As a B2B provider, you likely already know you need to create an ideal customer profile (ICP). But a meaningful ICP is a complex creature. Executed well, it distills insights from a broad range of information into a straightforward guiding document. But the sheer amount of data available to businesses means that if you’re at the beginning of the process, it can be hard to know where to start.
An ICP is a key element in building sales and marketing strategy. But it goes deeper than that: your ICP can influence every aspect of your business, top to bottom. Because your ICP represents the highest potential returns on investment for your company, it can (and should!) affect every business decision you make.
All of that can make creating an ideal customer profile seem like a heavy lift with high stakes. Fortunately, it doesn’t have to be. You can find plenty of excellent templates and worksheets online that will help you focus your data collection and streamline the process of analyzing it.
We’ll link to some of those below. But in the meantime, if you’re looking for more detail about what goes into developing an ideal customer profile, here are the steps to get you thinking.
What is an ideal customer profile, and why does my B2B product need one?
The concept behind an ideal customer profile is to market smarter, not harder. The idea of “target audience” is similar, but distinct: it encompasses every potential buyer for your product in any possible use case.
An ICP, by contrast, represents the type of business that gets the most out of your product. These are the clients who are the very best fit for what you’re selling. In turn, they provide the most value back to your company, through a combination of financial readiness and dedication.
What goes into an ideal customer profile?
“Type of business” might strike you as a vague descriptor, and that’s because it is. The characteristics of your ideal customer will fall along certain predictable lines, but ultimately the details of that profile will be as unique as your product. Most ICP templates include aspects like:
- Industry
- Business size
- Budget
- Revenue
- Geographic location
- Needs/pain points
These are important pieces of information for your ICP to cover, but they don’t necessarily flesh out the full picture of your ideal customer. Some more nuanced characteristics might include who makes the decisions at the company, their financial readiness to purchase, or the company’s technology infrastructure—anything that impacts a company’s ability to take advantage of what you’re offering. Uncovering these details is part of the process of creating a robust ICP.
An ideal customer profile allows you to focus your investments—of sales and marketing dollars, product development efforts, and even logistical tasks—on businesses that will bring you the highest rate of return. These are the customers who have invested the most in your product. They rely on it for business operations, and are happy to pay for the value they receive.
The goal of creating an ICP is to amplify your business’ strengths and make the most of your efforts. Here’s how to do it well.
Identify your B2B product’s best customers.
The first step in creating your ideal customer profile is to identify what’s currently working in your favor. Pinpointing the customers who are happiest with your product, and who are bringing you the greatest financial value, will allow you to start identifying patterns that you can build on.
Start with customer satisfaction.
Begin by identifying your most satisfied customers. If you’re collecting customer review data or regularly soliciting feedback, use this information to find the businesses who have been consistently positive for the longest times. Look for customers who have recently upgraded their product or service. Also seek out customers who are acting as brand advocates on social media or within industry networks.
These are the customers who, in terms of Sean Ellis’ product-market fit survey, would be “very disappointed” if they could no longer use your product. Highly satisfied businesses are likely to stick with you for the long term.
That’s not just because they’re happy with the value they receive, but because they’ve invested a lot of tangible and intangible capital in your product. The product might be central to their key business processes, or solve a particular hurdle in a way no other product can.
But financial value is important too.
The other side of the coin is to identify the customers who are bringing the most value to your business. Financial measures like annual contract value and lifetime value will help you pinpoint the customers who have the budget and willingness to invest in you.
Using existing customer data, if you have it, is typically best. Building on the real, historical behavior of your customer base is going to produce results that are best suited for your business. But that may not be an option if your business is young or newly growing.
Whatever your business situation, think creatively about your high-value customers. If you don’t have enough data to gauge them based on longevity, examine those that have recently made new or upgraded purchases. Consider factors outside of pure financial spend that can still reap value, like high-profile partnerships.
Analyze your ideal customer data for similarities.
Find the intersection of your highly satisfied and high-value customers, and make a list. This select group of companies are where you’ll start identifying commonalities. By comparing them, you’re attempting to tease out insights into what makes a company a good candidate for your product.
Here’s where you can begin to dig deeper into the more nuanced aspects of your product’s fit. What was the sales process like for each of these companies? Do they share a particular organizational structure or approval process that meshed well with your marketing strategy? Maybe the companies share an unexpected business goal that they’re using your product to reach.
As you identify characteristics these companies share, you can begin to create the broad strokes of your ideal B2B customer profile. In a lot of cases, the insights you gather here will lead to even more questions. And that’s a good thing.
Dig deeper on your ideal B2B customers.
Use your network and your market research resources to follow up on the questions from your analysis. This is your opportunity to gather insights from your sales and marketing teams, and any other internal stakeholders who are part of your company’s relationship with the customer.
Conducting interviews can help you to better understand your customers’ pain points and priorities. Those interviews can be with internal employees, or, if the client company is amenable, with members of their team who can speak to the decision-making process.
You might even consider approaching businesses who didn’t choose to use your product. If they agree to speak with you, the conversation could provide valuable insights into where your product’s strengths lie and how it’s perceived in the marketplace.
Combine these insights with additional in-depth market research to add new characteristics to your developing ICP. On top of size, location, and budget, you may be able to include descriptors like the role of the decision maker who signed off on your product, or the media channels through which the customer found you. You might also uncover a fan-favorite benefit to your product that you hadn’t anticipated.
Create your ideal B2B customer profile.
You’ve collected quantitative insights on your ideal customers: size, budget, revenue, location, and more. You’ve also collected qualitative information like buying process, short- and long-term business goals, primary social media channels, and any other attributes that make your product uniquely suited to a particular business. Now, it’s time to put it all together.
Examples of ICP templates are not hard to find online. A good one will be informative while still keeping the information easy to digest. If you have a graphic design team, you might consider leveraging their expertise to create a single-page reference sheet that highlights the most important aspects.
That said, fancy design isn’t necessary for your ICP to do its job. A text document or spreadsheet works just as well, as long as you can communicate the relevant information across all levels of your organization. Then, your teams can begin using it to shape and unify their strategy.
Validate and reassess your data regularly.
Once you’ve created your ideal B2B customer profile, don’t just walk away from it. For you to reap the greatest benefits from it, your ICP should be a living document.
Check your results against the experiences of your sales and marketing teams. Additionally, as you begin integrating your ICP into your overall strategy, make sure to check back with these teams and confirm that the approach makes sense.
You should also regularly check in on the data that you used to formulate your ICP. Make sure that your high-value customers continue to reflect your ICP, and if not, use your customer data to adjust.
You can also validate the results of your ICP by measuring growth in contract value and lifetime value from your ideal customers. If focus on these customers results in increased revenue and customer satisfaction, then you’re surely doing something right.
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