Introduction
An ideal customer profile (ICP) is a description of the perfect company or customer you want to target for your business. It is a fictitious company that has all of the qualities that would make them the best fit for the solutions you provide.
Companies that fit your ICP are vital for revenue generation as they are more likely to buy, stay loyal to your product, and refer you to others.
What is an Ideal Customer Profile?
An ideal customer profile defines the firmographic, environmental, and behavioral attributes of accounts that are expected to become a company’s most valuable customers.
It is developed through both qualitative and quantitative analyses and may optionally be informed by predictive analytics software. The ICP is focused on the most valuable customers and prospects that are also most likely to buy. The ICP should not be confused with the total addressable market or total available market, which are calculations or estimates of the universe of potential target customers.
The ICP is a foundational, organization-wide decision impacting downstream sales and marketing efforts. It aligns marketing, sales, service, and executive teams to the highest-value accounts. It also creates focus on scalable and repeatable strategies and tactics to engage and convert top accounts.
How to Create an Ideal Customer Profile
To create an ideal customer profile, you need to follow these steps:
- Gather qualitative inputs: Gather qualitative inputs through close interaction with stakeholders leverages the organization’s diverse expertise and fosters cross-functional buy-in.
- Quantitative analysis: Quantitative analysis of historical prospect and customer data helps identify the common attributes of the most (and least) valuable accounts. Analyze data from CRM, ERP, and other systems to identify firmographic, environmental, and behavioral attributes that correlate to value (e.g., ACV and LTV).
- Develop a hypothesis: Develop a hypothesis about the ideal customer profile based on the qualitative and quantitative inputs.
- Analyze user behavior: Analyze user behavior to understand those users who are most likely to become high-value customers.
- Narrow down the focus: Narrow down the focus to the most valuable accounts.
- Nail your marketing and positioning: Nail your marketing and positioning by creating targeted, effective campaigns that speak directly to your ideal customer.
- Ideal customer profile template: Use an ideal customer profile template to create your own, plus a downloadable template!
Ideal Customer Profile vs Buyer Persona
An ideal customer profile is focused on the most valuable customers and prospects that are also most likely to buy.
It is a description of the perfect company or customer you want to target for your business. A buyer persona, on the other hand, is a semi-fictional representation of your ideal customer based on market research and real data about your existing customers.
It is a tool that helps you understand your customers (and prospects) better, and make it easier for you to tailor your content, messaging, product development, and services to the specific needs, behaviors, and concerns of different groups of customers.
Conclusion
An ideal customer profile is a critical, strategic document that guides key downstream efforts. It is a description of the perfect company or customer you want to target for your business.
Companies that fit your ICP are vital for revenue generation as they are more likely to buy, stay loyal to your product, and refer you to others. By following the steps outlined in this article, you can create an ideal customer profile that will help you align your sales and marketing teams, generate revenue, and grow your business.