B2B Sales

What is an Ideal Customer Profile (ICP) and How To Create It

B2B salespeople who create an Ideal Customer Profile (ICP) set themselves up for prospecting success. Gary Halbert, the king of direct mail sales, explains why in the following short story. 

Gary Halbert used to host seminars for salespeople, marketers, and advertisers. At these events, there was one question he’d always ask his students. 

“If you and I both owned a hamburger stand and we were in a contest to see who would sell the most hamburgers, what advantages would you most like to have on your side?”

Students chose advantages such as sesame seed buns, best location, or best quality meat. Some wanted the lowest prices. Gary said, “Fine, you can have every advantage you’ve asked for, but this ONE advantage will make me the winner!” 

What advantage did he choose? 

A STARVING CROWD. 

starving crowd

His advantage is a group of people who desperately need his product. They’re hungry, and he has the burgers to satisfy them. 

As a B2B sales rep, you must be able to find your starving crowd, but to do so, you must first define what they look like. You’re going to need to create an Ideal Customer Profile (ICP). 

In this article, you will learn what an ICP is and how to make one. After you’ve developed your ICP, you can spend most of your time talking to prospects who are in love with your solution, and therefore, win more sales. 

What is an Ideal Customer Profile (ICP)

In the B2B space, an ideal customer profile is a categorical description of the company that would be a perfect fit for your product or service. It describes the company that would receive the most value from your solution. 

The company’s description is based on real data about your customers, and it acts like a telescope to help you spot prospects who are ready, willing, and able to buy your solution. 

The data that describes your ICP can be demographics, common pain points, industry, revenue, and anything else that will help you identify a best-fit prospect. 

For example, let’s say a B2B company sells property management software that allows its customers to do mobile inspections. While examining their happiest clients, the company finds that these clients have some similar attributes.

Attributes of Happiest Clients: 

  • Size: Staff of 10-20
  • Revenue: $500,000/yr – $1,000,000/yr
  • Industry: Apartment Property Management
  • Pains: Messy Documentation
  • Goals: Grow The Property Portfolio

This categorical description is an ICP. It describes what a “best-fit” customer looks like. 

Here’s another example of an ICP: 

ideal customer profile

What’s the Purpose of an Ideal customer profile? 

An ICP helps you quickly find and qualify leads so you can spend more time doing what you’re best at, selling. And when you’re selling, you can spend your time talking with prospects who are genuinely interested in your product or service.

If you create your ICP correctly and target accounts that match the description, you will speak only to the customers who NEED your solution. 

It’s better to spend time going after a list of 50 companies that would gain immense value from your solution than a list of 500 companies that view your solution as a “nice-to-have”.  

Now that you understand the basics of an ICP, you know that you should spend your time reaching out to companies that fit your ICP. 

But, inside of those companies are people with different titles, experiences, and responsibilities. How do you standardize who you should be spending your time emailing and calling within those companies? 

And how should you be selling to those different types of people? 

You can answer these questions by creating Buyer Personas.

What is the Difference Between ICP and Buyer Persona

Salespeople are often confused about the difference between an ICP and a Buyer Persona. This is because both include a set of guidelines to help separate the best prospects from the rest. 

Here are the main differences: 

Ideal customer profile is a description of a company that is the best fit for your product or service. Buyer persona is a description of the people inside of the companies and a guide on how to sell them. 

The ICP helps you find the perfect companies to call on. The buyer personas help you determine which employees to call and how to sell to them. Just like the ICP, there’s data that goes into creating the buyer personas. 

The data can include the prospect’s responsibilities, title, goals, fears, and motivations—which all help you understand your prospects and customize your pitching. That way, you can create a sales playbook and a repeatable outreach process. 

Here’s an example of the difference between an ICP and a Buyer Persona: 

difference between an ideal customer profile and a buyer persona

To make even better use of your time, the people for whom you create buyer personas should be decision-makers, the ones with final purchasing power. 

Walk-through of Forming a Buyer Persona

For this example, pretend there’s a B2B SaaS company that sells sales engagement software, like Salesloft or Outreach. They have their list of ICP best-fit companies to cold call and are trying to determine which types of people inside of the companies they should contact.

It wouldn’t make much sense for the salesperson to call on the HR Director or the VP of Product. Their responsibilities and goals aren’t related to the product’s solution—increasing outreach efficiency. 

