May 21

Build Your Ideal Customer Profile

The goal of the Ideal Customer Profile is to maximize sales and marketing productivity.

The goal of the Ideal Customer Profile is to maximize sales and marketing productivity. You could be all things to all people. Or you could prioritize your lead generation efforts, given there is a ceiling to the sales and marketing resource you can allocate.

You are trying to identify the customer type where you have a unique RIGHT to win their business. You are looking for slam dunks.

This is not to the exclusion of other types of customers, who may very well become your customers even if they aren’t your ICP. But if you’re trying to get the most leverage out of your sales and marketing expenditure, focus on your ICP. You can try to trawl the ocean, or you can pick a specific place for easier fishing.

A brief activity to work on tightening your ICP:

1) Ideally with team members who are closest to the customers, make a list of customer attributes that you think make them particularly excited about your offering.

     a) Examples:

          I) They are usually in [specific vertical].

          II) Company size is usually [x number of employees]

          III) It’s great if they have [pain point].

     b) Check for duplicate attributes. For example, there are many ways to say “a large company” such as revenue greater than X, has a chief operating officer, etc.

2) Sort these attributes by Must Have and Nice to Have. Attributes that are negative (ex: “customer is not [specific vertical]”) become Deal Stoppers.

     a) During this activity, it may be that you have several types of customers. That’s fine. Label them Type 1, Type 2, etc.

3) Now score your customer Types on two dimensions: Revenue Potential, and Likelihood of Winning (“gettability” is the layman’s term here).

     a) People frequently fall into the trap of scoring only on revenue potential. Look out for this. You may be getting pulled into a crowded arena without consideration for your Likelihood of Winning.

     b) Likelihood of Winning speaks to your offerings' unique capabilities and features.

4) Prioritize your Types, and pick 2, maximum.

     a) Each Type should be described in less than a page. This can then be leveraged across your sales team, your marketing team, and your strategic partnerships team. Alignment feels good.

When should you revisit the ICP? The world is in a constant state of change: customer challenges change, your company’s offering changes (hopefully in relation to customer needs).

That being said, it’s probably a good annual activity, driven by the insights of teammates closest to the customers, and probably owned by a member of your sales team, since the whole point is to focus on fantastic leads.

Bonus: There’s the ICP of today, and the ICP of tomorrow. If there are customer profiles that are in the category of High Revenue Potential and Lower Likelihood to Win - what will it take to improve the latter score, and move this customer profile into the correct quadrant? This is good fodder for focusing your product team and your strategic partnership efforts.

Content heavily borrowed from Predictable Revenue. Read it!

Happy hunting.

This content does not constitute or form part of an offer of any investment advisory services of BuildGroup Management, LLC, nor does it constitute or form part of an offer to issue or sell, or of a solicitation of an offer to subscribe or buy, any securities or other financial instruments, nor does it constitute a financial promotion, investment advice or an inducement or incitement to participate in any product, offering or investment.