What is an ICP and How Do You Find Yours?

One of the keys to successful marketing is knowing who you should be trying to target. The most effective sales and marketing efforts identify the companies and people that have a demonstrated need for your product, the available budget to spend, and the ability to make purchasing decisions.

When all three of these characteristics are present, you’ll increase the likelihood of making a sale.

An ideal customer profile (ICP) can help you find the best-fit customers for your business to help prioritize your marketing efforts and maximize results. When you know who you are targeting with your marketing and sales, it’s easier to focus your approach. It helps you to figure out what type of company and buyer to target, which products or services to present, how you speak to them, and which channels to use for marketing.

When you find the customers that are the best fit for your organization, you can significantly increase the effectiveness of your sales and marketing efforts by targeting specific marketing campaigns to them.

What Does ICP Stand For?

ICP stands for ideal customer profile, a detailed outline of the ideal customer you are trying to attract to your business.

Wait. Isn’t that just another name for a buyer persona? Actually, no. There are important differences between the two that will affect your sales and marketing strategy.

ICP vs Buyer Persona

A buyer persona is a fictionalized version of the type of buyers you are targeting. They are an amalgam of demographic information, titles, and traits designed to represent your customer’s common attributes. They often get names like Sales Manager Sally or Purchasing Manager Pete. Marketers keep a user persona in mind when they are crafting content to align with the buyer’s goals and aspirations.

By contrast, an ideal customer profile focuses more on businesses and roles. For example, an ICP might use firmographics such as company size, revenue, location, or industry to target businesses that have a need and budget for products and services. Then, an ICP might focus on specific decision-maker roles within these companies that make purchasing decisions.

By focusing B2B marketing on the high-value potential customers who are most likely to engage and convert, marketing and sales teams save time and resources.

Examples of ICPs in Marketing and Sales

A SaaS platform for accounting might examine their current customers and define their ICP as small to midsize businesses that generate less than $10 million in revenue and target their marketing efforts at owners and founders. Because these companies are still run by owners or founders, they want an accounting solution that’s easy to use because they’ll be doing the work themselves.

A parts manufacturer might define their perfect customer as the purchasing manager at auto dealerships within a specific geographical radius that’s looking for alternatives to OEM products.

In some cases, companies may have different ICPs depending on the type of products the marketing team and sales team are targeting with their marketing campaigns. For example, a packaging solutions company that launches a new initiative around sustainable packaging might create a marketing campaign to target high-volume shippers that want to reduce their carbon footprint and improve their sustainability goals as their target audience.

In some cases, ICPs can be extremely narrow in niche categories. In other cases, they can focus on broad target accounts and different individuals within each category. In either case, an effective ICP targets potential valuable customers in different ways to generate qualified leads as part of the marketing and sales process. By identifying the best-fit customers and the ideal buyer, B2B marketers can further refine their marketing plan using this ICP framework to optimize effectiveness.

Importance of B2B Customer Profiles

ICP marketing plays an important role in growing a B2B company’s customer base. Marketers and sales teams see several key benefits when targeting ICP prospects, including:

More Targeted and Effective Marketing

An ICP helps marketers customize marketing campaigns for the right people, in the right type of companies. Especially when combined with the right marketing technology and practice, such as account-based marketing (ABM), intent data, and lead scoring, B2B businesses can realize several key benefits, including:

  • Producing more precise marketing due to better customer profiling
  • Spending marketing dollars more effectively.
  • More easily turning prospects into leads.

You’ll also reduce a lot of wasted time and effort going after the wrong customers.

Grow Sales More Quickly

ICPs can accelerate the buying process and sales cycle. Because you are targeting your best customers, they are more likely to engage. Marketing teams can streamline acquisition efforts and sales reps can close more sales.

When you bring ideal customers on board, you’re also more likely to generate greater customer lifetime value (CLV) and reduce churn.

Aligns Marketing Priorities

ICPs keep your sales and marketing team aligned to your core value proposition. Without defining your targets and goals, it’s easy for marketing efforts to get spread thin and be ineffective.

Companies that have tight alignment have been shown to exceed revenue goals by producing:

  • 24% faster revenue growth
  • 32% annual revenue growth year-over-year
  • 38% higher win rates
  • 36% higher customer retention rates

How to Define and Build an ICP

Finding your ICP requires a collaborative effort between sales, marketing, and company leadership. You’ll need alignment for effectiveness. Most companies start by examining their customer data to find their most profitable and valuable current customers.

Here is a step-by-step guide to defining and building your ICP. It starts with a bit of reverse engineering.

1. Do a Deep Data Dive

While anecdotal evidence about your existing customers can help, you really want to focus on the key data points from your CRM. You’ll want to look for commonalities and patterns.

You may also want to include other data points you have. For example, you may want to include data from Google Analytics or other measurement tools to track the buyer’s journey.

2. Identify Your Best Customers

Within the data, you need to identify your best customers. You’ll need to get agreement from your group about what defines the best customers to score them accurately. Things to consider might include:

  • Highest annual contract value (ACV)
  • Highest growth potential
  • Retention rate or repeat business rate
  • Net Promoter Scores (NPS)
  • Best profit margins

3. Find Common Traits

Once you’ve identified your best customers, you can take a more targeted approach to look for what they have in common. While it’s different for each business, you’re looking for the similarities, such as:

  • Geographical groupings
  • Specific industries
  • Company size or revenue
  • Growth stage or growth rate

Depending on the granularity of your data and your segmentation tools, you can get as detailed as you want when developing your ICP. How broadly you draw your ICP will also depend on the products or services you’re selling, and how well you match up with the customer persona.

4. Prioritize

Once you identify the key commonalities, you will want to prioritize your groupings. You may find that there are several groups that are worth targeting, so you’ll have to set some parameters on who you want to go after. For example, many companies serve multiple markets or companies of different sizes. While you want to have agile marketing that can adapt to different customers, the goal here is to find your best prospects.

The decisions you make here will help guide your marketing efforts and how you target leads for activation. Your inbound marketing, outbound marketing, and account-based marketing efforts will focus primarily on targeting these ICPs, so when a lead comes in that fits your ideal customer profile, it should be scored more highly for activation.

It helps to divide your groupings into categories to determine the highest priority for targeting. This is where the bulk of your marketing efforts and spending will go. You may want to develop secondary priorities as well.

It’s also important to identify companies that aren’t a good fit. For example, you may have customers within a specific industry, but the growth potential within that industry is limited. Even if they are potential customers, they will be the most difficult to convert.

5. Find the Decision Makers to Target

Within these companies, you’ll also need to identify the key decision-makers. The better you can define these individuals, typically by title, the more effectively you can personalize your marketing.

Once you identify the right titles, it’s worth doing a bit of brainstorming about these individuals to help identify their goals and motivations. You might want to develop buyer personas at this point to help frame your marketing efforts.

Develop Your ICP and Improve Your Marketing

As Gartner says, developing your ICP marketing is not an academic exercise. It’s a plan for action. Like any plan, it will only be as effective as your ability to activate the plan and follow through. Your ICP needs to be a foundational element that guides your marketing efforts and is firmly embedded in your sales pipeline.

With your ICP in hand, Folloze can help you engage and convert B2B buyers at every stage of their journey. From demand generation to sales orchestration, Folloze’s buyer experience platform can help you refine your marketing efforts using rich, relevant, data-driven account-based marketing and demand-gen campaigns to fuel your growth.

To learn more, contact Folloze today to request a demo.