customer profile planning

You may have heard of the “ideal customer profile,” or ICP, but do you know what it can do for not only marketing but sales and product development as well? In fact, it gets the whole company on the same page as to who exactly your company should target.

What Is The Ideal Customer Profile?

An ideal customer profile is whichever customer type you deem as valuable to target with sales and marketing resources – one that will benefit most from what you are selling and provide you with value in return. 

Your ideal customer definition will differ from another company’s definition, and it will likely shift as your company’s goals and priorities shift. This makes determining your ideal customer a regular practice, not a once-and-done effort. Forbes says that the purpose of writing an ideal customer profile is about “gaining agreement on who the buyer is and who it should be, depending on the strategic course of the company.”

Marketing, sales, and product development all have an ideal customer in mind when they do what they do. A marketer envisions who will most likely respond to their campaign efforts. A sales professional will tailor their pitch to appeal to a certain customer type. And a product developer will picture the user of their product as they design and build. All of these business units need to work together to determine and agree upon who they are targeting. This is the ideal customer profile. 

Why Is Finding an Ideal Customer Profile Important?

As a company, it makes sense to want to appeal to as many people as possible. The more eyes you can get to notice you, the better, right? Not exactly. Quantity doesn’t always equate to quality.

Get Customers You Want

What matters most is getting the customers you want, those who you can benefit and ones that provide value to your business. Your definition of value is unique, but beyond their purchase history, perhaps your company values customers that tend to actively promote and refer others to your business/product/service. Maybe they are self-sufficient and require little support. 

Related: 4 Ways to Connect with B2B Customers Using Data-Driven Personalized Marketing

We can break that down by your type of business, as well. If you are a B2B business, you may value customers who are in a certain industry or geography, have a certain number of employees or annual revenue, use a specific technology, and/or have a certain customer base. For a B2C business, your ideal customers may be a specific gender and age, earn a certain minimum salary, and purchase higher-end items. 

Focus Your Efforts 

If you want to create effective, targeted marketing campaigns, you have to know who they’re for. Otherwise, you’re just guessing and will waste resources focusing on the wrong people. The more accurate you can be when you write your ideal customer profile, the more successful your campaigns will be. You’ll have a better chance of winning customers, driving greater revenue and growth.

Keep Your Existing Customers Happy

Creating and using a profile not only helps with bringing in new customers, but it also helps with retaining the ones you have. Customers repeatedly say that they prefer companies that are able to personalize their experience. 

The only way to create personalization is to know your customers. Ideal customer profiles aim to do just that: categorize customers based on their value to the business, and then target them with highly-relevant content. Again and again.

These customers, happy with how your company is engaging with them, will then refer others to your brand. This unpaid advertising is the best kind, the holy grail. A staggering 93% of consumers say word of mouth is the primary driver of a purchase decision. Referrals drive some of the highest conversion rates among all marketing channels.

Business leaders, too, frequently prefer a referral before purchasing. A customer who is happy with your business, product, or service is likely to refer you to one of their contacts in the same field – one who may fit your ideal customer profile and user persona. 

How to Identify an Ideal Customer Profile

The key to creating a profile is to look at your existing customers first to find commonalities among the best ones. Then, work with other stakeholders (sales and product development, for example) to put together a profile that combines those characteristics into an “ideal” customer to target for a specific purpose. 

An ideal profile is not a customer persona, even though they are often confused. While developing customer personas are equally essential, they are each derived by a separate approach and each serve a different purpose. The profile is based on real companies or consumers that you want to target with your sales and marketing initiatives.

You will construct your user personas using what you know about your ideal customer. They typically come after you understand your ideal custom profile. 

A good way to think about it is your ideal customer profile is the broad type of customer you want to target (companies in the B2B telecom industry, for example), and your user personas are specific examples of people within that group (Anne the CTO). If your target audience are consumers, your ideal customer example may be consumers of a certain gender and age range, and your user persona would be Anne the millennial mom.

You and your cross-functional team will determine which characteristics are the most important. The profile shouldn’t be too broad or too narrow. The goal is to create a profile that includes just the right amount of potential customers for whatever you are trying to achieve. Everyone in your company should be able to quickly and easily understand and be able to imagine who the ideal customer is, and is not.

In order to create an ideal customer profile, you need to:

  1. Inventory your best customers
  2. Compare common characteristics
  3. Prioritize most valuable characteristics

Inventory your best customers

Take a look at the customers you have and share customer data with other business units. Based on all of the data out there, which customers does everyone agree is high value? Your list size will depend on your customer base, but ideally, shoot for a list of five to 15 customers.

Related: 5 Ways to Better Leverage Your Data in 2021

You can easily see what they pay you, but do you know why they value your company? What benefit do you bring them? Don’t make assumptions. Ask them. Call them, email them, create a survey – whatever you need to do to understand why they are a customer.

Compare common characteristics

Once you have your list of best customers, it’s time to do a side-by-side comparison, brainstorming questions you can ask about each customer. What attributes do they have in common? 

Start broad and then go granular, even listing random questions and characteristics that may not seem to have relevance. If they share it, it matters. Don’t worry about how long your list is. It’s better to have too many attributes at this stage than not enough.

Prioritize most valuable characteristics

Now, it’s time to determine what matters most to your company. Narrow your list of common characteristics to no more than 10 that are the most valuable. By the end of this practice, you should see a profile emerge, one that provides clarity as to who your ideal customer is for the situation you are solving for or a business goal.

Remember that your ideal customer definition should be based on real customer data, not opinion or an agenda. It is objective, quantifiable, and specific. Use nouns and verbs instead of adjectives to describe your ideal customer. Adjectives are best left for user personas. You will likely need to evaluate and test your definition across teams to see if it accurately depicts your target audience. Refine your definition until everyone agrees. 

What to Do Once You Have Your Ideal Customer Profile

Once you have an agreed-upon ideal customer, the sky’s the limit on what you can do with it. Compare the profile with the rest of your customer base and prospect funnel to get a clearer picture of your risks and opportunities. Leverage your definition further by developing specific user personas. 

As a marketer, your team can now focus efforts on targeting a specific audience with personalized content. As a sales professional, you can focus on optimizing your value proposition and strategy for this specific type of user. And as a product developer, you can concentrate on features that benefit one type of user. With an ideal customer profile, everyone has more confidence that their efforts are hitting the mark.

Creating this profile takes time, data, and teamwork. Keep in mind that it is essential the profile adapts to changing priorities and goals. You can always refer to your “best customer” list and go from there, remembering to consider new customers as they come in. Take the time to understand why the business may have lost existing customers. That kind of insight is just as valuable.