Define your ideal customer profile

Business Benefits

Sharpen and focus your sales and marketing efforts.

Prerequisites

  • Should know what you are trying to accomplish with your product or service.
  • Some data and analytics on customers

Who is this for?
Small to Large enterprises

Clarify what your ideal customer profile should accomplish to limit confusion with buyer personas and other profiles.

Great ICPs identify exactly who you look to sell to. The goal of creating ICPs is to identify the type of company that benefits the most from your product.

Unlike buyer personas, they focus on quantifiable, objective information to identify which customers your marketing and sales teams should target. ICPs are most frequently used in a B2B context, where they describe the tangible variables of buyers your business should target.

Identify the variables to include in your ideal customer profile. Consider options like company size, revenue, geographical location, industry or niche, objectives, and position in company.

For example, HubSpot’s ICP is a marketing professional at businesses that have between 10 and 1,000 employees. This individual often bases operations in the U.S. and has been expanding to Europe and Australia in recent years.

You can talk to your sales, customer success teams to idenetify commonalities between accounts, prioritizing clients based on ARR/CLV

Identify your top-performing customers by ROI,ARR or CLV and other secondary metrics.

If you don’t already have a clear idea of your best customers, these variables can help you identify them:

  • Most revenue generated through purchases or subscriptions over the past year
  • Most active in reaching out and building a business relationship with you
  • Cognizant of the effectiveness of your solutions
  • Clear ability to purchase your product
  • Growing and profitable companies with the potential to increase their business relationship with you

Create a spreadsheet with columns for Customer and each variable you identified earlier. Fill it with information about each of your top-performing customers.

If you can’t determine or reasonably guess quantifiable data, leave the cell blank. Consider asking your most high-value customers for information directly. This ensures a more relevant data set as you begin your analysis.

Remove any variables for which you don’t have enough reliable data.

For example, if revenue isn’t available for any or most of the customers listed, remove it from your sheet and ICP.

Analyze and average each remaining variable.

Best practices for common variables are:

  • Employee number and annual revenue: Use a range that removes any upper or lower outliers but includes most of the customers on the list.
  • Geography and physical location: Use a general geographic area, like a country or state, that includes most of the customers on the list.
  • Business industry and niche: Use the most frequently listed area.
  • Business objectives: List the 1-3 most commonly named objectives.
  • Decision-makers: List the 1-3 most commonly named position titles.

For example, an ICP based on these variables may look like:

  • Employee number: 5-25
  • Annual revenue: $2,000,000-$10,000,000
  • Business industry and niche: education, consulting
  • Business objectives: sustainable growth, CSR, innovation
  • Decision-makers: Chief Operating Officer, Director of Operations

Create a simple infographic of your ideal customer profile.

Visualizing your ICP profiles allows for easy sharing across departments, without any background research needed. Keep your graphics simple to allow for ease of comprehension. Include only the variables that are backed up by data.

This is a bit loose, some examples would be very helpful here.

Are we talking something like this where you can apply a logic?

Or something more basic that can also be a simple spreadsheet.

Is there a framework on how to get to this result on what the ICP should accomplish. I feel this step tells me more about what an ICP is and not necessarily how to start.

Am i comparing users based on what they spend? which features they use? level of engagement or something else?

Do I look at behaviour analytics, ecommerce metrics like lifetime value or average order value?

I would also address in the first steps some of these questions:

  • what is the minimum number of customers that you would need to identify the ICP
  • how / where to get the information about the clients

We look also at recent expansions and new hires - for example, if they’ve appointed a new VP, Director etc., and at the combination of pain points and length of the sales cycle. Some customers buy faster and take less effort to convince, because the problem is more urgent.

I’ve seen different approaches here. One angle could be to start with the ARR, shortlist your top x clients, and then look at what they have in common. The industry will probably be one commonality, then the pain points or goals, then the job title(s) of the decision maker(s).

The first touchpoint, news regarding new hires or expansion plans, news regarding M&As might be interesting to analyze as well.

Another angle could be to look at review websites like G2 or Capterra and observe the profiles of companies using competitor products.

You can achieve the same by looking at the logos featured on your competitors’ websites or reading their case studies/customer success stories. Very often, these will tell you what problems their clients were looking to solve.

I don’t know if there’s a specific number - it could be as little as 5-10 companies, if you’re able to validate your assumptions regarding their pain points, goals, job titles involved in the buying process, geos they serve, or touchpoints during the buying journey.

The goal of creating ICPs is to identify the type of company that benefits the most from your product. As mentioned above, you can also check review websites to see what types of customers your competitors are serving, or you can talk to your Sales org and Customer success org to identify commonalities between accounts. Ideally you’d talk directly to your best clients based on ARR/CLV.