When it comes to managing a go-to-market strategy, there is a lot to consider. You know your market, and you’ve worked through segmenting your total addressable market. You’ve even built out useful, non-fluffy buyer personas. As your strategy matures, the more your ideal customer profile (ICP) becomes crucial for investing and executing on programs that are the perfect fit for your products or services and that continue to align to the relevant characteristics and problem statements of your target accounts.
Not sure if you’ve maximized your ICP – or looking to create one in the first place? We’ve got you covered. This best practice will explore how to define your ICP – and why getting it right matters.
What is an ICP and Why Does It Matter
The strategic process of establishing your ICP happens AFTER you have done enough research to understand the market you compete in and BEFORE you begin to build out your buyer profile and personas. The two essential elements included in defining your ICP include an in-depth understanding of what makes a customer both a good fit for your offering and second, what is a financial fit between how much the value a solution and the profit margin within your price. (Hint: It’s vital that they are both).
“A well-defined Ideal Customer Profile coupled with true-go-to market orchestration yields increases on average of 40%.” Justin Gray, CEO & Founder of LeadMD
Dialing in your ICP is part of the foundational structure in building out the rest of your go-to-market strategy. It sets the standards that will guide you in developing your buyer personas, buyer process, and account segmentation. These strategic processes are arguably the most critical elements of defining and shaping a go-to-market strategy. They allow an organization to identify what accounts need to have coverage in the market, the most effective way to cover the market based on segment need, what accounts should be prioritized and deprioritized and finally, what messaging and tactics will have the most impact.
How Do You Create an ICP?
Ready to get started? First, determine who within your organization needs to be involved. We recommend meeting and interviewing stakeholders from sales, marketing, customer success, and product departments. Be diligent and clear when comparing the differences in viewpoints among departments and keep the dialogue open and collaborative. Start with a discussion around your existing customers that the collective group would define as a success for your organization. (Don’t worry, you’ll be collecting data for these as well, so keep the dialog nice and open during this stage.)
Once you’ve gathered these insights, review all of your customers and understand what about them makes them a good fit. As soon as you’ve drawn common lines between some of these accounts, you can begin to evaluate them for the following commonalities:
- Is there a common industry?
- What is the average company size?
- What is their annual revenue?
- Is there a known budget for your category?
- Do they have a complimentary product in place already?
Now comes the fun part! Taking both the quantitative and qualitative data you’ve collected, you can now build out an ICP model. It doesn’t have to be quantum physics to adequately identify or predict which customers are a good fit for your offering. We recommend having a model for a pure product fit and another for potential value, that when combined, these two outputs produce a composite model that will allow you to identify your ideal customer profile.
Putting Your ICP Into Practice
Now you are ready to put your ICP into action. Taking your ICP and applying it on the companies (B2B) or people (B2C) in your total addressable market will allow you to start making informed decisions on how you go to market. Virtually all organizations operate with a limited pool of resources and having a clear definition of your ICP will position you to invest those resources against targets that will yield the highest likelihood to close and represent the most substantial financial value for your organization.
Share your findings with the entire company – and don’t forget to pull in all collaborating departments to celebrate these findings. Establishing your ICP is a big win across the whole organization.
Need Help Getting Started?
We find that most of the organizations that don’t have their ICP established yet struggle the most with carving out the resources required to get the strategy off the ground. After all, you’ve got to keep the day-to-day operations running. That’s where we can help! LeadMD applies our Revenue Acceleration Framework to guide ICP development, ensuring that your strategy, process, and tactics are built for success. Take the first step with a free revenue acceleration assessment, and we’ll help you find where you are performing at peak, and where the engine needs a little jumpstart.
Meet Ian Michels
Ian was first introduced to digital marketing and martech while in the non-profit industry. This introduction sparked a flame that quickly became a thirst for learning leading him to explore the world of opportunity in the digital marketing space. He crossed paths with LeadMD and applied to Marketemy and graduated in the program’s inaugural Class of 2018. After a summer of being immersed in the world of digital marketing, helping organizations get the same value out of their marketing investments, he knew this was the career he had always dreamed of having, so he jumped the ship from the non-profit sector and joined LeadMD as a full-time Marketing Associate. Ian is passionate about learning all he can about digital marketing, technology and innovations that help marketing departments grow their organizations. He wants nothing more than to use this knowledge to help others increase revenue and inspire growth in their passion areas. Ian is married to Katelyn and they have a little girl. In his free time, he loves going on dates with his wife, wrestling with his kiddo, spending time with family, going to the gym, and/or reading a book in a quiet place.