Having a clear definition of your ideal customer is one of the most beneficial things you can do for your business.
What is an ideal customer profile (ICP)?
An ideal customer profile (IDC) is a detailed description of the target customer for a business or product. It typically includes demographic, geographic, psychographic, and behavioral characteristics. An Ideal Customer Profile (ICP) dictates everything from the product features and functionality you build to the words you use and the emotions you evoke in your marketing.
How is an ideal customer profile different from a persona?
A persona is a representation of a specific customer segment within an ideal customer profile. Persona’s outline customer needs, goals, and behaviors, as well as their motivations, values, and aspirations. Personas are usually based on research and often include demographic and psychographic information.
How do you create an ideal customer profile?
Defining your ICP should be a company-wide affair. Involve all departments that touch the customer during their lifecycle – particularly product, sales, Customer Success, and marketing. Bring these teams together to decide on an initial ICP and then plan on actively revisiting it as your product, services, and market evolve.
It’s worth noting that all businesses sell outside their ICP. Part of the reason your ICP changes is from purposely pursuing customers who might be slightly outside of your scope and testing whether you can successfully serve them. This is where you’ll start to refine the differentiation between your stretch-fit customers and your bad-fit customers
When establishing your ICP and customer fit, here are a few things to keep in mind:
1. Not all customer churn is bad
As your product and market mature and shift, you make business decisions that will inherently push some customers out of your ICP and move others in. When you first launch a solution, there’s a phenomenon where it’s actually beneficial to churn some of your earlier customers because you haven’t yet tested or refined the alignment between your value proposition and ICP.
2. Know your boundaries
For stretch-fit customers, conduct more upfront vetting in the sales process to thoroughly understand their limitations and set reasonable expectations to prevent future fallout.
3. Start with product
While your ICP should not be owned by any one department, the baseline proposal often originates from product. As the function that’s most intimately familiar with your solution, your Product team should know who you intend to build for and what problems you want to solve.
4. Back your ICP with data, not anecdotes
Because Customer Success hasn’t traditionally been rooted in data, there tends to be more emotional reactions to customer fit when it’s not perfect. If Customer Success wants to influence or participate in conversations about ICP, the best thing they can do is approach these discussions with a clear data mindset. If you want to legitimize concerns about bad-fit customers, you need to substantiate your claims. What proof points and metrics are you citing? What’s your baseline to identify where and how the fit is off? Take a step back and listen to what your customer data is telling you.