On the other hand, the VP of Sales and the BDR Manager would care about increasing their salespeople’s efficiency. So, the salesperson should target those two titles in their outreach. 

They should then create separate buyer personas for the VP of Sales and the BDR Manager, encapsulating the responsibilities, motivations, fears, and pains of each persona. 

Example Buyer Persona

VP of Sales

  • Responsible for increasing revenue
  • Wants to generate more leads
  • Worried about not hitting quarterly revenue targets
  • Cares about standardizing sales processes

BDR Manager

  • Wants to track email effectiveness
  • Wants more emails sent out
  • Feels his team doesn’t manage their time well enough
  • Has questions about personalization capabilities

Both of them will care about the product, and they’re both worth your outreach. However, they differ in their needs, pain points and motivations. 

Buyer personas help you cater to these differences by setting up a playbook. Once you’ve created these buyer personas, you can differentiate your messaging and value propositions to the different personas. 

Keep in mind that buyer personas will never be perfect. Some desires and pains might overlap between personas. But having an understanding of what specific prospects commonly want and need is better than going into a conversation blind and selling a VP of Sales like you would a BDR Manager.

Why It’s So Important to Have an ICP

An ICP is important for many reasons. It enables businesses to focus time and energy on the right prospects. Likewise, it allows salespeople to close more deals faster and helps you find new customers that stick with your company for a long time, offering benefits like referrals and testimonials. 

However, the full importance of having an ICP cannot be fully explained without an understanding of a critical B2B concept called “Nailing Your Niche”. Aaron Ross coined the concept in his books on B2B startup success, “Predictable Revenue” and “From Impossible to Inevitable”.

Nailing Your Niche

According to Aaron Ross, nailing your niche is the most critical factor in B2B sales success. Below, we’ll discuss what “Nailing Your Niche” means and why businesses cannot achieve it unless they’ve created an ICP. 

When working with clients, Aaron’s job is often to figure out why a product isn’t selling. He gives the most common reason in this interview:

“It has nothing to do with the product; the product is usually fine, it’s about being able to find and market to the companies who haven’t heard of you or your brand before. That involves knowing who the best types of prospects are and what customers need you—need, not want—and understanding what they care about.” 

Aaron Ross

Sound familiar? 

That’s because the ICP and “Nailing Your Niche” concepts are interconnected. To understand your current clients and find the best possible prospects, the ones who need your solution, you have to create an Ideal Customer Profile. 

Aaron goes on to explain what you must know about your niche customers:

  • What their pains are
  • What they want
  • How to deliver
  • Where to find them
  • How to find them
  • How to engage with them

Without the answers to these questions, you can’t set up a repeatable sales process. Aaron also says, 

“If you don’t get that, outbound prospecting is a waste, marketing is a waste, and hiring salespeople is a waste.”

And that makes sense. No salesperson wants to spend hours chasing prospects that won’t take a meeting, or worse, prospects who take a meeting and then never pull the trigger because there’s no urgency to use your product or service. 

You need to spend all of your focus calling on leads that fit your ICP and have high chances of closing. 

How Prospecting Changes When You’ve Nailed Your Niche

Imagine you’re working for an agency, and you get a prospect on the phone. They ask what you do, and you reply with “everything!” Now, while that’s impressive, it’s not going to help you nail your niche. You’ve cast too wide of a net. 

benefits of having an ideal customer profile

On the other hand, when you say you solve a specific problem for your niche, a couple of things happen during your prospecting.

You will come across as an expert

If you solve a couple of main problems for a single industry, your company will come across as an expert that dedicates their time and knowledge to a small number of issues. 

In the prospects’ minds, that means you will do outstanding work for them. For example, if a brand is looking for SaaS blog content, they will choose the agency specializing in SaaS content over a generic marketing agency. 

You will spend less time on the phone with unqualified prospects

According to Aaron Ross, when you are not sure about your niche needs, you will spend a lot of time discovering how you can help them. 

You will ask, “What problems are you having?”

Instead, Aaron writes that you should be asking, “Do you have this problem?” 

That question gives rise to a short and valuable conversation. And therefore, it’s part of what he calls a growth mindset.

Sometimes, getting to no quickly is a win because you will eliminate disqualified leads that would otherwise be a time-sink in your day. 

And if you are not at the point where you are sure about what specific problems your niche market will have, then the process of creating an ICP will help you figure it out. 

