Defining Your Ideal Customer Profile
The first step in developing your Go-To-Market strategy is to define your ideal customer profile (ICP). We're here to provide you with a practical approach to define that perfect audience. And let's face it - a happy and satisfied customer base makes for a thriving, successful, and sustainable business. Defining your ideal customer profile (ICP) might sound easy but there is an art to perfecting this with the right level of specificity and detail to drive success.
In the simplest terms, your ICP is a characteristic profile of the company that is:
- Most likely to buy your product,
- Most likely to purchase the fastest,
- Most likely at the highest price point, and
- Most likely to achieve measurable results from your product.
It's important to note that your ICP is the company profile and your buyer persona is the person or people you are targeting. We’ll cover buyer personas in greater depth in a subsequent piece but you're in the right place, so let’s get into it. We're going to take you from throwing darts in space to throwing darts right at the bullseye.
Pinpointing Your Company and Product’s True Value
Before we dive into the who and the what, it's vital to start your ideal customer profile journey by pausing and considering the big picture.
- What is the ultimate goal of my company for our customers?
- What is our mission, vision, and values?
- What is our product or service value proposition?
This doesn't refer to simply earning profit, but instead, think about the value your service or product provides to the consumers or customers. Identifying the "heart" and "soul" of your brand sets the foundation for attracting customers that resonate with said values. Asking your current customers why they decided to purchase from you, and what values they observe is a great place to start.
Identifying Your Target Audience
The first step in creating an ICP is to identify who is most likely to buy from you. This requires first taking a hard look at your existing customer base and understanding what makes them unique.
- What do they have in common?
- Where do they work?
- What challenges do they face?
- What motivates them?
Knowing these details can help you narrow down the pool of potential customers and target those who are most likely to make a purchase from you.
Now it’s time to get to the nitty-gritty. Begin by breaking things down into specific categories. Start broad and gradually narrow it down. For example, start with geographic regions (national or international), company size (number of employees or annual revenue), industries, and then get more specific with technographics, sub-industries, etc.
News flash – your ICP is not ‘enterprise companies’ or ‘SMBs’. That is WAY too broad. Your ICP should be something like…enterprise organizations, headquartered in the US, with at least 10k employees and $1bn in revenue, in healthcare, professional services, and retail. By having well defined criteria based on market segmentation, you'll be able to more effectively target and, ultimately, connect with your ideal customers.
Again, look at your existing customers first. If you already have 20+ customers today, leverage those companies’ characteristics to help guide you. Typically, you’ll find some common themes like 80% of your customers are in healthcare, or 70% have more than 10k employees etc.
Understanding Customer Behavior
Once you have identified your target audience, it’s important to understand how they behave when it comes to making purchasing decisions. Do they prefer certain channels over others? Are there specific times of the year when they are more likely to buy? Having this kind of insight will help you create more effective marketing strategies that will drive higher conversions.
Keep refining and narrowing down your ideal customer profile by engaging with those who interact with your brand and through market research, surveys, focus groups, and one-on-one interviews are fantastic means to understanding customer perceptions and needs. Listen closely and identify key trends, pain points, and preferences to shape your unique selling proposition. The more responsive your business is to customer feedback, the more your ideal customer profile flourishes. Remember, knowledge is power –and in this case, that translates to loyal and satisfied customers.
Developing Effective Strategies
Having a well-defined ICP will also help you develop more effective strategies for reaching customers, both online and offline. By understanding their preferences, interests, and habits, you can tailor your message and approach accordingly. For example, if your target audience likes social media, then investing in social media marketing might be a good strategy for reaching them. On the other hand, if traditional advertising works best for your ICP then focusing on radio or print ads may be more beneficial for your business.
Continuous Evaluation and Iteration
You're unstoppable! Your ideal customer profile is almost complete. The last step is to remember that this process never ends! The market is dynamic, and your customer profile should be too. Make it apriority to continuously monitor your progress, track your customers, and analyze data like conversion rates and customer acquisition costs. As your business evolves, adjust your targeting strategy accordingly for sustained growth. We recommend reviewing this in a formal capacity annually at minimum.
So, there you have it! Your path to defining your ideal customer profile is paved with introspection, segmentation, market research, customer surveys, and continuous evaluation. A well-defined customer profile will help you maximize sales conversions, resources, revenue, and ultimately, customer loyalty.