Expanding the client base and adding new streams of revenue are the primary goals for most B2B firms. However, it is also a fact that B2B companies struggle quite often with lead quality, if not volume – which leads to enormous wastage of time and resources spent in convincing non-interested or low-value clients, when the same could have been channelized towards interested and high-value clients, resulting in more conversions and higher ROI.
But is that even possible?
Of course, it is. You can always glean the essential details from your customer data to build your Ideal Customer Profile (ICP), enabling you to target best-fit clients for your business based on your past wins.
What is an Ideal Customer Profile?
An ideal customer profile refers to the description of a customer who would benefit from your offering while providing your business significant value in return. In other words, it is a hypothetical company that can leverage the maximum benefit from your product or service while providing high value – both in terms of revenue and publicity – in exchange. Quite obviously, your ICP helps you identify your best customers, whom you must focus on to grow your business seamlessly.
Besides generating revenue, an ideal customer profile will also help you find prospects that can provide additional value to your business in terms of word-of-mouth marketing, feedback, testimonials, and acting as your brand advocates.
Does Your Business Need an Ideal Customer Profile?
According to us, the answer to that question is a definite yes. Determining your ideal customer profile helps you target the most promising and interesting prospects – improving your sales outreach and the return on your marketing investment. Some of the major benefits of developing an ideal customer profile include:
- Instead of spending equal time on all your incoming leads, you can use your ideal customer profile to sieve out high-quality leads that are ready to buy your product or service.
- Based on your ICP, you will automatically spend fewer resources on pursuing the wrong leads. Using the information in the profile, you can identify interested customers and also figure out their requirements to connect with them in an effective manner, leading to more wins and consistent sales.
- By converting ideal prospects into customers, you also create an army of loyal brand advocates who would be happy to recommend your products to others, owing to the exceptional value they derive from your product or service.
- Creating an ideal sales profile also helps in personalization, which is essential to stay ahead of the competition. Most businesses today want their needs to be met intuitively and abhor wasting their time in considering generalized solutions to their challenges.
- Better account management is another advantage of ICP as different products or services may be useful for different prospects – and building customer profiles can help you streamline these requirements.
- Organizations can also use ICPs to craft impactful content directed at the pain points of their ideal users, offering them value to overcome those challenges.
Difference Between Ideal Customer Profile and Buyer Personas
As we mentioned earlier, chasing accounts that are not the right fit can drain your resources significantly. All the time spent by your sales team in nurturing low-value prospects could be used for converting your ideal prospects, once identified, based on your ICP. To get even more out of this approach, it makes sense to create a named list of not only your ideal accounts but also individuals who are vital in getting those accounts onboard – which brings us to the difference between two, very often confused, terms, that is, ideal customer profile and buyer persona.
Ideal customer profiles can be defined as descriptions of best-fit companies for your organization to sell to. Such a profile may specify the size of the account, geographic location, the length of the sales cycle, type of product or service, etc. Such an exercise helps you target new accounts based on past wins and is also beneficial in lead scoring and building marketing strategies.
On the other hand, a buyer persona is not the description of an account but refers to the people involved in the buying process. A buyer persona provides a detailed analysis of the people (not accounts) who buy from you. Building such personas helps in fine-tuning your content and marketing strategies to engage the decision-makers (of your ideal prospects) better.
Of course, it is evident that your ideal customer profile influences your buyer personas – but your buyer personas are also informed by demographics such as job title, seniority, and income of the individuals who buy from you. It is also common for most organizations to have multiple buyer personas.
A friendly tip: Don’t base your buyer personas on job titles – such as Marketing Executive Samantha – which is standard practice. Instead, base your buyer personals on the challenges you aim to solve for different individuals – such as Start-Up Samantha (listing Samantha’s pain points and how you can solve them). By creating buyer personas based on the challenges faced by your buyers, you can turn the focus of the conversation to the issues you are resolving and accordingly fine-tune your script while communicating with leads based on a particular buyer persona.
Now that you know the difference between an ideal customer profile and buyer personas – here’s an important fact. You need both ICP and buyer profiles to maximize your marketing ROI and conversions.
Below, we have shared a hypothetical example to make this clear. Consider ABC, a tech company, whose ideal customer profile looks something like this:
- A budget of $10,000 or more
- An employee base of 10 to 100
- Located in the USA or Western Europe
- Needs an installation time of more than three months
In addition to a pre-defined customer profile, ABC built a few buyer personas to enable their team to create targeted content and help their sales reps connect better with the key stakeholders responsible for decision-making. We have shared one of the buyer personas for ABC below:
- Emphasizes on upgrading IT infrastructure for operational efficiency
- Focused on tech investment for cost savings
- Questions about potential areas of up-gradation and quantifiable benefits.
Are you wondering how this helps?
