How to create your ideal customer profile (ICP)

Every business has goals and aspirations. Whether they include achieving exponential growth or generating millions in sales, first, there should be a strategy for establishing a strong consumer base.

Taking the time to produce an ideal customer profile (ICP) is helpful in this planning phase. It allows businesses to easily adapt marketing messages to suit the exact wants, habits, and pain points of the audience that has the highest chance of buying.

So, what is an ideal customer profile, and how can you create yours?

An ideal customer profile represents the type of client or company a business believes is the perfect fit for the product or service it offers.

It allows a business to highly personalize its communications and target customers that align with its solutions instead of the total addressable market (TAM).

In simple terms, ICP is a strategy that segments the market to identify best-case accounts or customers it wants to land and nurture. It helps enhance the overall customer experience, leading to more successful deals.

An ICP often takes the shape of a fictitious business. This business would be receptive to the sales team and have the perfect location, needs, scale, and budget.

Here’s why creating an ideal customer profile is important:

Boosting sales

An ICP can reveal which customers are likely to be interested in a product feature the business currently offers. Sales teams can then use it to identify high-quality leads and customize their approach by tailoring their messaging to reach out to these potential customers. This can help them close more deals.

Reducing silos

Siloed data often acts as a barrier to achieving deeper personalization in a business. Ideal customer profiles are useful because they unify data. A single customer view enables the sales team to get the context they need to develop a personalized experience.

Driving loyalty 

A business needs to offer proactive and personalized experiences to build trust and nurture customer loyalty. Customers often stay loyal to a brand if they feel it understands them. Businesses can leverage the data from the ICP to engage with their customers and create a deeper connection with them.

Your business should direct its marketing efforts toward a target audience of ideal customers. An ICP can help you create content and campaigns that are customized to those customers. You can then offer information to them about the relevant product or service, which lets them know that you understand their needs and can fulfill them.

An ideal customer profile gives a clear understanding of who your customers are and their needs. This ensures that all interactions with them are effective and helpful.

It provides customer data that you can use in the sales process to foster solid relationships before, during, or even after the sale. For instance, your business can use a customer’s previous purchase history to suggest other offerings that would interest them. 

The lines between an ideal customer profile and the concept of buyer personas are sometimes blurred. They are different things but can influence and help inform each other. Both influence and inform various parts of a business’s marketing, sales, and support strategy.

An ICP describes the customer that would benefit most from the business’s offering. On the other hand, the buyer persona describes an ideal customer based on marketing research and factual data about existing customers.

The target audience in every business often falls into customer segments. Developing a buyer persona helps you add reality to these segments. It converts a particular customer segment into an individual you can imagine actually existing, allowing you to customize your marketing strategy to target that persona.

Creating an outbound sales strategy can challenge businesses of any size. Here are some strategies for creating an ICP:

Method 1: top-down sales strategy

The first step in this method is finding the contact details for your target business’s chief marketing officer (CMO) or vice president of marketing (VPM). Then, ask them to refer you to an internal contact.

While the CMO or VPM could be excited about your offerings, the odds are you won’t grab their attention for long enough to get your point across. This is why it also works well to aim downward and be referred elsewhere. Besides, the individual you are referred to will have been instructed to talk to you by their senior, so they are more likely to listen to your offerings enthusiastically.

Method 2: bottom-up sales strategy

This strategy involves reaching out to people in the lower levels of an organization. These people might find your offerings exciting and send that information up the chain.

This strategy typically works well when selling to salespeople. If you can make their lives easier or more productive with what you’re offering, they might even consider digging into their own pockets.

Method 3: direct to the most likely decision-maker

Another strategy is identifying an organization’s key decision-maker and addressing them directly. This method saves time, as you won’t need to be referred.

Now we know what an ICP is and how it can benefit your business, here are some examples:

Profile with personal information

This profile contains the most basic details about the customer, such as information about their background, their demographics, and their potential pain points when purchasing a product or service.

The data is superficial but enough to paint an accurate picture of the target audience. Considering few customers would be willing to spend time filling out a huge profile questionnaire, this is a great framework to use if you want to create a simple data profile.

Profile with abilities

Your company may believe its offerings can benefit everyone. That might be true, but not everyone is a perfect fit. That’s why it’s helpful to have an ideal customer profile that focuses on the perfect client while pinpointing features that suggest someone might not be a good fit. You can use it to prioritize where to direct your selling and marketing efforts instead of wasting time converting someone who isn’t likely to purchase.

