a larger share of the territory where it’s located.
From there, you can start training and hiring your sales reps, so they know their accounts and how they fit into the larger picture of your business. Or you can build your demand gen strategy properly– and continue to AB test based on your ICP. That way, when customers purchase from you, those who match your ideal customer profile will be routed to the best qualified reps, and the messaging will be spot on.
If you’d like a complimentary ideal customer profile (ICP) analysis created by PatternAI’s machine learning software, please contact us at firstname.lastname@example.org