Why every scale-up should begin with determining their ICP
August 7, 2023
How can you boost your sales if you don’t have a clear idea of who you are selling to? Of course, once your product or service is in the market, it can be purchased by a diverse selection of people. However, it’s quite likely that you have a specific target customer in mind – the kinds of individuals or clients that make up your core audience, the buyers that can take your revenue to new heights. These entities can be grouped together to form your ideal customer profile (ICP).
Why the ideal customer profile is important
Every scale-up should begin with determining their ICP and how to create it. Before they do anything else (even prior to coming up with a buyer persona), scale-ups need to understand what their ICP is and how it may change over time.
An ICP essentially describes the type of customer that would benefit most from your product or service and, as a result, provide your company with the most value in return. It should contain top-level information about your ideal customer or client.
Unfortunately, a lot of startups continue to target their marketing, sales, and products at anyone and everyone. However, bringing focus to your processes and making sure that everything you do is in line with your ICP is incredibly important. It ensures that you get maximum return from everything you do. Given that scale-ups have limited resources, they cannot afford the scattergun approach favoured by corporates.
Some benefits of creating an ICP include:
An ideal customer profile will tell you exactly who you need to target and give you more focus
It helps you identify important characteristics that your most lucrative buyers share, making it easier to identify new leads
You will be able to make better decisions about which leads are worth moving forward with in the sales cycle, so you don’t waste your time. This will lower your customer acquisition cost (CAC).
It reduces customer churn and increases up-sell/cross-sell opportunities
Segmenting your ICP based on your, expected deal size, sales win rate, the customer lifetime value and readiness to buy is crucial as the first step in building your revenue engine. Once your ICP is finalised, you can align it with your entire sales and marketing strategy. Use your ICP to say goodbye to wasted resources at your scale-up.
How to create an ideal customer profile
Now that you understand the importance of determining your ICP, how do you start creating one? The answer: use your company data. The best way to understand who you should be targeting is by analysing your current customers. What do you already know about your top customers? Compile a list of your existing customers, highlight the largest deals, and identify any trends and similarities.
To come up with a really targeted ICP, you may want to break down your customer profiles into different segments. These could be by industry, geography, size (such as annual revenue, number of employees, or number of offices), budget, investors, or valuation. Whatever approach to segmentation you take could help you identify vital customer trends.
Another useful method for crafting an ICP is to talk to your customers. Find out about their experiences with your product or service, and learn more about their buying process. The following questions are always good ones to ask:
How much research did your customers undertake prior to purchasing?
Do they use referrals to help them make their decisions?
How did the customer hear about your company?
Who is primarily responsible for the purchasing decision?
What was the deciding factor that influenced the customer to initially purchase your solution?
What are the main reasons why they continue to use your solution?
Ask about challenges. What are the pain points facing your customers?
What is the main problem that your customers want to be solved?
How does your product provide a solution to the customer’s problem?
Once you’ve sought robust data to answer the above questions, look for similarities between customers by analysing all the information at your disposal. Then, make a note of this data. This could involve something simple like a spreadsheet or more advanced analytics tools that will help you identify more discreet patterns that ultimately reveal who your ICP is.
Now that your analysis is finished, it’s time to share your ICP with the rest of the company. Convey who your ICP is in a clear, understandable way that highlights how you’ve come to such a conclusion. We’ve created a template that will help you share who your ICP is and why they are important to you.
How can you boost your sales if you don’t have a clear idea of who you are selling to? Of course, once your product or service is in the market, it can be purchased by a diverse selection of people. However, it’s quite likely that you have a specific target customer in mind – the kinds of individuals or clients that make up your core audience, the buyers that can take your revenue to new heights. These entities can be grouped together to form your ideal customer profile (ICP).
Why the ideal customer profile is important
Every scale-up should begin with determining their ICP and how to create it. Before they do anything else (even prior to coming up with a buyer persona), scale-ups need to understand what their ICP is and how it may change over time.
An ICP essentially describes the type of customer that would benefit most from your product or service and, as a result, provide your company with the most value in return. It should contain top-level information about your ideal customer or client.
Unfortunately, a lot of startups continue to target their marketing, sales, and products at anyone and everyone. However, bringing focus to your processes and making sure that everything you do is in line with your ICP is incredibly important. It ensures that you get maximum return from everything you do. Given that scale-ups have limited resources, they cannot afford the scattergun approach favoured by corporates.
Some benefits of creating an ICP include:
An ideal customer profile will tell you exactly who you need to target and give you more focus
It helps you identify important characteristics that your most lucrative buyers share, making it easier to identify new leads
You will be able to make better decisions about which leads are worth moving forward with in the sales cycle, so you don’t waste your time. This will lower your customer acquisition cost (CAC).
It reduces customer churn and increases up-sell/cross-sell opportunities
Segmenting your ICP based on your, expected deal size, sales win rate, the customer lifetime value and readiness to buy is crucial as the first step in building your revenue engine. Once your ICP is finalised, you can align it with your entire sales and marketing strategy. Use your ICP to say goodbye to wasted resources at your scale-up.
