Define Your Ideal Customer Profile to Improve Targeting
An ideal customer profile (ICP) is a simple but valuable concept that can be applied within a number of different b2b marketing and sales strategies to improve prospecting accuracy and conversion success. An ICP is the description of a company that would be the perfect fit for your solution(s) or service(s). In other words, it’s the hypothetical description of the company that would obtain the most value from your offering. It’s important to understand that the ICP only describes the characteristics of an optimal target account, rather than any individual prospect, buyer or end-user. After defining an ICP it then becomes relevant to determine the key target personas within the account to aim towards.
Short ICP definition: an ideal customer profile describes the type of company that would be a perfect fit for your solution or service.
To understand how to define your ICP, it’s necessary to observe the key quantifiable characteristics that are typically used when finding your ideal customer:
Employee headcount (company-wide and within key targeted departments).
The technology they use.
Size of the customer base.
Level of organisational maturity.
Level of technological maturity.
There are also qualitative factors that can be considered when looking at how to build your ICP, some of which are listed below:
What are their key business objectives?
What is their operating environment and infrastructure?
What is their sales cycle like?
What are their primary buying triggers?
Lookalike Account Factors
To further optimise ICP definition, it’s also crucial to take into consideration existing clients and to identify common threads between your most successful customers. This will be useful in understanding the recurring characteristics or patterns to look for in future target accounts. Some of the key metrics that can be considered from your client base are the following:
Most satisfied accounts.
Longest client lifespan accounts.
Most successful accounts.
Best to sell accounts.
What is the Value of ICP within B2B Marketing?
Implementing the concept of ideal customer profiles in the targeting criteria of both your marketing and sales team can help improve a number of significant metrics for either team. Due to the fact that ICP based target accounts only include companies that would highly benefit from your product or solution, it increases the overall lifetime value and customer retention rate. This is also caused by the number of evangelists championing your solution increasing due to the significant value employees will be getting from your solutions. Moreover, deal sizes and conversations will be higher and there will be less marketing scattering loss, as all leads that salespeople talk to will be relevant for your offerings.
The Role of ICP in Account-based Marketing
Account-based marketing is a strategy that directs marketing resources to engage a specific set of target accounts. Similarly to the idea of ICP, ABM is also about putting significantly more effort into being more valuable to your customers, and thus increasing revenues in return. Creating your ICP is the first part of any ABM strategy, to identify the key target accounts which will be focused on by your marketing and sales team. LinkedIn surveyed over 800 B2B marketers globally in 2020 and found that over half of them are using account-based marketing in their current operations and ITSMA (2020) found that 87% of marketers who measure ROI say ABM outperforms every other marketing investment. To ensure that your company reaps the benefits from the effectiveness of ABM, it’s thereby essential to have a strong ICP definition. Furthermore, both ABM and ICP are based upon a customer-centric approach, which leads to greater insights and understanding of what brings value to your client base. As a consequence, there is a high level of knowledge gathered over time about each account, enabling your company to optimise your ICP and ABM approach simultaneously and improving results exponentially in the long-term.