Attracting and converting customers takes time, money, and effort. Therefore, having a strategic goal and guideline is important to work effectively and deliver the best results.
Understanding the ideal customer profile (ICP) can be a good starting point for creating attraction marketing. An ICP helps inform brands who to attract and avoid guessing prospects for sales and marketing campaigns.
This article will explain the definition and benefits of ICP marketing and its comparison with a buyer persona. We also discuss how to create an ICP to speed up your business’s lead generation.
What Is ICP Marketing?
An ICP refers to a detailed description of a perfect customer. It’s common in account-based marketing when a business focuses on selling to specific targeted accounts.
The benefits of implementing an ICP into a marketing strategy are:
- Save time and money. Reduce time wasted on leads that won’t result in conversions.
- Grow revenue. Create specific sales campaigns based on the ICP to increase sales because personalization influences 80% of consumers’ decision-making processes.
- Boost loyalty. Besides shortening the sales cycle, an ICP can increase satisfied leads, resulting in more repurchases and referrals.
Ideal Customer Profile vs. Buyer Persona
Many people confuse ICP with buyer persona (BP) because they both describe ideal buyers. However, their purposes are different.
An ICP is primarily used in business-to-business (B2B) companies, so it focuses on the characteristics of target companies.
Meanwhile, a BP applies a business-to-consumer (B2C) approach and digs deeper into individual buyers, including demographics and behavioral traits.
The ICP is also more sales-oriented and provides a guideline to find an ideal lead at the beginning of the sales funnel. Meanwhile, a BP helps you understand customers and tailor messaging in all marketing funnel stages.
How to Create ICP to Gain More Customers
Below are five steps to make an ICP for your company.
1. Research and Gather Data
Review your current market base using a customer relationship management (CRM) tool or sales tracking software.
Then, check the customers’ firmographic data, including:
- Organization size
- Growth and performance
- The product or service the company bought from your business
Consider narrowing your options to help filter the ideal customer quickly. For example, target film production companies as opposed to all media-related businesses.
To help identify the correct industry name, look at industry code lists such as Standard Industrial Classification (SIC) and The International Standard Industrial Classification of All Economic Activities (ISIC).
2. List the Best Customers
After identifying existing customers, rank them by their impacts on your sales development.
Here are some factors to consider to help list your best customers:
- Highest retention rate. The percentage of clients who continue purchasing a product over a certain period.
- Highest customer lifetime value (CLV). The customer’s total spending on your products or services.
- Highest net promoter score (NPS). The measurement of customer advocacy and loyalty that determines how likely customers are to participate in online reviews and recommend your company. This metric is useful for businesses running loyalty programs.
3. Look for Patterns
When listing the best customers, you may notice common characteristics.
Use this list of questions to find out similarities among your business’ best customers:
- Are they in the same region?
- Are they in a similar industry or niche?
- Did they receive funding to help them grow this year?
- Are they startups or corporations?
At this point, the more data you have, the more accurate a pattern will be. Similar characteristics can act as the foundation of an ICP because they represent prospective and ideal customers.
4. Analyze the Lost Opportunities
Creating an ICP focuses not only on successful conversions but also on customers that don’t advance in the sales pipeline.
Before deciding the ICP, look at the lead generation data and check the number of leads that don’t result in appointments or purchases. Then, consider contacting these customers and ask for the reasons why they choose not to proceed with your product or service.
This process helps to determine the bottleneck in the sales funnel. Some possibilities include:
- The products don’t fit the customers’ criteria.
- Your sales agents made a mistake during the negotiation process.
- The clients do not fall exactly within your niche or industry.
5. Determine and Create the ICP
Based on the analysis above, make a best-fit rating to see how well a target company or customer aligns with your ICP marketing. This helps your sales team set priorities when identifying future target companies and leads.
Here’s an example of an ICP rating system for a camera company based in France:
- Best Fit. France-based video production companies with more than 200 employees.
- Good Fit. European media companies with over 100 employees.
- Bad Fit. Companies outside Europe with fewer than 100 employees.
You may also sort the companies based on their time zones. For example, if you target the US, create a contact database organized from the East Coast and move westward. That way, your sales team can have convenient time slots for outreach and appointments.
Compile client data for the ICP on a spreadsheet and then import the file to a CRM tool. If possible, organize the contacts directly on the CRM or sales tracking software.
An ICP describes the perfect customer for your business. It helps target the right clients so you can save money, time, and generate increased revenue and loyalty.
An ICP is different from a buyer persona because the former applies B2B sales and analyzes a client company’s characteristics rather than individual consumers.
Follow these steps to develop strong ICP marketing:
- Research and gather data from current customers.
- List the best customers based on a particular metric like retention rate.
- Find similarities from top-rank clients.
- Check lost opportunities to improve your strategy.
- Analyze the data on a spreadsheet or CRM software to determine your ICP.
Note that your ideal customer type may change as your business grows and the industry changes. Therefore, tweak the customer profile regularly and match your sales strategies with the latest trends.