How to create an ideal customer profile
Now that you understand the importance of determining your ICP, how do you start creating one? The answer: use your company data. The best way to understand who you should be targeting is by analysing your current customers. What do you already know about your top customers? Compile a list of your existing customers, highlight the largest deals, and identify any trends and similarities.
To come up with a really targeted ICP, you may want to break down your customer profiles into different segments. These could be by industry, geography, size (such as annual revenue, number of employees, or number of offices), budget, investors, or valuation. Whatever approach to segmentation you take could help you identify vital customer trends.
Another useful method for crafting an ICP is to talk to your customers. Find out about their experiences with your product or service, and learn more about their buying process. The following questions are always good ones to ask:
How much research did your customers undertake prior to purchasing?
Do they use referrals to help them make their decisions?
How did the customer hear about your company?
Who is primarily responsible for the purchasing decision?
What was the deciding factor that influenced the customer to initially purchase your solution?
What are the main reasons why they continue to use your solution?
Ask about challenges. What are the pain points facing your customers?
What is the main problem that your customers want to be solved?
How does your product provide a solution to the customer’s problem?
Once you’ve sought robust data to answer the above questions, look for similarities between customers by analysing all the information at your disposal. Then, make a note of this data. This could involve something simple like a spreadsheet or more advanced analytics tools that will help you identify more discreet patterns that ultimately reveal who your ICP is.
Now that your analysis is finished, it’s time to share your ICP with the rest of the company. Convey who your ICP is in a clear, understandable way that highlights how you’ve come to such a conclusion. We’ve created a template that will help you share who your ICP is and why they are important to you.
How can you boost your sales if you don’t have a clear idea of who you are selling to? Of course, once your product or service is in the market, it can be purchased by a diverse selection of people. However, it’s quite likely that you have a specific target customer in mind – the kinds of individuals or clients that make up your core audience, the buyers that can take your revenue to new heights. These entities can be grouped together to form your ideal customer profile (ICP).
Why the ideal customer profile is important
Every scale-up should begin with determining their ICP and how to create it. Before they do anything else (even prior to coming up with a buyer persona), scale-ups need to understand what their ICP is and how it may change over time.
An ICP essentially describes the type of customer that would benefit most from your product or service and, as a result, provide your company with the most value in return. It should contain top-level information about your ideal customer or client.
Unfortunately, a lot of startups continue to target their marketing, sales, and products at anyone and everyone. However, bringing focus to your processes and making sure that everything you do is in line with your ICP is incredibly important. It ensures that you get maximum return from everything you do. Given that scale-ups have limited resources, they cannot afford the scattergun approach favoured by corporates.
Some benefits of creating an ICP include:
An ideal customer profile will tell you exactly who you need to target and give you more focus
It helps you identify important characteristics that your most lucrative buyers share, making it easier to identify new leads
You will be able to make better decisions about which leads are worth moving forward with in the sales cycle, so you don’t waste your time. This will lower your customer acquisition cost (CAC).
It reduces customer churn and increases up-sell/cross-sell opportunities
Segmenting your ICP based on your, expected deal size, sales win rate, the customer lifetime value and readiness to buy is crucial as the first step in building your revenue engine. Once your ICP is finalised, you can align it with your entire sales and marketing strategy. Use your ICP to say goodbye to wasted resources at your scale-up.
How to create an ideal customer profile
Now that you understand the importance of determining your ICP, how do you start creating one? The answer: use your company data. The best way to understand who you should be targeting is by analysing your current customers. What do you already know about your top customers? Compile a list of your existing customers, highlight the largest deals, and identify any trends and similarities.
To come up with a really targeted ICP, you may want to break down your customer profiles into different segments. These could be by industry, geography, size (such as annual revenue, number of employees, or number of offices), budget, investors, or valuation. Whatever approach to segmentation you take could help you identify vital customer trends.
Another useful method for crafting an ICP is to talk to your customers. Find out about their experiences with your product or service, and learn more about their buying process. The following questions are always good ones to ask:
How much research did your customers undertake prior to purchasing?
Do they use referrals to help them make their decisions?
How did the customer hear about your company?
Who is primarily responsible for the purchasing decision?
What was the deciding factor that influenced the customer to initially purchase your solution?
What are the main reasons why they continue to use your solution?
Ask about challenges. What are the pain points facing your customers?
What is the main problem that your customers want to be solved?
How does your product provide a solution to the customer’s problem?
Once you’ve sought robust data to answer the above questions, look for similarities between customers by analysing all the information at your disposal. Then, make a note of this data. This could involve something simple like a spreadsheet or more advanced analytics tools that will help you identify more discreet patterns that ultimately reveal who your ICP is.
Now that your analysis is finished, it’s time to share your ICP with the rest of the company. Convey who your ICP is in a clear, understandable way that highlights how you’ve come to such a conclusion. We’ve created a template that will help you share who your ICP is and why they are important to you.
Remember, your ideal customer profile is not set in stone. Your ICP will evolve over time as your product changes and your company grows. You will also gain more data, which will lead to the identification of new customer trends and help make your ICP even more accurate.