Other Benefits of Creating an ICP

Personalization

With your ICP, you know a lot about your prospects. You know their industry, their needs, their pain points, and their size. 

These insights allow you to personalize your message to your prospects, which makes them listen to what you have to say.

Pro Tip: This is especially useful when it comes to pain points because you can add them to your email templates. Unlike other data you can find by researching the prospect’s website (size and industry), pain points are only realized when you’ve studied your best clients and created your ICP.

The personalization of pain points also helps with cold calls. 

You can say,

“John, it’s Dave here from Building Software Inc., I’m giving you a call because many companies in the {ICP Industry} have been struggling with {ICP Pain Point #1} and {ICP Pain Point #2}. 

Since the prospect fits your ICP, one of the pain points you’ve listed should pinch a nerve and inspire them to pay attention. Then you’re on your way to a sales meeting. 

Time Management

As discussed, the only way to create a repeatable sales process that produces predictable revenue is by nailing your niche through the creation of an ICP. 

Once you’ve done that, you will be able to spend more time talking with prospects who need your solution and are willing to buy, and you will drive down wasted time with soon-to-be unqualified prospects. 

Additionally, you will be able to easily disqualify inbound leads that might otherwise clog up your pipeline.  

Alignment Across Marketing and Sales 

Marketing and Sales can use the same messaging when promoting the solution to prospects in the ICP. That means marketing can spend time creating ads that will send salespeople qualified leads instead of duds. And marketing can equip salespeople with great content that speaks to the desires of the ICP. 

Besides an improvement in happy hours and team meetings, an alignment will also increase sales growth. 

According to HubSpot, organizations with alignment across marketing and sales see 36% higher customer retention rates and 38% higher sales win rates. 

More Referrals 

If you have an incredibly happy bunch of customers, they’re going to refer your product or service, which means more sales for you. 

Plus, you will be able to upsell them more easily. As stated in the book “Persuasion” by Robert Cialdini, someone who has bought from you once is twice as likely to buy from you again. 

So now that you see the immense value an ideal customer profile brings to your sales process and company health as a whole, let’s dive into how to create one. 

How to Define Your Ideal Customer Profile 

Defining your Ideal Customer Profile can be more fun than it sounds. Put on your detective hat and get ready to analyze your best customers. The process itself is rewarding. After it, you will have a deeper understanding of what makes your customers tick, which will help you win more sales. 

how to define your ideal customer profile

1. Create a List of Your Best Customers

Take a look at your clients in your database. Pick out 5-10 clients that are getting the most value out of your product or service. These companies are the ones who are receiving the biggest boost to their bottom lines, along with other forms of value such as pains alleviated, goals achieved, and peace of mind. 

Figure out which 5-10 companies would cry out in agony if one day they woke up and your service had disappeared off the face of the earth. 

Having trouble figuring out who those 5-10 clients are? 

Try asking other members of your team. Account Managers are great to ask because of their constant communication with the clients. They can tell you which clients are the happiest and use your solution the most. 

If you don’t have five clients yet?

That’s okay. You can do your market research and estimate which types of companies will get the most out of your solution. 

Pro Tip: Look at your competitors and do some research on their clients. Maybe there’s a certain brand that raves about your competitors’ service. Since you’re a competitor, that company could also be a top client of yours. And who knows, one day they just might be. 

Here are some other questions to ask your Account Managers or team members to pick out the best clients: 

  • Which accounts have been with you the longest?
  • Which accounts use your service most often?
  • Which accounts rave about the service?
  • Which accounts have the highest ROI? 

Okay, now that you’ve got your list of best and happiest clients, it’s time to study up.

2. Describe Them

You want to understand why these clients are receiving so much value from your service. To do so, analyze the companies on your list using these attributes as a guide: 

  • Technologies used
  • Size
  • Revenue
  • Number of Employees
  • Favorite Features
  • Organizational Structure
  • Industry

The list above is not exhaustive, and near the end of this post, we’ll go over some other questions to ask yourself. Basically, the more you can learn about your current clients, the more accurate your ICP will be, and the more ammo you will have later when pitching new prospects. 

As you fill out these attributes for your top clients, you will start to notice you don’t have access to some of the information. For example, maybe you don’t know the number of employees or annual revenue for Client #3. 

To fill in these gaps, set up some interviews with the clients. 

