Understanding your customer is critical for any business, whether you’re a B2B or even a B2C company. Knowing what characteristics and common traits they share can help your sales and marketing teams better grasp who they should be selling too, and how they should be driving your business’s products or services in the market. The downstream impact on your sales and marketing success is why it is crucial to define your Ideal Customer Profile, also known as an “ICP.”
What is an ICP (Ideal Customer Profile)?
For B2B businesses, an ICP can be understood as a hypothetical company that exhibits the characteristics or needs that can be solved from the adoption of your business’s products and services.
What is an ICP vs a Buyer Persona?
Oftentimes these terms are used interchangeably, but there are important distinctions between the two. Let’s take a closer look at this!
The main difference between an ICP and a buyer persona is the types of categories by which each is defined.
An ICP is characterized by “Firmographic” categories. Firmographics are identifiable attributes of businesses, non-profits, and governmental entities, such as size, revenue, budget, industry, geography, business type, and product/service offerings.
For example, let’s say your business is making a customer profile of its catering business clients. You would want to make sure that you noted the size of the company, annual revenue, where the catering business is based, and most importantly who are the major decision makers at this company. Once you’ve identified the major decision makers, you’d move on to addressing your buyer persona for those decision-makers.
Buyer personas are defined by demographic categories describing people, such as age, role, job title, seniority, income, etc. They are often used by marketing and sales teams to better understand desirable clients.
Let’s look at a Buyer Persona example! David Smith is a desirable client at a company your business is trying to target. Understanding the representative demographics of this individual and more importantly, the goals and challenges they have within their company, can help you build more resonant messaging, promote that messaging in the right marketing channels, and better relate to your buyer in sales conversations.
It is important to understand that although ICP’s and Buyer Personas differ, they work hand in hand and can benefit the other in order to help begin qualifying leads.
Why is Your ICP Important?
Let’s take a deeper look at some of the best-known benefits to creating and documenting an Ideal Customer Profile:
- Aligning Sales & Marketing Efforts.
ICP’s allow your sales and marketing teams to agree upon and align on your business’s core value proposition and brand messaging [link]. Aligning your company’s go to market efforts creates a more cohesive and effective buyer experience, not to mention a more cohesive and effective team, when everyone is working from the same playbook.
- Improved Revenues.
Probably the most important advantage gained from creating and utilizing ICPs in your business is an increase in revenue. Knowing your customer better allows for your marketing and sales teams to acutely target the customers you want. This creates faster sales cycles, with customers quickly committing to purchasing your products and services.
Having a better understanding of who your business wants to target allows your sales and marketing teams to better allocate their resources. ICPs help your business spend where necessary, focusing your funds and marketing towards those who are most likely to adopt your product or service.
- Less Churning of New Customers.
ICPs allow your business to aim your energy towards new customers that are best fit for your product or service. Therefore, these new incoming customers are more likely to have longer and lasting relationships with your company.
- Improve Products/Services.
Knowing about your ideal customers goals and challenges allows for your business to tweak your products and services to better suit and benefit your customers. These improvements to your products and services will contribute to more customers and less churn of your existing customers.