The acronym for Ideal Customer Profile is used to name the profile of customers who present the ideal situation and characteristics to be satisfactorily served by the company’s solution.
It is a profile that fits into an account, not just a buyer, a decision-maker for a company’s acquisitions, or an end-user.
In fact, ICP is a tool widely used by companies that use Account-Based Marketing (ABM). In it, the acquisition of new customers is based on specific and well-targeted groups that can be brought together in a common account.
That is, the company and its commercial teams can be divided into different segments, increasing the level of knowledge in each of them.
The concept of ICP seems similar to that of the buyer persona or that of the target audience, doesn’t it? So let’s understand what are the differences between them with the help of some concepts and examples.
ICP has a more sales-oriented focus and, with its information that complements that brought by the target audience, allows communications and approaches to be more aligned with the needs and reality of the leads.
In this case, the same company could define its ICP as follows: CrossFit academies in Belo Horizonte, aimed at the female audience, with 500 students or more, monthly revenue of R$100 thousand and potential to become franchise chains.
Note that, in addition to the information that already existed about the target audience, ICP brings complementary data that help to personalize the approaches, such as:
- adopted segmentation;
- business structure or capacity;
- market performance;
- market maturity.
Making a commercial contact with such data allows you to work on the lead’s pains and needs with much more ownership and certainty of the connection with the solutions that the company has to offer.
Also, talking to who can make the decision is very important. This starts with the definition of ICP, which considers:
- who is the decision-maker;
- what is your position and the relationship with your academic background, for example, a doctor responsible for a clinic or hospital;
- what is the company’s segment, technologies, social networks and systems used by the lead, both the company and the decision-maker;
- participation in sector events;
- number of subordinates;
- working time in the organization;
- among other issues.
Why create an ICP before the persona?
The persona is an extraction from the ICP, which, in turn, should be considered a guide to be followed in Content Marketing strategies that will optimize the acquisition of new customers.
In other words, the most specific data identified from the Ideal Customer Profile will be the parameters for creating the persona.
Thus, when describing it, the points that determine the ICP will be in its composition and will allow the contents and actions created from the persona to be more personalized and realistic.
How important is ICP for sales and business success?
So, let’s summarize this far: the target audience is the segment of the segment where potential customers are gathered. ICP and Buyer Persona filter this information to improve the focus of the business, and while the first indicate who to look for, the second points out how to do this efficiently.
The persona, in turn, is a marketing tool that precedes sales actions and uses ICP as a reference to create a content funnel capable of filtering and qualifying leads, right?
So do ICP’s functionality and importance come down to justifying the creation of the persona? Of course not, and here I list your most relevant contributions.
The efficiency of the sales approach
Let’s be honest: it is much easier to talk to someone you already know and who has pains, demands, weaknesses, and routines with which you are familiar, and to convince him than to negotiate with someone who even demonstrates some compatibility with the product, but it is a commercial unknown.
Using ICP, you and your company can approach the leads whose needs will be met by your product, thus generating a valued relationship.
It is as if the offer is designed for that customer profile, which makes it much easier to target the approach. Since each salesperson’s time is finite and it is not possible to embrace the world, it makes perfect sense to talk to the leads who are most likely to convert.
Reduced sales cycle
The Ideal Customer Profile allows the sales team to be more certain about the leads that must be approached within the base that was created.
All language and arguments are aimed at those who are most compatible with the offer.
By comparing each lead with the ICP, the company can assess whether the characteristics and the situation presented are similar to the ideal profile drawn, which would increase the likelihood of conversion.
In addition, as the ICP also provides the decision-makers indication, the time to find out who is responsible and negotiate with him is much less.
Conversion rate increase
If you know who you want to talk to, what to say and how to show that your solution will add value to the lead, the chances of conversion are much greater.
And, in addition, if the sales cycle is shortened, the sales team can also improve its approach performance by spending less time on each negotiation.
It is very important to emphasize that the agility here is based on efficiency – and not on the lack of attention to details – and on customer satisfaction.
