Ideal Customer Profile (ICP) - What, Why, How?

It's no secret that effective marketing requires a good understanding of customers. The Ideal Customer Profile is a tool particularly useful in B2B marketing. A well-developed ICP can significantly improve sales efficiency. In this article, we'll gather everything you need to know about this method and its utilization.

What is the Ideal Customer Profile?

The Ideal Customer Profile (ICP) is a set of characteristics. It does not encompass all our customers but only those who are most valuable to us due to the high value they will generate for our company.

Of course, the ideal customer profile should also include customers we can realistically reach. Hence, the probability of sales and customer value are two crucial indicators to consider when creating an ICP.

What the Ideal Customer Profile is not?

The Ideal Customer Profile is often mistaken for a Buyer Persona, which it definitely is not. This misconception can lead to practical problems, especially in B2B marketing.

"The result of this mistake is that we have neither the Ideal Customer Profile nor the Buyer Persona," says Łukasz Kosuniak, host of the Business Marketer podcast. "In brief, the Ideal Customer Profile is a market segmentation tool focused on companies, while the Buyer Persona is a tool for reaching key decision-makers in those companies," he explains.

In short: Your Buyer Personas probably work for ideal customers.

The Ideal Customer Profile is also not the same as the target customer. The target customer includes everyone who can buy our product. Among target customers, the group of ideal customers is the one we pay particular attention to and direct individual actions towards.

Does every company need an Ideal Customer Profile?

In short: no, not every company needs an Ideal Customer Profile. However, most companies will benefit from creating one. Even just preparing an ICP helps gather valuable knowledge about which customers are particularly valuable to us. Its application teaches us how to acquire high-value customers and better focus on key sales areas.

When might applying ICP not yield the expected results? This could be the case for young companies that do not yet have sufficient customer data or a workforce ready to serve customers selected through the profile.

Of course, a company may also have a wide-reaching strategy, and in such cases, narrowing down the group of ideal customers is not necessary. Since this is related to the organization's overall strategy and development, the decision to implement ICP should be made by the company's management.

What does building an Ideal Customer Profile help you achieve?

Creating an Ideal Customer Profile helps us focus our marketing and sales efforts on the right group. In other words, we can invest more energy where it will pay off the most.

Developing an Ideal Customer Profile is an essential element of basic market segmentation. This allows us to distinguish two groups: ideal customers and all others. It can be used, for example, to select leads that reach salespeople.

Working with ideal customers enhances our marketing competencies. Strategies that work on the most valuable customers are worth scaling to acquire more valuable customers.

How to create an Ideal Customer Profile?

1. Identification or development of criteria.
   
   Building a set of criteria is the most critical step in creating an Ideal Customer Profile. These criteria should genuinely help us identify companies that are our ideal customers. The criteria should focus on two main areas:
   
   a) Probability: We need to answer the question of who it is easiest to reach with our product or service. It could be specific industries. We need to determine if we have any significant differentiators in the market that allow us to sell faster or gain a competitive advantage.
   
   b) Value: This refers to the profitability of a given customer. We need to consider that some customers might buy from us willingly but also generate costs, such as support or complaints. Therefore, it's not just about revenue but also about acquisition and maintenance costs. Another value criterion might be the potential growth of a client or whether they would be willing to provide us with references.
   
   
2. Qualification, which means applying the criteria.
   
   Using well-developed criteria allows us to identify the companies to which we should pay special attention.
   
   
3. Division of responsibilities, i.e., moving on to actions with the ideal customer.
   
   Our sales and marketing teams should be aware of the Ideal Customer Profile and ready to work with it once it's created. This often means transitioning from mass marketing to one-on-one or Account Based Marketing.
   
   
4. Verification, i.e., modifying the criteria.
   
   An effective Ideal Customer Profile should be continually verified and modified to remain relevant.

Where to gather data to build an Ideal Customer Profile?

To accurately identify the most valuable customers, we need quantitative data, such as customer acquisition costs. It's worth collecting such data regardless of whether we plan to create an ICP. Qualitative data is also essential, gathered during conversations with customers who can indicate the factors that influence their choice of our services. Additionally, predictive data includes market development analyses that we have access to.

Automation can be helpful in gathering data. A good CRM can collect information about lead sources, purchase paths, transaction values, etc. It is crucial to store data collected before sales, marketing, or customer service in one place, as done in HubSpot. This way, we can immediately use analytical tools. Advanced CRM tools also allow customer segmentation based on selected criteria. We can then customize sending notifications to customers or passing leads to the sales department.

What results can we expect from preparing an Ideal Customer Profile? It undoubtedly brings order to our actions and increases sales efficiency. Therefore, it's worth taking on this task, either independently or with the help of experts. Would you like to implement technical solutions that will help you with efficient segmentation? Or perhaps you are seeking a digital strategy to reach valuable customers? We'd be happy to assist!