Take a closer look at the success stories of the world’s most trusted brands and you will find one key characteristic common to all – relentless commitment towards their customers. You will notice that every business decision is centered on its customer. Be it a product, pricing, sales, or marketing.
If you are a business leader or an entrepreneur reading this, ask yourself the most important question – How well do you and your teams really understand your customer? No matter how creative your marketing campaign turns out or how hardworking your sales team is, none of that will bear any fruit if you do not know your customer’s desires and pain points.
And this is where an Ideal Customer Profile, ICP, proves extremely useful.
New to the term? No worries, let’s start from the basics.
What is an Ideal Customer Profile (ICP)?
According to Inbound marketing leader Hubspot “An ideal customer profile (ICP), commonly referred to as an ideal buyer profile defines the perfect customer for what your organization solves for. This is a fictitious company that has all of the qualities that would make them the best fit for the solutions you provide.”
To put it simply, an ideal customer is the perfect customer for whom your product or service fulfills a specific need. This profile of customers stands to gain enormously from your business offering and provides substantial value in return. Value not just in terms of money, but also in the form of testimonials, referrals, insights about the product, and so on. They become the spokesperson for your brand.
The ICP is an actual representation of the audience that you must focus on while making your key business decisions, whether it is related to the product features, sales, or marketing. Creating customer profiles ensure that your money, time, and efforts are spent on attracting and converting the right leads.
Now, to the most important part –
How do you create an Ideal Customer Profile?
Just having a broad idea of who your target audience is never really enough. Guesswork will not get you the correct results. Understanding your customer in detail is the key to steady growth.
The below-listed steps will guide you in creating your ICPs.
1. Define what your corporate stands for
Creating an ICP begins with outlining what your business stands for. You must be clear about the vision, mission, and goals of your enterprise. This also includes defining the unique value that you are providing to the customer. It is an ongoing process. As customer’s needs and wants change, your business must be able to adapt and transform.
Also, your brand positioning determines the kind of patrons that you are looking to attract and retain over a period of time. Once your clear about your brand identity, then it helps you decide who your customer should be.
2. Gather information from your best customers
Consistent and constructive feedback is one of the best ways to improve any product or service. And there is no one better than your existing customers to provide you with these details.
Reach out to your top ten customers, the ones who love your product, and are loyal to your brand. Keep in mind that they should be the ones getting the maximum value from your product or service. It is important to choose the best ten, as they are likely to give you their time and help you in your endeavor.
A good way to narrow down your top ten is by asking the right questions:
- Have they been with you for a long time?
- Have their business objectives been met by using your brand?
- Has it helped them increase their ROI?
If you are a new entrant into the market or a start-up, then create a list of potential customers who would benefit the most from your product and would keep coming back for more.
Once you have your top ten ready, divide them into various categories based on the information that you already have such as:
- Size of the company
Then, schedule a meeting with them to gather more details. Getting to know them better is the best way to profile them. Remember that the more specifics you can gather about your ideal customer, the higher your chances of creating a winning marketing and sales strategy. A face-to-face meeting is ideal when it comes to strengthening existing customer relationships.
But if they are unavailable for a direct meeting, then the next effective method of collecting information is video conferencing or a telephonic interview. If circumstances do not favor a video call or interview, then the information can be collected using a survey.
Do keep in mind that a survey may not be the most convenient for them. So you will need to weave in some attractive features like a discount code or an attractive gift on completion of the survey.
The aim of this exercise is to understand their buying/decision-making process, their experience with your product (both positive and negative), their business goals, and so on. To aid you further, we have listed below some key questions that cover these aspects –
- What research do they do before buying a product?
- What drove them to choose your product?
- What do they like best?
- What are the pain points?
- Why do they continue to use your product?
- What are their business goals for the upcoming year?
- Who are their top customers?
- What technology do they have?
This is not an exhaustive list. You may need to add or remove questions depending on the nature of your business and the details that you need. The rapport that you share with your top customers will also play a role in gathering honest and timely feedback.
3. Identify the important categories
Once you have received all the information and entered it into your CRM, you need to identify common attributes amongst these top ten customers. It could be similar patterns in decision-making, common challenges, etc.