Well, ABC uses its ICP to pick the accounts it must target while the buyer personas inform its team members about the individuals for whom they are creating content. The personas also help sales reps to prepare their sales pitch in advance.
Thus, ABC makes use of its ICP at the beginning of the sales cycle to quality leads and prioritize good-fit accounts for better results. Once this step is done, it uses the buyer personas to decide on the best way to sell to the individuals responsible for calling the shots at the identified prospects.
Of course, in a dynamic and competitive landscape, both your ideal customer profile and buyer personas will change with time, and it makes sense to continually revisit these definitions to increase the efficiency of your sales and marketing teams.
Benefits of Building an Ideal Customer Profile
An ideal customer profile defines the ideal customer for the problem that your company resolves. The hypothetical organization includes all the features that make it the best fit for the product or services you provide. ICPs come especially handy for account-based marketing by enabling you to focus your efforts on highly targeted accounts for maximum results.
Here are three key benefits of building an ICP:
- Define the problems that your organization is solving for a company
- Align your service capabilities, as well as content, to meet a prospect’s requirements
- Create a dynamic roadmap for product upgrades and changes
But how do you identify the best-fit accounts for your company? We will discuss this in detail in the next section. However, to give you a quick overview, we have listed the key criteria to consider to build your ideal customer profile. Just like your sales representatives rely on lead prospecting methods like BANT to sieve out interested leads, the below characteristics will help you build the profile of an ideal prospect, ensuring your sales reps no longer need to waste their time in conversing with weak leads.
- Budget – Consider the lowest amount that your customers must pay to utilize your product or service.
- Industry – List the key industries you work with and also those that you do not work with.
- Location – Which geographies do you cater to? Are there any geographical restrictions on your product or service? You must also consider any government or legal restrictions that restrict the sale of your product in any area or industry.
- Turnaround Time – Most B2B companies have service level agreements in place to manage customer expectations regarding timeline and quality. However, are you able to offer a quicker response or an additional service, if required by a particular prospect?
By answering these simple questions, you will have a great starting point to build your ideal customer profile. Once your list is of desirable characteristics is ready, you can disqualify the leads that don’t meet your pre-defined criteria and ensure your sales reps spend their time engaging good-fit prospects.
How to Build Your Ideal Customer Profile
You cannot please everyone – that’s a fact. And, when you don’t have an ideal customer profile, you are only wasting time in trying to please everyone, which is not going to help your growth.
Think about it – your prospects can research solutions online, and your competitors are already working hard to grab their attention. In this milieu, you can increase your sales reach effectively by drawing an ideal customer profile to ensure better targeting and higher personalization in your go-to-market strategy.
Here are some proven steps to draw your ideal customer profile to identify ideal prospects that are willing to purchase your service or solution.
1. Describe the Characteristics of Your Ideal Customer
To develop your ideal customer profile, it is best to start by comparing and analyzing existing customers who are deriving value from your product or service. The first step, therefore, is to identify those customers who love using your solution and are getting more value from it compared to other users.
Once you have listed more than five such users on your list – you can jot down the characteristics that we described in the section above, such as Budget, Size, Industry, and Location. If you are missing any information, you can always find out the answers in the next step, that is, conducting interviews.
2. Connect With Your Top Customers
After listing your best customers, it is time to chat with them to understand their experience with your product or service.
The aim is to learn more about the buying process – that is, how did they come across your product or service, what prompted them to purchase it and what value are they deriving from it. You can also ask them about their decision-makers, and the specific pain points your organization is solving for them.
3. Pick Common Patterns
Once you have completed the interviews, feed the information into your CRM or client management system to fish for common characteristics between your best customers. These traits will be used to refine your ideal customer profile further.
4. Plug the Data Together to Build Your ICP
Now that you have all the information you need, it is time to tie everything together into a comprehensive profile. Below is an example of the sections you can include in your ideal customer profile.
- Key Pain Points
- Business Objectives
- Decision Making Process
- Other Characteristics
In addition to the above steps, we also suggest that you review customer complaints and feedback carefully to uncover their expectations of your product. Using analytics to monitor your website visitors will also give you a lot of information about the demographics and preferences of your prospects – and help you understand the buying process better. It is also a good idea to continue comparing your best-fit accounts to keep your ICP updated at all times.
ICP and Sales Outreach
There are several reasons why B2B companies must build an ICP – however, the most important reason is that having an ICP can help you improve your lead quality, which is crucial for the efficiency of your sales and marketing teams. With an ICP, you can focus your sales and marketing efforts on companies that not only derive the maximum value out of your product but are also most likely to buy from you immediately.
You can also use your ICP to select predefined filters for your incoming leads on a sales automation platform like Clodura to get access to sales information for best fit accounts in different industries and add new streams of revenue effortlessly.