Like most business owners, you know that your target market is important. But what exactly is a target market? And how do you find one for your business? One of the best ways to define your target market is by creating an ideal customer profile. What is ICP in business and how can help boost revenue?
In this guide, we’ll show you everything you need to know about ICP in business and how to develop effective buyer personas.
What is ICP in Business and Why Does it Matter?
What is ICP in business? An ideal customer profile is a representation of your ideal customer.
Knowing your audience is important. You wouldn’t tell the same event story to your mother as you would to your friend, would you?
You may complain to a colleague or friend if you are frustrated with work.
“I’m disappointed that Janice is leaving, but I understand that things happen. I’ve been added as a co-lead on the social media project that she messed up, and pretty sure she’s not going to make it easy for me.”
But when talking to your mother, you’d probably give a less detailed recap of the situation.
“Our team leader is leaving us and me with a project they didn’t finish.”
We intuitively know how to adjust our message depending on who we’re talking to.
In the marketing world, it’s the same way we connect with our audience.
In sales, ideal customer profiles (or ICP) are descriptions of who your ideal customers are. They help you define who you should target and who you should avoid.
Many marketers struggle with understanding their current customers and identifying the types of customers they should target.
Why ICP Matters
According to Gartner, the ideal customer profile defines the firmographic, environmental and behavioral attributes of customers expected to bring value to a company.
The main goal of creating an ICP is to focus on prospects most likely to do business with your company.
These valuable customers are the bread and butter of any successful company. Companies that invest in defining their ideal customer profile (ICP) see an increase in conversion rates, market share, and customer satisfaction.
HW Media’s study conducted with SOAR Performance Group found that an ICP is a top priority for businesses when planning their marketing strategy for 2022. All of the responding firms had a defined ideal customer profile, indicating the importance of this tool in developing a successful marketing plan.
Despite this data, 60% of sales and marketing teams prioritizing their ideal customer profile still experience low conversion and longer sales cycles.
Gartner’s research indicates that many companies either don’t understand the concept of an ICP or haven’t properly defined it. Even when companies have a defined ICP, it’s often only used in marketing materials or during new employee orientation.
Any sales professional will benefit from having an ideal client in mind regardless of the product or service they’re selling.
Why You Need to Create ICP Before Creating a Buyer Persona
An ideal customer profile is not the same as a buyer persona. You may want to develop several buyer personas, but not until you have identified your ideal customer profile.
Creating a buyer persona helps you get inside the head of your end-users to understand their needs and how they interact with your product. This understanding can then be used to craft your messaging, campaigns, and even new features.
In short, buyer personas are essential for creating a successful product.
To create accurate buyer personas, it’s important to understand who your “ideal” customers are.
So, first, focus on the type of company you want to work with, and then, once you’ve identified that, you can narrow down your specific personas.
How to Develop an ICP
The ideal customer is willing, able, and able to buy your solution. They will likely succeed with your product, increase your profitability, refer others, and even become brand advocates.
Let’s get to work. This step-by-step guide will help you create your ICP.
Here are some questions to consider when developing your ICP. Asking these questions can help you refine your target audience and hone your marketing strategies to engage them more effectively.
- What are their business values?
- What are their short-term goals?
- What are their long-term plans?
- What challenges might they have to overcome in achieving these goals?
- What are their biggest pain points?
- What impact do these problems have on operations?
- What is the ideal solution for these pain points?
- Is your product or service able to address this problem?
- What’s the biggest obstacle that your prospects face in buying your product or service?
- How can your product or service help the company?
- Does your product seem suitable for this kind of business?
- Where can they research before buying (blogs, websites, or elsewhere)?
- Is your content clear and easy to understand?
To target better leads, use your ICP
Once you’ve created an ideal buyer persona, you can use it to generate leads with the same qualities as your ICP. You can also use it to create targeted marketing campaigns.
We recommend that you compare the ICP with your existing customer base, prospects, and churned clients to see if there are any patterns.
ICP in Business: How to Refine Your ICP
One way to further refine your ideal customer profile is to look at your successful customers.
Try to gather as much information as possible such as their buying process, personal experience, pain points, and how your product solved their problem.
You can further refine your ICP by:
- Reviewing customer complaints
- Evaluating website traffic
- Assessing financial reports and data
- Identifying patterns
Your ideal customer profile is a business that is easy to transact with and would continuously benefit from your product.
It’s important to understand who your sales reps will be talking to. This is where a clearly defined buyer persona comes in.
Conclusion: ICP in Business
If you’re looking to create buyer personas for your business, it’s important to understand what is ICP in business. This guide has shown you how to develop effective ICPs and buyer personas. With this information, you’ll be able to create sales and marketing strategies that target your ideal customer.