By Team Intricately · April, 26 2021 · 10 minute read
No matter how large or small your organization is, aligning sales and marketing teams on an outbound strategy can be challenging. The Ideal Customer Profile (ICP) lays the foundation for your go-to-market motions by identifying, sourcing, and prioritizing your best prospects.
An ideal customer profile (ICP) is a framework for defining the best possible customer for your business. It allows sales and marketing teams to zero in on companies that stand to gain the most from your product, solution, or service.
For sales and marketing efforts, an ICP is a detailed profile of those who buy the fastest, spend the most, are easiest to manage, and most likely to renew.
Traditional points within an ICP include:
Industry or vertical
Revenue and budget
Company size and customer base
Organizational (or technological) maturity
New investments and expansions
Here is the official title of this video.
What are the benefits of establishing an Ideal Customer Profile?
An ideal customer profile is critical to business success because it informs:
How you’ll allocate your marketing budget
How many sales reps to hire
How much revenue is available in your Total Addressable Market (TAM)
Additionally, an ICP will help avoid wasting time on poor-fit prospects who won’t convert and/or those who – even if they did buy – would likely churn out soon after implementation due to a misalignment between their goals and your solutions.
An effective ICP will:
Enable marketers to spend more efficiently on programs with the highest ROI, allowing highly targeted campaigns, landing pages, and messaging.
Provide clarity to sales, help identify where reps are needed – as well as how many – and focus their efforts on your total addressable market (TAM).
Enable sales and marketing alignment with data-driven definition that’s agreeable to both teams focusing on pipeline revenue.
Provide a focus for the organization. With a clearly defined ICP, everyone on your go-to-market team will be on the same page.
Your ICP is dynamic. Your ideal customer can and will change as you release new products, the market evolves, competitors pivot, and companies leave (or enter) your qualification standards.
A Sample Graphical ICP
Creating Your First Ideal Customer Profile: 5 Easy Steps
Identify which companies use your product – and why:
Too many companies rely only on firmographic data at this stage. While it’s a good place to start, identifying potential customers by size and location isn’t enough. The key is to talk about how current customers use your product. Consider questions like:
Who is your largest customer, and why do they use your product or service?
What solutions do you provide?
What solutions do you highlight in marketing campaigns and on your website?
Why do customers favor your product over your competitors’?
Why does one company spend more on your product than others?
Is there a use case that has superior margins for your company?
Identify your data sources:
In this step, you’ll evaluate the technical and firmographic data that make up the companies with a use case for your product. But don’t limit yourself to looking at customer data. Focus on the present and the future of your company. With new features and releases, your ICP will evolve.
By focusing on the makeup of companies with the use cases you identified in Step 1, you’ll advance how you think about your ICP.
For this stage, you’ll need data providers that are most relatable to your market. For cloud infrastructure and IT, that’s Intricately.
Create a preliminary ICP:
This is where your ICP becomes more actionable by supporting the identification of your total addressable market (TAM). By compiling company spending, growth, and product usage, you can get an up-to-date picture of not only the total market, but the most promising opportunities in your prospect list as well.
At a base level, pulling initial data will help verify you have a large enough TAM for sustainable revenue growth.
Evaluate customer data:
Evaluating the holistic, big picture of customer data hones the ICP instead of serving as the foundation for your ideal future customer. Better yet – it aligns what you’re doing now with what you’d like to do in the future based on your new ICP.
Finalize your ICP:
Once you’ve equipped your marketing and sales teams with analysis of current use cases, data surrounding your vertical and TAM, and customer data, you have everything needed to finalize your ICP!