A concept also promoted by Aaron Ross in his book Predictable Revenue, the Ideal Customer Profile defines the act of creating a profile – based on the current portfolio – and limiting the type of customer the company wants to focus on. With this technique, it is possible to discover the right customer and accelerate the sales funnel .
Today, we are going to look a little at what ICP is, how it can help with company strategies and how we can set it up.
What is the difference between ICP, buyer persona and target audience?
First, it is important to keep in mind the difference between these different customer profiles and how they can help your company.
Target audience: Uses demographic, behavioral and socioeconomic france business email list information to define a niche to focus on. Usually has a more generic vision.
Ex.: Men and women, 25 to 35 years old, middle class.
Buyer Persona: This is a fictional character that the company creates to get a better understanding of the people who decide to make a purchase. It has psychological characteristics, main challenges and usually goes into more depth on the behavioral aspect.
Ex.: André, a sales manager for a technology company, has a college degree, is 30 years old, married with two children. His challenge is to reduce B2B prospecting costs and increase sales. He usually goes for walks in the park on Sundays and reads specialized websites and blogs in the area.
ICP: Describes the best customer. In other words, it is a profile drawn up to define which types of companies generate more revenue, require less pre-sales cost and are the model to be focused on.
Ex.: Companies in the information technology sector, in the southwest region, with more than 100 employees, who are engaged with the materials sent by the company, seek an assertive database and have an average ticket of 5,000 reais.
Be careful not to get confused, as these profiles are not necessarily separate. There may be, for example, several personas within a single ICP.
How can ICP influence your strategy?
By having the Ideal Consumer Profile outlined, you will be able to invest efforts in sales and marketing in a much more assertive way.
The ICP is usually engaged and perceives the value of the product more easily, generating revenue and greater lifetime value. Therefore, it shortens the sales cycle because it is more prepared and aware of its own needs and ends up reducing the CAC (Customer Acquisition Cost) .
Another issue that needs improvement is the lead qualification process, which becomes more agile and takes up less of the team's time and energy. In addition, targeting the ideal customer reduces lead losses during the process and makes your active prospecting more accurate.
One of the main benefits of your company having an ICP is that it ends up leveling out some strategic investments.
For example, if your company's marketing department creates a landing page with the aim of generating qualified leads, it will be more beneficial to create the fields based on the ideal customer profile. This will save your SDR (Sales Development Representative) time when filtering.
In another situation, imagine that your company wants to prospect in another state and needs a face-to-face meeting. Is the average ticket price for your prospect higher than the airfare and accommodation you will need to invest in for a visit from your sales representatives?
Therefore, having a detailed model of the type of company to be prospected is essential to also maintain financial control of prospecting and pre-sales costs.
How to define your ICP?
To develop your Ideal Customer Profile, you must take a few small steps:
1. Map your current customers
In the first step, you must map out the types of companies and segments that tend to generate more revenue and acquire your product more easily.
Analyze your customer base and choose 5 customers who are not in default and tend to considerably increase your company's revenue.
To start mapping, you can use questions like:
In which segments do these companies operate most?
What product/service did they purchase?
How much do they usually invest in my solution?
What is the size?
In which regions does my company operate most strongly?
What is the Lifetime Value of our customers?
What types of customers does my team best serve?
This way, you can now define the main elements that make a company ideal for becoming your client.
2. Identify patterns
When analyzing your current customers, it is normal for common characteristics to emerge among companies that are ideal for your business.
It's time to ask yourself what these customers value most about your company and what they have in common regarding:
Sector of activity
Port
Team size
Location
Average Ticket
Lifetime Value
So, you now have an idea of the characteristics that your ICP should have and move on to the final step.
3. Build your ICP
In the last step, all you have to do is draft a first ICP model and show it to your sales team. The opinion of each salesperson counts a lot when it comes to outlining the profile of who they will contact.
Based on the information and your business, you should align your model and put it into practice. With your ICP ready, it is time to focus your efforts and investments on segmenting and prospecting companies that fit the defined profile.
Don't forget to monitor the metrics to make sure the ICP really falls within the defined characteristics.
Finally, defining a guideline like the ICP can generate more opportunities and leverage results in a surprising way.