Lifetime Value Optimization (LTV)
Another natural consequence of using ICP is the conversion of more customers who will be satisfied with the products and services offered.
That is, after the successful conversion, all stages of execution and relationship will be facilitated and customers will have satisfactory experiences and will be engaged with the company and its products.
The LTV , an indicator that tracks the period in which customers remain commercially active, will also be extended, which, incidentally, will also move other performance indicators (KPIs):
- Churn: which tracks the number of cancellations or returns, will reduce;
- Customer Lifetime Value (CLV): which measures customer value over time, will also be optimized, since the costs invested to achieve it will be diluted for a longer period, increasing the profit generated;
- Return On Investiment (ROI), which points out the relationship between the amount invested to win the customer and how much he has earned for the business, will also be improved, as commercial efficiency will also be enhanced.
In short, the best way to summarize the importance of ICP is to say that it increases commercial efficiency right at the beginning of the process, at the capture stage, and, as a chain reaction, it optimizes the later stages of the sales journey and the relationship.
How to create an ICP?
These benefits are unquestionable and you would certainly like to bring them into your business, right?
So, here I list some tips and good practices with great results in the creation of your company’s ICP.
Get the most relevant information about the lead
Identify what is the minimum necessary lead information for the sales team to work on, which includes the name of the decision-maker and your contact email.
In addition, knowing relevant questions about the timing of the lead is also important to provide a good basis for the conversation.
To do this, reflect on the following:
- Is that contact someone relevant within the structure of the potential customer? What sets it apart?
- What information obtained fills the eyes and facilitates the actions of those who are prospecting?
- Is the lead a decision-maker? What is your profile or position? What are the chances it offers to close the sale?
Map lead pains and needs
Survey the pains and dilemmas experienced by the lead before making the first approach. Thus, it is possible to prepare the arguments to circumvent any objections that may arise.
It is common in the market for people to follow a certain type of behavior in relation to the solution that your company provides, even saying that it does not need that or that the product or service is not compatible with the budget it has, even before starting a negotiation.
Find out what the ideal customer profile of your business is
After understanding the profile of the ideal client, it is important to do the reverse exercise, that is, to point out certain characteristics that could harm the results.
Such references will not exclude a lead but will serve to guide the sales team in identifying opportunities with low returns and high negotiation complexity, which, at that moment, will only make the team waste time.
It is possible, for example, to raise the objections and characteristics that show that the commercial relationship will not go ahead, ensuring that the sales team’s attention is directed to the best opportunities.
Even so, it is important to assess what the lead’s pain is and find explanations for the fact that he was unable to solve it at that moment.
Offering content to educate you about future improvements can keep that opportunity on the radar, allowing it to be worked on later.
In fact, nurturing potential customers is among the main objectives of Content Marketing strategies, as 40.5% of companies reported in the Content Trends 2018 survey, did you know?
Use business performance indicators as a reference
The customer base is an important source of information for the definition of the ICP and, mainly, the performance indicators.
Finding out which customers have the best LTV and conducting an in-depth study of their basic and specific characteristics is a good way to rationalize the process, that is, to stop assuming, rather, to define by means of data.
It is in the customer base that real data of values, length of stay of the customer, profile with better exploitation, sales, and margins will be found for the definition of the ICP. But, what if such data does not yet exist?
It is a situation that can happen with companies that are starting their operations, entering a completely different market, or that have never followed their performance in a systemic way.
How to identify the Ideal Customer Profile of a company that does not yet have customers?
Without more specific data to be used in the formation of the ICP, the company can use the information of its target audience and some inferences to create a prototype of the Ideal Customer Profile.
After it has been put to run, being the main gear of both the sales team and the marketing team, it can be corrected gradually.
In fact, an ICP will never be perfect and I recommend that it is always updated when sales conversions are not as expected.
The more detailed the description of the ideal customer profile, the more efficient it will be to capture leads with greater potential for conversion and loyalty. It is the translation of the maxim that quality is better than quantity in attracting new business.
So I have a great offer for you and your company: a free process for defining the ICP of your business, which is as valid for those who already have data and indicators, as well as those who need to start from scratch.
