Every business wants to grow, both in size and revenue. However, if the appropriate processes are not put in place, your company risks losing potential customers and deals.
Studies show that a company’s sales team can spend up to 50% of their working time on unproductive prospecting.
Due to this, resources will be wasted because your business will be marketing to anyone without much consideration – it hasn’t defined its ideal customer profiles.
In this article, we’ll help you understand the concept of ICP and provide a step-by-step guide on how to create a data-driven ideal customer profile (ICP).
What is an Ideal Customer Profile (ICP)?
An ideal customer profile is generally an outline of your best customer – those that your business wants. ICP analyzes a customer’s behavioral characteristics in order to define a company’s most valuable customers.
Some of the information you might want to know about your ideal customers include:
- Location
- Motivations or goals
- Age
- Job title
- Income
- Hobbies
- Purchasing habits
This information, and more, can help your business find new leads much faster than you could imagine. The data can be pure gold to your sales team because it lets them know the people who want to buy your products and services.
Once you have defined your ideal customer, you can channel your company’s efforts into connecting with them and meeting their needs. Here is an ideal customer profile example.
Why Is Your ICP So Important?
Most people who want to increase their product sales build sales funnels by creating landing pages and ads that contain sales information. The sales copy does not focus on any particular customer; rather, it’s what the business thinks customers may want to know.
Imagine starting a business without any strategic plan – how does that sound? At first, everything might seem okay, but you’ll likely run into problems when your new and even regular customers stop coming. Well, nobody wants such a thing to happen to their business.
Here are reasons why you need an ideal customer profile:
- Align and focus all teams on a common goal
- Direct resources to valuable prospects
- Guides on a company’s marketing strategy
- Defines people who will say “yes”
- Ensures there is focused marketing investment
An Ideal Customer Profile Vs. Buyer Personas
Although ICP and buyer persona as sometimes used interchangeably, these terms are distinct. An ideal customer profile explains what businesses should target. It’s a tool used to filter lead generation activities for a business.
On the other hand, buyer persona helps you understand your customers and create an environment for tailor messaging and communication. It acts as a guide for your marketing and sales teams because it ensures effective engagement before, during, and after purchases.
While ICP looks at the perfect customer that an organization wants, a BP is created based on a comprehensive analysis of customers, an audit of a company’s sales pipeline and interviewing sales teams.
The Difference: Your ICP is a description of the type of people or companies you need to try and sell to, while a BP involves a detailed analysis of the people who buy your products or services.
3 Steps to Creating an ICP
Step #1: Determine the Behavioral Characteristics of Your Ideal Customers
Some behavioral characteristics of an ideal customer include:
Able to make a purchase: The customer has financial resources to buy your products or services.
Ready to make a purchase: They have already determined what they want to buy.
Keen about their purchase: These customers are more concerned about the value your products or services deliver.
Growing: The customers or company is likely to expand; thus, there are high chances for renewals and upsells.
Networked: These are customers who act as ambassadors for your product. They will share information about the product or your company with potential buyers.
The question that these traits should figure out is “Who?”.
- Who is the ideal customer that your need to focus on?
- Who is likely to buy your products for a longer time?
- Who is likely to place the highest value on your goods or services?
These are some of the ideal customer profile questions in B2B. You can sit down with your sales managers and review your customer’s behavioral characteristics before coming up with a sales or marketing strategy.
Step #2: Research and Analyze Your Target Market for the Best Customers
Since you have determined your best customers, it's now time to figure out why they are better customers. What is it about them? How is it that they bought your products within a short time?
To do this, you need to identify their demographics and logistics, such as:
Geography: The first step should be determining the location of your customers, whether locally, regionally or internationally.
Budget: On average, how many products do they buy from you? Or how much money do they usually allocate to products and services like yours?
Objectives: what does the customer or company want to achieve? How can you meet their objectives?
Pain points: This is the problem your prospective customers are experiencing. Can you solve it?
Business area: What activities do your potential customers participate in?
Company size: If it’s a company, how many employees does it have?
Step #3: Develop a Behavioral Profile for Your Potential Customers
Put your feet in your ideal customer’s shoes. What do they make of your products? In the process, you’ll discover the kind of impression you want to create.
Some questions to figure out about your ideal customers in this step could be:
- How do they get their product information?
- What sites or blogs do they visit regularly?
- What social media platforms are they active in?
- How will I reach them?
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