Here are the five abilities to consider:

Need

Does the customer acknowledge the problem you can solve exists? Are they looking for a solution?

Time

Is there enough time to deploy the solution? Is there a buffer in case of the unexpected?

Success

Does the client have the experience needed to evaluate your performance positively?

Budget

Can the customer afford your profitable solution? Is there a financial buffer in case of an error?

Winners

Will decision-makers and influencers get a personal benefit when you’re successful?

Profile with customer’s interests

This example involves mapping out the customer’s interests based on behavioral, environmental, psychographic, demographic, and environmental factors. These include geography, work role, gender, interests, and age. Information like this helps devise a strategy for regularly reaching out to these customers.

An ICP template’s structure and elements don’t need to be set in stone. The main priority is focusing on the questions and answers that will help the teams make better decisions.

Specificity is needed, but it doesn’t necessarily need to be an demanding exercise. The crucial thing is revisiting the process regularly and using the same template each time. The type of customers you wish to attract will change as the business grows, so consider regularly updating the template.

Below is a list of ideas to guide you on the questions you should ask your customers. You might want to know their:

• Sector or industry

• Location

• Annual revenue

• Annual budget for the solution you offer

• Biggest pain points

• Current technology use

• Brand goals

• Preference between continuous support and one-off solutions

• Main reason for not buying your solution

• Buying process

• Industry publications, websites, or blogs that they follow

• Buying process

• Usage patterns

Below are nine elements of an ideal customer profile:

1. Target organization

Understanding the organization’s size will help you know who to approach for your profile.

Small companies have fewer decision-makers and smaller budgets, and executives usually focus on a few top priorities and pain points.

Meanwhile, decision-makers are spread across various departments and management levels in larger organizations. Their budgets are higher, but their sales cycle takes longer because multiple stakeholders are involved in decision-making.

2. Customer’s daily schedule

When you understand how customers structure their days, you can then identify ways to improve their lives with your product or service. You can incorporate these features into messaging as well as product and service development.

3. External market forces

Evaluate the market conditions and trends impacting your target customers. Contextualize your offering and demonstrate how your products or services follow and keep pace with these forces. 

4. Customer demographics

Although an ideal customer is usually an economic buyer or an end user, other influencers may facilitate or prevent the purchase. Therefore, describe and build profiles of anyone your product or service will impact.

5. Empathy

Empathy shows that you’re not aiming to sell but to improve customers’ lives. Understand what customers do, say, feel, or think to develop empathy. It helps you to understand how to motivate them to make a purchase.

6. Pains

When researching and creating an ideal customer profile, understand customer pain points in terms of their severity, urgency, and frequency. You’ll also need to understand the customer’s awareness of their pain points. This information will enable you to get an unparalleled context of their decision-making and help define your ideal customer versus a potential one.

7. Read, attend, follow

Understanding where your customers get their information is part of knowing them. Learn what they read, attend the same events as them, and look for an opportunity to talk to them directly. You can also follow their online and offline communities to know what information they consume.

8. Customer acquisition process

An ideal customer profile is incomplete if it doesn’t outline the customer acquisition process. 

Understand how a customer buys products from your business to improve the purchasing and overall customer experience.

9. Change you want to see in your customers

If you can change your customers’ lives in a meaningful way and demonstrate value, your product or service will be successful.

Besides solving your customers’ pains, also consider how they might want to think, change, feel, and act in the future. You can foster this through future thinking—i.e., knowing what clients want to become and developing the necessary innovations to get them there.

After creating an ICP, you should share it with everyone in a client-facing role. This process is about communicating how to attract and keep the best customers, prospecting to determine if someone is a perfect fit, and selling to understand the customer’s pain points and the goals they seek to accomplish. This is how you can move them through your product or service pipeline.

In financial terms, the ideal customer profile helps you understand your customers and create content and sales pitches customized to their needs. This improves your chances of closing sales, reduces customer churn, and ensures your resources are used effectively.

No. An ideal customer profile will help focus on the kinds of leads and accounts that are likely to be successful. In contrast, buyer personas help teams customize their efforts to particular demographics and habits.

Knowing the different types of customers can help a business develop successful strategies.

The five basic customer types are:

1. Loyal

2. Impulse

3. Need-based

4. Discount

5. Wandering