Let’s get started with a statement that I want you to bear in mind as you read the rest of this blog; understanding who your IDEAL customers are and what THEY care about is the cornerstone to ensuring your business is adding value! This in turn builds positive business relationships that drive revenue, retention, and advocacy!
A match made in heaven
An Ideal Customer Profile (ICP) is a detailed description of a prospective client that would benefit greatly from your product or service, and in turn, generate significant business value with you in exchange. A match made in heaven.
There is no strict ‘one size fits all’ when it comes to what information YOU need to build YOUR ICP, but there are some common factors that will help you take the first step!
At a top level, the process will involve taking a look at your total addressable market and starting to filter by demographic and firmographic characteristics. These are the basics that can help determine accounts that are a good FIT for you; we will break this down in more detail when it comes to creating your ICP… so keep reading!
But let’s first look into why creating a detailed ICP is one of the very first steps to take when you’re doing Account-Based Marketing (ABM)!
Ideal customer profiles and Account-Based Marketing! Name a better duo, I’ll wait…
Any ABM practitioner worth their weight will stress that taking the time to develop a strategy before diving into a campaign is absolutely crucial! Creating an ICP is a large part of that strategic set up and is utilised in the IDENTIFY stage of a campaign; that looks to segment your total addressable market into a select number of most relevant target accounts.
Creating an ICP means a shift in approach for your business, a commitment to being customer centric and understanding what value means to your customers, and then delivering on it. This is the fundamental lifeblood of ABM. If you’re running multiple campaigns, and targeting more than one vertical, industry, or buyer persona, chances are you will need several ICP(s).
Having a customer centric approach leads to greater coverage and insights into each account, which leads to deeper knowledge of customer patterns over time, which in turn leads to a revised and more specific ICP; the more specific the better, but it needs to be flexible to changes within your environment and the evolving needs of your customers. Once you start working from an ICP, don’t be afraid to change and fine tune your ICP based on what is proving most successful. It is and should remain a constant work in progress, as your customers and your market are always moving forward.
The end result is you are poised to give your future and current customers as much value as possible, which is what enables ABM to deliver great results when it comes to nurturing and expanding your current customers, and creating advocacy; the most effective and meaningful form of marketing.
People don’t buy from you because they understand what you do, they buy from you because you understand what they do.
The pieces of your Ideal Customer Puzzle
To define your ideal customer profile (ICP) you need to analyse which of your customers have proved both to be profitable for your business and successful with your product or service. This is a crucial step to creating the best ICP possible. In order for you to do this really effectively, you will need input from each of your sales, marketing and customer success teams. For bonus points, information from Accounts or Finance can be extremely helpful.
Your first assignment is to create a top ten list of customer accounts in each of the following categories:
1. Highest Spend/Profitability (ACCOUNTS)
2. Most Satisfied/Successful (CUSTOMER SUCCESS)
3. Best to Sell To (SALES and MARKETING)
4. Longest Client Lifespan (ACCOUNTS/CUSTOMER SUCCESS)
Decide on a defined period of time for the first 3 categories – I recommend you take the last 12 months to get started with. Category 4 however, should obviously cover all time.
Against each of the accounts note the following firmographic information, this input will be the basis of what your ICP looks like.
Unless your product is exclusively designed for one specific industry, it is extremely helpful to know which industries are most involved with your product. In terms of ICP it’s a no brainer, your ideal customers will be in the most active markets. This also serves as a good chance to be self-aware about new markets that could be developed into new customer bases, you have the data so you may as well be using it!
What size companies are your product or service most popular with? Be realistic, if there is an upper limit to the size of company you are able to add value too then they are not your ideal customer! At the same time, if companies of a certain size are too small to benefit from what you’re offering, again, they are not your ideal customer! Developing an ICP means finding the sweet spot and expanding on those future customers, which is why it is so effective when doing ABM.
Use your data to determine what the annual revenue is of the companies you’re getting the best results with is, at the end of the day you are putting significantly more effort into being more valuable for your customers, the end goal being increasing revenue in return! So focus in on what an ideal revenue looks like.
It should come as no surprise that you need to know where your customers are based! Where are you able to effectively do business? Take the time to develop a map of where your customers are established, including potential branches and franchises in other regions or countries. You may find that ICP requirements differ from region to region, taking into consideration cultural changes and state of economy.
- Technology they use
- Level of technology maturity
- Number of Employees in a particular department
- Size of customer base
Once you have your list of customer accounts compiled with the above information for each of the 4 categories, check out which of your clients are falling into all of them. Spoiler alert, these are the most Ideal customers that you are currently doing business with.
It is also worth checking which clients fall within 3 of the 4 categories, but we suggest that category 1 (how much money you are making) is mandatory as best practice!
Look for common threads between these companies and from this you will now be able to define the characteristics that make up your Ideal Customer Profile.
The Middle Pieces: STEM Filtering
So you’ve looked at your total addressable market and filtered out the best FIT companies using the above characteristics, but we’re doing ABM so we want to focus on the crème de la crème!
STEM breaks down to ‘Strategic’, ‘Target’, ‘Enterprise’, and ‘Mid-Market’, it’s a way of segmenting your best fit accounts based on potential value of business; so that you can then scale your campaign resources to reflect the end goal, revenue.
Think of STEM as a method of allocating the appropriate amount of resources needed for your FIT accounts, which will be instrumental when planning which of them to target for your campaign!
The Final Piece: Intent Data
Intent Data, the word on everyone’s lips, the enabler for new generation marketing… ABM is built on the fact that we CAN gather more insights about our future and current customers using data!
Intent data is all about understanding where your customers are on their buying journey; and then opening conversations at the point in time that is most relevant, with the conversation that is going to be most valuable!
Marketing utilises STEM segmentation and intent data to transform your total addressable market into a small selection of ideal accounts. So discover your ICP, and then use STEM and Intent Data to develop your target accounts for each campaign!
When we are all in, we all win
Other departments will benefit from your ICP, for example new product features and development should take into consideration what an ideal customer is interested in. Customer success also need to know what kind of content and support is needed and most effective for each and every ICP.
You will need to have regular conversations between aligned departments to make sure that your ICP is updated as and when your customers or environment change, to make sure that it remains as relevant as possible.
Not being sure isn’t ideal!
Here at Punch! we have created a template that you can use to guide your efforts of finding your ICP, download from the image below and take the first step towards being customer centric. You won’t regret it!
If you have any questions or thoughts around ICP, please feel free to email us over at firstname.lastname@example.org or comment below and we will get back to you!