5 reasons you need an ideal customer profile (ICP)

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A post from the POLISH YELLOW PAGES® blog (formerly DATABOT.PL), originally published on 10.11.2022. Some information (tools, prices, regulations) may have changed since then.

Five reasons you need an ideal customer profile in B2B

Sellers and buyers alike understand how complex the B2B sales environment is. B2B deals are notoriously hard to close and often expensive for sellers because of several specific obstacles. First of all, B2B buyers are more sophisticated; they prefer to work with a seller prepared to analyse their business and grasp the ins and outs of their problems rather than simply sell them a product. Besides, large organisations are known for long buying cycles, which is a barrier in itself and also delays attempts to reach other buyers.

So as a B2B seller you have hard work to do. The good news is that with a well-rounded Ideal Customer Profile (ICP) you can reduce the risk of wasting time on accounts that have no real chance of converting. In this article we look at why identifying your ideal customer profile is essential and how to do it effectively. If you want to understand who your most valuable customers are and how to win their business, read on.

What is an ideal customer profile?

In short, the Ideal Customer Profile (abbreviated: ICP) represents the most valuable buyer of your product or service. It is a hypothetical business that has all the characteristics that make it a perfect fit for your company’s solutions. Unlike targeting the entire addressable market, creating an ICP allows highly personalised communication and prospecting of companies that match your solution perfectly. In other words, an ICP is a method of segmenting the market to find the best accounts – the companies you want to land and nurture.

You may be wondering, though, how an Ideal Customer Profile differs from a buyer persona, since it all sounds more or less the same, right?

Below we solve the puzzle.

What is the difference between an ideal customer profile and a buyer persona?

Although the ICP and the buyer persona seem similar at first glance, they are in fact two different but critical account-based marketing instruments. The Ideal Customer Profile in B2B focuses on account fit – the companies most likely to buy from you and deliver a high return for your business. A buyer persona, on the other hand, describes the people involved in purchasing decisions in the organisation that makes up your ICP.

Essentially, the Ideal Customer Profile zooms out to the whole company, its goals, challenges and firmographic attributes. The buyer persona, by contrast, focuses on the characteristics of decision-makers, so your marketing and sales team can be laser-focused and tailored to prospects’ unique needs.

Five reasons you need an ideal customer profile in B2B

More than 78% of B2B companies identify high-quality leads as their main goal, so creating an ICP is not something to take for granted. Here are five reasons why:

With an ICP you can…

Target the leads with the greatest potential to succeed with your solution

There is no point looking for companies that lack the right budget, size or other predetermined factors – those accounts simply don’t fit.

Using an Ideal Customer Profile, your company can easily qualify and target the right prospects you want to win into profitable long-term contracts. To that end, an ICP can serve as your criterion for selecting B2B leads, shortening sales cycles, increasing conversion rates and reducing the chance of churn.

Speed up lead conversion

Creating an accurate Ideal Customer Profile that defines how B2B lead generation is carried out will speed up customer acquisition. In addition, by using other tools such as historical sales data, smart marketing, sales intelligence software and predictive analytics, you can improve lead quality and raise your close rate.

Align product, sales and marketing to win business

A well-defined ICP gets your product, sales and marketing departments working together. Your product team will be able to refine product features to fit the ideal customer profile, and marketing will create personalised content and messaging. Finally, the sales team will know which accounts to prioritise.

Achieving synergy between these three will make you hyper-targeted in your B2B sales and marketing activities.

Create scalable, repeatable tactics to engage and convert accounts

An ideal customer profile defines the common characteristics and patterns among prospects, so building a good profile acts as a framework you can adapt and personalise in future outreach.

There is no need to reinvent the wheel — done carefully, your ICP serves as a scalable tool for engaging and converting prospects.

Get a higher return on investment through brand loyalty and more referrals

Getting the right B2B customers through the door is what an ICP is for. But your job doesn’t end there. Your goal is to maximise customer lifetime value, which in turn will reward you with brand loyalty and lower marketing spend.

Loyal customers who genuinely get value from your product or service are more likely to refer your brand, potentially generating 65% of new business opportunities.

How to create an ideal customer profile in B2B?

Building a successful ICP is not guesswork — the more accurate it is, the higher the quality of leads that will enter your sales funnel. To define your ideal customer accurately, you need to use data and start with what you already know — your existing customers.

List your most valuable customers

Identifying your most successful customers is where to start when developing an ICP. It is worth understanding how your product or service helps them, what their problems are and how your company’s product or service eliminates them.

Tip: use your CRM and ABMsystems to narrow the list further. Both tools should provide information on your most profitable accounts and the customers with the longest tenure and highest satisfaction.

2. Analyse them

Now that you have a list of your best customers, analyse them to understand why they stay with you — what keeps them? Don’t shy away from conducting direct customer interviews or surveys — it is a popular and useful practice in the industry.

Draw up a list of firmographics

Firmographics themselves help segment the market and reach more qualified B2B prospects, so adding them to your ideal customer profile is essential.

