An updated and data-driven Ideal Customer Profile (ICP) is crucial to the success of your organization. In our previous article, we broke down 4 specific reasons why a well-defined ICP aligns organizations on the companies and markets with the greatest opportunity. In fact, organizations with well-defined ICPs average 68% higher account win rates than those without. What follows in this article is a guide to redefining your Ideal Customer Profile.
ICPs are often poorly understood, inconsistent between teams, not focused enough or inadequately used and limited to powerpoint slides. In some cases, even when an ICP is developed, it can be difficult to find the “whitespace” of unknown accounts that meet that criteria. Additionally, there are significant changes in the market brought about by COVID-19 so it’s highly likely that even if your ICP is central to your strategy, it’s now out of date.
Here’s one way to Redefine your ICP:
1. Make a List of your Top Customers
The first step in defining your ICP is to identify your top customers. To do this, you must decide what characteristics you should use to rate your top customers. The term “top” is subjective; therefore, every department, including the executive team, should be involved in the development of your ICP.
Here are some common criteria to help you identify what your organization values most in a customer:
- ACR (Annual Contract Revenue)
- TCR (Total Contract Revenue)
- Retention Rate (or Customer Lifetime Value)
- # of Referrals
- ROI on your product
- Potential for Growth
- NPS (Net Promoter Score)
- Prominency of Brand
2. Identify the Common Characteristics
Once you have chosen your top customers, it’s time to identify the shared characteristics between them. These shared quantitative and qualitative characteristics form a fictional ideal customer, your ICP. The more commonalities you can use in your ICP, the more specific and effective it will be.
Only use characteristics that are relevant to your solution and why the customer bought it. For example, if you are in the B2B SaaS industry and you sell a CRM platform, the type of technology products a prospect uses is far more relevant than where they are geographically located.
The following is a list of characteristics that you can use to build your profile:
- Company Size
- ARR (Annual Recurring Revenue)
- Pain Points
- Decision Making Factors
- Technologies Used
- Spend on Products like yours
- Initiatives or Projects in Place
Dig Deeper with Technology Intelligence:
While traditional firmographic criteria can give you a general understanding of your customers, it does not provide the level of detail your ICP needs to help you target the right accounts, identify strategic intent, or craft a relevant and timely message that resonates with your audience.
Technology intelligence goes beyond surface level firmographics to give you valuable information regarding the technology footprint of your best customers. This intelligence is made up of three parts: Technology Installation information, IT Spend Intelligence, and Contract details. Here’s how you can use all three to strategically define your ICP:
- Technology Installation information shows you what products your accounts have installed, including whether or not they are using competitor products or complementary solutions. It also enables you to see what strategic initiatives they have in place or whether they’re an early or late adopter of technology products.
- IT Spend Intelligence shows you what your accounts typically spend in your product category. This way you can avoid wasting valuable marketing and sales resources on accounts without adequate budgets.
- Contract details show you when the products your accounts are using are up for renewal, allowing you to prioritize your target accounts at the most optimal time.
Here is an example of how a company defined their ICP. By using technology intelligence, in addition to traditional firmographics, they were able to dig deeper and identify exactly which accounts have the highest propensity to buy. This particular company knew that their best-fit accounts:
- Use competitive or complementary solutions
- Have an upcoming renewal or Cloud First Strategy
- Spend at least $50M on Cloud Storage
3. Compile Data
Now that you have identified your top customers and the commonalities between them, you can compile the information onto one document or into a template. This template should be circulated throughout your organization and actively used to guide the focus and decision making of all of your teams, especially sales and marketing.
4. Score and Prioritize
The final step is to score your accounts based on how closely they match your ICP. This step will reduce the total number of leads entering your pipeline, but it guarantees that the leads will have a much higher likelihood of converting. In order to score your accounts, you need to develop a best-fit rating rubric based on the relevant criteria you have selected. You may find that there are some characteristics that are so important that if an account does not have them, they can be eliminated immediately.
Once you have scored your accounts based on their fit, you will be able to prioritize your outreach. Prioritizing your outreach allows you to dedicate all of your sales and marketing resources to the accounts that best match our ICP.
Why You Need Tech Intelligence from HG Insights:
Technology intelligence from HG Insights gives you a unique and transformative understanding of which accounts are the best fit for your solution and thus have the highest propensity to buy it. With technology intelligence your sales and marketing teams can:
- Define your ICP much more accurately and with more granularity.
- Identify, prioritize, and engage the accounts with the greatest revenue potential.
- Avoid wasting valuable resources on the wrong accounts.
- Better address the market through more targeted messaging.
Let us show you how to use the most comprehensive technology intelligence in the industry to discover your true ICP. Request a demo: