Oftentimes, marketers forgo the idealistic for the realistic. We set achievable goals. We taper back expectations. Instead of shooting for the moon, we often shoot for the likelier, but still valuable, stars. This is often what makes marketers great: we know how to maximize wins and minimize losses.
Yet, there is a time when idealism can work for us. When developing a marketing program, consider building an ideal customer profile. An ideal customer profile is an exercise and tool in understanding your target audience and optimizing your marketing efforts.
What is an ideal customer profile?
An ideal customer profile (ICP) is a comprehensive account of your company’s perfect customer. Ideal customer profiles are crucial for account-based marketing (ABM) and targeting enterprise customers.
Ideal customer profiles are often used in B2B marketing. They allow marketers and stakeholders to understand the institutional needs of their target market. With an ICP, marketers can tailor programs to better meet these needs.
Why use an ideal customer profile?
If you ask any B2B marketer in the world, they could probably tell you it’s a company within a certain size range, located in a certain area in the world, who has a need for their product.
The problem? Some of these companies that fit this profile are ideal customers, and some are less-than-ideal. When you are budgeting your digital marketing efforts, you want to focus on the best match.
B2B marketers can use an ICP to understand the full customer journey and find a stronger product-customer fit.
What is an ideal customer?
Let’s say you have one extremely high-revenue customer. They are loyal and they pay you the equivalent of 50 smaller customers. Great, right?
But, they take up 80 percent of your server bandwidth. They have a half-dozen dedicated account managers. They need round-the-clock customer support.
Is this your ideal customer? Would you want to replicate this customer 100 times over? Or, is your ideal customer a bit more manageable, that would allow your company to scale and grow?
It can be easy to have dollar signs in your eyes when thinking about your ideal customer. In this case, it’s important not to equate the biggest invoice with the best value.
An ideal customer is one that is profitable, scalable, and a long-term fit for your business growth.
How do you create an ICP?
There are six steps to create an ideal customer profile.
Collect customer data
Start with what you already know. Consult data collected through your CRM, customer data platform and other analytics tools. This will begin to illustrate the quantitative trends in your target market.
You may want to use a spreadsheet or business intelligence (BI) solution to layer your customer data. This will allow you to identify trends and note your ‘best’ customers.
Identify ‘ideals’ in your customer data
When combing through your data, note some of the traits of your best customers. Those may be tied to revenue, customer acquisition cost, and/or sales cycle length.
Once you identify the categories, get specific. Is your highest-revenue customer $10,000/year or $100,000/year? Were they expensive to acquire? Did they have the longest or shortest sales cycle?
Answering these questions about customer engagement decisively will paint a picture not of a customer, but of the ideal customer.
Document customer traits & demographics
Identify the things that you can see about your ideal customer. These might be their:
- biggest decision-makers
- number of employees
- corporate structure
- annual revenue/share price (if applicable)
- board structure
Research the ‘unknowns’ about your ideal customer
You know how your customer interacts with your company. Yet, that’s one small piece of who they are.
Here are a few questions you can ask of your best customers when building an ideal customer profile:
- What was the pain point that led you to seek out our product?
- What are your company’s other pain points or immediate needs?
- Who at your company benefits most from using our product?
- What other B2B solutions does your company use?
- What is the outlook for your company and industry over the next few years?
Detail how your company helps your ideal customer.
So far, you have created a great ideal target account profile. How do you turn it into an ideal customer profile?
Document how your product serves your ideal customer. Your new understanding of their business should make this exercise clear. How does your product solve their pain points, and how will that continue into the future?
Document your findings in a customer profile.
Once you’ve completed your research, combine your findings into your final customer profile. It should paint a picture of the exact company you’d like to have using your product with great detail. This will guide your digital marketing and sales teams on whom to target.
Ideal customer profile vs. buyer persona
Modern marketing programs rely on buyer personas, or fictionalized versions of potential customers. If you are selling a manufacturing product, your buyer personas may be ‘Project Manager Pam,’ or ‘Budget Owner Bob.’
Buyer personas are useful when using buyer enablement marketing on a personal level. XYZ Manufacturing is not going to click on your LinkedIn ad or read your blog post, but Project Manager Pam might.
Ideal customer profiles zoom out from buyer personas. They are a holistic look at the entire firm, rather than the pain points of the individual decision maker. Ideal customer profiles and buyer personas are best used in concert with one another.
How can you use an ICP?
The modern B2B marketing and sales process relies on a true understanding of the target market. An ideal customer profile can influence these revenue programs in several ways:
Improving your account-based marketing
An ideal customer profile serves as a template for an account-based marketing (ABM) target account list, Your account-based marketers can use an ICP as a template for finding potential customers.
Improve MQLs & SQLs
Use your ideal customer profile to qualify leads. If a lead is less than 50 percent similar to your ideal customer, you can take them out of your funnel. You can also use a rubric to compare leads against your ICP. By doing this, you focus on moving along leads that have the potential to be your best customers.
Improve your product-market fit
Your ICP may have revealed that your ideal customer has needs that you are not meeting. This profile can identify gaps in your product-market fit. These gaps are opportunities to innovate your product. This can lead to better, longer-term customer relationships.
Creating an ideal customer profile can refresh your digital marketing and sales focus. By completing this exercise, you can renew your focus on bringing in the best customers for your company’s growth.