4. Document the results in a template
The last step is to record all the information across the different categories in an ICP framework. Several companies use different types of ICP templates or worksheets for this.
Let’s illustrate this further using an example –
Imagine you are a B2B company who is specialized in creating and troubleshooting websites. Your target audience includes small and medium-sized firms selling consumer goods in the Middle Eastern region.
A sample ideal customer profile template could look like this –
Buyer Personas and Ideal Customer Profile – The Difference
Several businesses confuse their ICPs with buyer personas. The reality is that they are not the same. By this time you must be wondering, so what about buyer personas?
According to Hubspot, buyer personas can be defined as “semi-fictional, generalized representation of your customers that account for the demographics, goals, motivators, and fears.” Unlike an ICP, a buyer persona is more detailed and includes information such as titles, levels of experience, motivations, fears, goals, etc.
An ICP tells you the type of accounts that you need to target your products to. A buyer persona tells you how. In short, ICP is a category, and people within the category are the buyer personas. Within a single ICP, there can be several buyer personas.
From a business standpoint, both ICP and buyer personas are important when it comes to creating effective marketing and sales strategies.
How to Ensure Your ICPs are Up-to-date?
Now that you have done your customer profile analysis, it does not mean that the work is over. In fact, what is more, important is that these profiles are consistently updated and improved in order to ensure the smooth running of operations. The accuracy of your buyer personas also depends on your ICPs.
Here are a few ways to ensure that your ICPs are up-to-date: –
1. Stay connected to your customer
Always review their feedback and address their pain points in a systematic manner. You never know you might chance upon a new group of customers or even get some insights into their buying process that will help you in crafting your next marketing message.
2. Pay attention to website and social
By examining the number of visitors to your website, the time that they spend on your blog posts, videos and all other types of content is a good way to profile them more accurately. Social media statistics also speak a lot about your consumer’s interests and habits. You can get the help of Google Analytics in analyzing their digital preferences.
3. Look back at your own success stories
Revisit the most successful deals you have won in the past and compare that process with the current ones. Try to notice any change in trends, buying behavior, and see what happened just before the customer made the decision to sign the dotted line. A comparative study can reveal some interesting results that will give you a better idea of your customer.
But why take all this trouble? The benefits are plenty!
Benefits of Creating an Ideal Customer Profile
Here is why every business today must have an ICP: –
1. Improved alignment between functions
With an ICP in place, your product, sales, and marketing teams understand the customer better. This helps them to stay focused on a unified goal and work in alignment to achieve the desired results.
The product team is armed with information on how to enhance the various features of the product and make it more attractive to the ideal customer.
Buyer personas can be created within the ICPs. These personas help the marketing team with social media messaging and running effective campaigns.
ICPs guide the sales team on which lead to prioritize and pursue. They are able to focus on leads that matter thereby improving conversion rate. To sum up, an ICP allows you to generate high value for your business within a short period of time.
2. Gain more referrals
As ideal customers already love your product and services, they are naturally happy to recommend it to other potential customers. They are satisfied with your product as it solves a problem.
If your product has changed the way they operate and made a remarkable difference to their revenue, then these customers automatically become your brand advocates.
They are likely to refer you to other similar companies who face the same challenges. Thus it becomes easier to gain more referrals and new leads.
3. Improve customer retention
A study by Bain and Company shows that a 5% increase in customer retention can increase profitability by 75%.
The more information you have on your current customer, the easier it becomes to address grievances, smoothen the on-boarding process, and improve service delivery. When your customer knows that you care about them deeply, their faith in you strengthens. They would rather stay with you than switch over to a competitor.
4. Boost Business
With accurate ICPs in place, every resource in your organization is used more effectively. This leads to lower wastage, reduced expenses, and an increase in ROI. Updated ICPs also help the company transform and adapt to customer trends and preferences. The organization experiences steady growth and continues to stay agile and customer-focused.
No matter how big or small your business is, maintaining a strong relationship with your customer is the only way you can grow.
We hope that the steps listed above help you define your ideal customer who will accelerate your business growth and help build strong brand value.
“Get closer than ever to your customers. So close, in fact, that you tell them what they need well before they realize it themselves.” – Steve Jobs