A framework for identifying and communicating your ideal customer profile
And why it’s important
No one can afford to target everyone. Identify your ideal customer and tailor your product(s), messaging, and positioning accordingly.
Who are your customers? I mean beyond the logos, who ARE your customers — especially your most successful ones? What characteristics do they share? Is it their geography? Their market/industry? Their needs/pains? Their beliefs? These and other characteristics combine to form a profile of your ideal customer — your Ideal Customer Profile or ICP
Whereas personas typically refer to an individual buyer or user of your product, your ICP refers to the companies who are most likely to benefit from and buy your product, solution, or services. And like your personas, your ICP should be a living, breathing “definition” that you’ll come back to — and modify — often.
The ICP is a critical, strategic document that guides key downstream efforts. It informs everything from the features and functionality you build in your products to the very words you use in your messaging to how you position your product in the market. It will also allow you to focus your resources on the prospects who are most likely to become successful customers in the future. Your ICP will increase the likelihood you will end up with satisfied customers who will remain with you over time and through multiple contracts.
The goal of the ICP is to identify the accounts most likely to become high-value customers. The speed with which your team clearly understands who is a good fit and who is not a good for your offerings has a major impact on productivity and ultimately success.
Ignore your ICP at your own peril
The further your team gets from the ICP, the more likely your metrics will suffer:
- The sales team has to continually translate product capabilities into who fits and who doesn’t. This is typically done by trial and error — wasting time, resources, and opportunities and increasing the sales cycle and cost of sales.
- Going after prospects that are outside of your target market is likely to result in lower win rates.
- Any ‘wins’ will potentially stretch the capabilities of your solution and your customer support organization — wasting resources to fix deficiencies and potentially lowering customer satisfaction.
- Similarly, customers that you do manage to acquire that are outside of your ICP are less likely to activate. They may sign up for your service. They may install your app. But will they actively use your app? Will they be engaged users?
- If your customers are a bad fit and unsatisfied despite your best efforts, they will probably eventually leave thereby increasing churn rates.
Creating your ICP
OK, I get it, I need an ICP to focus my sales resources, positioning, messaging, and content to attract (and keep) my best customers. But how do I create one? The process can actually be as simple as three steps:
- Identify your top N customers.
- Figure out what makes them your best customers.
- Compile and communicate your ICP.
Who are our best customers?
“Best” can mean a lot of different things depending on your business, your products, and other factors. How many you choose before establishing a pattern will also vary. Are you a high-volume sales organization, or does each individual account have a high average value? Consider some of the following:
- Which were the most profitable?
- Which have been with you the longest?
- Which deals closed the fastest?
- Which customers have purchased multiple products/services from you?
- Which were the easiest/quickest to implement?
- Which customers/projects were the most exciting or fulfilling for your employees?
- Which have the highest satisfaction or NPS (or similar) scores?
Why are these our best customers?
What do your best customers have in common? This can include both qualitative (interview them) and quantitative (mine your systems, use surveys) data.
- Do they come from a few industries?
- Do they have similar problems that you are solving?
- Are they located in a particular geography?
- Are they a particular size (head count, revenue, etc.)? Stage (startup, growth, mature/public)?
- Do they have a particular existing technology stack? Or lack a particular technology?
- Are they early adopters? Innovative? Or risk averse?
- How do they make decisions? Do they always require an RFP?
Pond Maps — a framework for identifying and communicating your ICP
Creating an ICP is not an academic exercise. It is a practical plan for action. Once completed, it must be shared across the entire organization. A Pond Map is a framework and an artifact to both identify and communicate your Ideal Customer Profile. It provides a single picture of who is a potential fit (in the pond where you should go fishing for customers), and who is not a fit for your products (where you should not be casting your line).
The general Pond Map structure includes five categories — Account Profile, Needs, Urgency Drivers, Beliefs, and Tipping Point. More on each of these below.
Negative factors — those that would lead us to determine a prospect is “out of the pond” or a poor fit with our products and services— go above the line. Positives factors — those indicating a good fit or a prospect that would be considered “in the pond” — go below the line. The negatives go on top because we really want to make sure we understand and highlight factors and characteristics that would make for a poor fit. Let’s not waste resources chasing prospects that are not likely to be successful.
To further reinforce this idea, negative factors are categorized in two ways:
- STOP = Out of the Pond. These are factors that will immediately deem the prospect a poor fit, unless it’s something we can reasonably expect to change.
- YIELD = Problem or Key Objection. If we handle the problem/objection appropriately, they are in the pond. If we fail to do so, they are not a fit.
Fill out each section of the Pond Map with the following information (negatives listed first followed by positives):
- Account Profile: Start with the easy information. What are the attributes we should look for to tell us we should probably not be fishing in this pond. Many times this information can be gleaned from external sources before we ever invest any selling effort into the account. What are the characteristics that indicate they would be a good fit for your products? Things like location, public vs. private, company stage, incumbent or core technologies, revenue, budget, head count, and other externally-identifiable characteristics.
- Needs: Your product can’t be all things to all customers. Your customers have needs. List those that your solution cannot meet and would therefore indicate a poor fit unless you can somehow show the prospect why these attributes are not important or not in their best interest. Conversely, list the most important needs that your solution does or can meet.
- Urgency Drivers: What are some indicators that the ‘at rest’ inertia is going to be a problem? What are some of the indicators that there is appropriate urgency to take action? What will cause the organization to take action to solve ‘longstanding’ problems when they have not taken action before?
- Beliefs: Which Beliefs are problematic? The negatives (and whether they are stop or yield) are especially critical indicators here because you need to know which beliefs might be possible to ‘adjust’ and which tend to be intractable. What are some of the prospect’s beliefs which make them a good fit? Use quotes as much as possible to capture the spirit of the beliefs.
- Tipping Point: These are the most critical negative and positive qualifiers. These are the things to keep top of mind that we don’t want lost in all the other detail of the Pond Map.
When you put it all together, this is what it looks like.
Here is an example of a (partially fictitious) Pond Map.
Some deals are easier to identify and faster to close. Some customers are likely to be more successful than others. Some customers will expand their use and renew their contract year after year. And some customers will shout their love for you from the mountaintop. And none of this is by accident. These are your ideal customers — the ones you should be seeking, nurturing, and winning over and over again.
Pond Maps are just one process and tool for identifying your ICP. Just as there are numerous sales and marketing methodologies — Pragmatic Marketing, SiriusDecisions, Miller Heiman and others — there are plenty of ways to map and communicate your ICP. Find what works for your organization and use it!