3. Set up Interviews

If you did a good job selecting the clients that love what you do, they’d be more than happy to get on the phone with you or their account manager. 

Setting Up The Interview

And if you’re still worried about wasting their time, pitch the interview as a way to improve your service to provide them even MORE value than before. 

How could they say no to this:

“{Name}, we’ve recently been going over our client list to better understand their needs. In doing so, we picked out a list of our 5 top clients we love working with the most. You and your team were one of them! 

Would you be open to a quick interview with us so we can learn more about your business and see if there’s any way to improve our product/service to provide you even more value? 

You can use the above example in a call or email.

During The Interview

The goal of the interview is to fill in the missing gaps in the attributes section. If you couldn’t figure out their budget or favorite features, this is your time to get the answers. Also, learn about why they decided to buy from you and how their experience has been. 

During the call, you might even come across some other benefits they are receiving from your service that never even crossed your mind. 

Here are some potential questions to ask during the interview:

  • Who was the decision-maker on this purchase?
  • What is the biggest pain the product has taken away?
  • Who on your team uses it the most?
  • What are your current goals for the year? 
  • Why has it been so helpful? 

And who knows, the interview might turn into a chance to solve more of their problems with other products or features you offer. Whatever happens, you’re going to come away closer with the client, a priceless benefit. 

4. Fill in Your ICP Template

Organize the data you’ve gathered about your clients and figure out what these companies have in common. Here are some things to think about: 

  • Do all 5-10 of these companies have about the same budget? 
  • Did they all have a similar pain you removed?
  • Was there a certain answer that all of them gave you during your interview? 

Then, take your findings and put them into your ICP template. 

When you’re done, it will look like the one below, with more or fewer categories depending on your findings. 

ICP example

5. Continue Refining Your ICP

An ICP is never complete. As you grow, you’re going to learn more about your customers. So remember to consistently set up new interviews with new customers. 

Also, when you want to grow and offer new features and services, run them by your best-fit clients and see if it’s even something worth creating. Client feedback should be used to guide your product team. 

Questions to Ask Yourself That Will Help You Define an Ideal Customer Profile

Below, find a list of some questions that can help you define an ideal customer profile. 

#1 What goal do they want to achieve with your product or service?

It’s important to understand what goals your best-fit prospects are going for so that you can sell them on how you can help them get there.

#2 What other technologies are they using? 

Sometimes your prospects will use technology that creates barriers to entry for your solution. That could be for a couple of reasons: no API, overlapping features, or double data entry. 

On the other hand, some technologies will “play well” with yours. Some of your best-fit clients may use your software to complement another one of their software solutions. If that’s true, you can sell your software as a complement when you’re on the phone with new prospects.

When prospecting, you can say something like this: “Many of our clients use {Technology A} alongside ours.” 

#3 What’s their company culture like? 

Some of your best-fit clients might have similar company cultures. Maybe their employees tend to be on the younger side or share values such as “analytical” or “embrace technology”. 

If you understand the cultures that love your service, you can take those priorities and pitch them to new prospects. 

#4 How long have they been in the industry, and how big are they?

Maybe some established companies are less likely to buy your service due to rigid internal processes and a bureaucratic organizational structure. 

Figure out if it’s worth spending time closing large organizations. Often, the smaller ones are more likely to buy because they are looking for solutions to beat their larger competitors. 

#5 What are their main pain points? 

If you can figure this out, you will know how to open every phone call and prospecting email. 

Mike Weinburg, author of “New Sales. Simplified.”, writes that salespeople who mention their customers’ common pain points early in the conversation will come across as value providers and win more sales. 

# 6 How have economic and environmental conditions affected their business?

This is especially telling during the coronavirus outbreak. It’s critical to understand which clients of yours can weather the storm, and why. Also, think about how your solution might help them during difficult times like these and pitch it to prospects. 

#7 What types of clients do they serve? 

In the B2B landscape, you need an understanding of whom your clients are trying to help. If you can demonstrate that understanding of your prospect’s customer base, you will come across as a valuable and caring consultant. 

The Takeaway

As a Medical Doctor studies the body that supports human life, you must study the people who give life to your business: your clients. 

Knowledge is power, and in B2B sales, an ICP enables you to refine, update, and grow your understanding of your clients. 

That ability alone will do more for your sales growth than any other trick in the book. 

Write A Comment