Think about variables such as:

1. Industry;
2. Location;
3. Company size (from micro-business to corporation);
4. Legal structure or status of the entity;
5. Product/service details;
6. Performance indicators, including revenue and growth rate.

Refine customers’ pain points

This step connects with the second one. Why? Because by interviewing customers you will hear their challenges and motivations. Systematise these insights to fill your ICP with qualitative data that gives a better understanding of how to approach prospects. Creating an ideal customer profile in B2B means observing patterns and trends while using data to get a 360-degree view of the companies you want to target.

Set out your company’s unique selling proposition

This part is about you and your company. What makes you unique, and why should prospects go with you rather than the competition? A unique selling proposition defines the strengths and advantages of your product and how your solution (not the competitor’s!) can solve your customer’s most pressing problem.

Finalise your ICP template and revisit it regularly

Your ICP must stay in sync with market developments and customer feedback, so make sure you review and revise it regularly.

Don’t forget the ICP criteria that matter to you

When it comes to ICP variables, we must realise that an umbrella approach may not be ideal for every company. That is why the decisive criteria must be tailored to your goals and the specific factors that influence your prospects’ buying behaviour.

Step 1:

Search for companies using basic criteria. A good strategy for approaching ideal customer profile criteria is to look at quantitative data such as turnover, team size, industry and region. This should help eliminate many companies that simply don’t have the means to buy your product.

Step 2:

Use secondary criteria to narrow your ICP. Now that you have a broad list of companies, you can dig even further by looking at qualitative or secondary factors such as their current technology, sales trigger events and employee profiles.

Does your target customer, for example, anticipate any significant events, such as opening new offices that create demand for new equipment or software, or does it intend to open new positions that need recruitment support?

Similarly, details such as specific job titles can also help identify targets. A Data Scientist suggests an organisation with large amounts of data. Microsoft Project Manager — a company using Microsoft. The more data points you can work out, the more targeted your outreach will be.

Step 3: Consider using B2B lookalikes

If you already enjoy a solid customer base, it is always worth considering lookalike modelling, which lets you replicate successful prospects. Reaching audiences that already fit your company puts you in front of prospects who are likely to convert. Tools that help define the ideal customer profile in B2B: creating an Ideal Customer Profile seems a daunting task, but you can automate the process with a few MarTech tools.

Sales intelligence

The Sales intelligence tools will not only help you narrow your target accounts but will also automatically provide you with high-quality B2B leads. DataBot is an AI-based sales intelligence platform that helps companies reach their ideal audience, generate more high-quality B2B leads, close new deals and grow revenue. Its unique crawler technology dives into online content to combine primary and secondary data, from firmographics, key financial data and trigger events to current news and B2B lookalikes, that match your ICP.

This is not a typical program that only scratches the surface. DataBot’s sales intelligence platform goes as deep as company websites, social media channels and national trade registers — uncovering huge potential for lead generation.

Imagine the power of knowing the external and internal factors that affect your target customers, and approach them with a highly personalised message. By being agile and more nuanced in your marketing and sales tactics and using AI data analysis, you can secure profitable contracts and grow your business.

Customer relationship management (CRM) system

Your CRM platform is another tool that can help your ABM efforts. That is where existing and potential B2B customer data is centralised, letting you synthesise the relevant data points. In addition, a CRM system can help determine which B2B customers best match your Ideal Customer Profile, qualifying them for demand and lead generation campaigns and upselling or cross-selling .

Web tracking

An effective addition – especially for your ABM campaigns – can be web tracking tools such as Leadfeeder. Web analytics lets you capture B2B leads from inbound traffic, revealing visitors, what they are looking for on your website and the channel that brought them there. Later you can easily view, segment and move ICP prospects through the sales funnel using preconfigured filters.

Intent data

Put briefly, intent data connects data points and insight into user behaviour, identifying ideal customers. Everything from how long a prospect stays on a page to which blog posts they read or which e-books they download is a signal that gives you detailed insight and lets you personalise B2B lead generation campaigns.

Final thoughts: why an ICP is a must in B2B

The goal of every B2B company is to reach the closed point of the sales funnel. Serving customers is a challenge in today’s world of restless B2B buyers, tight budgets and the many stakeholders involved in the buyer’s journey.

Pursuing prospects who don’t qualify is a resource-intensive activity that prevents you from closing deals with the right buyers. An Ideal Customer Profile lets you precisely profile the companies that would benefit from your offer.

Once you convert them, they are likely to champion your solution, continually getting value, renewing, upgrading and recommending your company, which leads to new contracts and a solid sales funnel for you!

Tags: B2B sales, B2B database, ICP system, Ideal Customer Profile, Lead generation, Sales, Sales Intelligence

Mariusz Biniak – creator of the POLISH YELLOW PAGES® brand (formerly DATABOT.PL) and author of a blog on B2B sales. Disclosure: the author is connected with the publisher of THE BUSINESS TIME.

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• POLISH YELLOW PAGES® (databot.pl) – original blog post

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