Trying to sell something without knowing whom you're selling to is like trying to go to a new place without using a map. Sure, you might get there eventually, but how long will it take, and what will it cost you?
One of the most effective ways to increase your sales is to think about who you’re selling to. This is called an ideal customer profile.
Today, we're going to show you what this is, as well as offer a few free customer profile templates you can use in your own business.
The ideal customer profile is a mockup of the perfect customer to use your products or services. Think of them as the person who can have the most use out of what you're selling as your product or service solves their pain points perfectly.
You need to create your ICP based on customer data from your sales team, customer support reps, marketing department, and other touchpoints.
For example, if you're selling B2B software for business proposals, your ideal customer profile is likely an agency or a small business sending out a large number of proposals every month.
An ideal customer profile is beneficial for your entire company. Here are some practical reasons why.
- Maximizes marketing ROI, as you know exactly whom you're targeting
- Helps you better qualify leads in your pipeline, so sales and marketing teams know which ones are worth their time
- Allows you to define your pricing, as you'll determine how much they are willing to pay
- Leads to more referrals, as happy customers are going to refer more ideal customers who are similar to them
Whether you're selling business to business (B2B) or business to consumer (B2C), you will benefit from creating an ICP.
ICP is often used interchangeably with the term buyer persona. However, they are entirely different. A buyer persona is a fictionalized, generalized representation of who your customers are. Businesses should only have one ICP, but they may have two to five buyer personas.
These customer personas help sales and marketing teams contextualize who your customers are, what characteristics they have, and what kind of pain points you solve for them.
For example, a company selling accounting software could have the following personas:
- Small business Sally - aged 30-40, small business owner, does her own accounting, company with 10+ employees, located anywhere in the continental United States
- Enterprise user Ernest - large company with 100+ employees, has their in-house revenue and accounting teams, located in larger cities in the US Remember that your ICP is a guideline for sales efforts, while buyer personas help manage your marketing strategy.
Another concept that is frequently lumped together with buyer personas and ICPs is TAM. This stands for Total Addressable Market. In simple terms, this is the total possible market for a service or product you are selling. It is expressed in revenue, as in the ideal potential revenue you could make if you could reach everyone who needs your product.
You can calculate it with a simple formula:
Total number of potential customers X annual contract value (ACV)
This information will tell you how much money you could potentially make by reaching everyone who's a good fit as a customer. To reach the total number of potential customers, you can use third-party data for your industry.
Calculating TAM helps you determine if it makes sense financially to invest in a certain type of product or service or to go after a certain type of customer.
All of these are extremely useful sales and marketing tools. Ideally, you want to use all three of these combined.
TAM - total number of people you could sell to ICP - the ideal customers whose pain points you solve Buyer persona - best kinds of contacts in your ICPs to reach out to
Before we get on to the practical parts and the free customer profile templates, let's look at some practical ways you can use your ICP.
Once you've finalized your ideal target audience, you may find that you have even more ideal customers who are already paying you. They have all the potential to be your ideal customers, but there is something in the way. This helps you find and take the necessary steps to make them even happier. For example:
- You can reach out and find ways to upsell them with new features.
- You can call them to find out what is preventing them from trusting you with more budget and a higher pricing plan
- You can determine what features they are missing out on or not using to their full extent
In short, you could target multiple customer profiles who meet your ICP criteria but are not spending as much money with you as they could. Revenue expansion can help you make more money from upsells than you would by acquiring new customers.
Moreover, you can improve customer loyalty by making sure your best customers get the attention they deserve. For example, you can have an account manager call them once per quarter to find out if they have everything they need.
Let’s say that your sales team has a list of 100 customer profiles to reach out to. These could be sales-qualified leads that meet your criteria, and reaching out with a cold call could help you secure a deal. With an ideal customer profile on hand, your sales teams could quickly filter only those customers that match or are close to your ICP. These targets would bring a higher return on investment and are more likely to complete a purchase compared to someone different from your ICP.
Your sales and marketing team could then:
- Spend more time creating personalized pitches for these customers
- Do extensive research on them to find out their specific needs
- Find out which competitors they are evaluating
- Assign the best sales and account managers to these leads
In other words, you can set aside more time to target the leads who are the most likely to convert to high-paying customers.
If you've ever felt stuck when it comes to creating marketing content, deciding which platforms to use, and who to create materials for then an ICP can help.
An ICP can tell you who your best targets are based on customer profiling. For example, senior managers who like to consume long-form content, either on networks like LinkedIn or in the form of downloadable whitepapers or E-books.
Or you could find out that you’re better targeting mid-level managers who appreciate practical assets such as tools, calculators, downloadable checklists, and more.
An ICP will help you get more ROI out of different customer groups by showing you exactly where to spend your marketing dollars.
Your product team is another part of a business that can benefit from an ICP. The reason is simple: you can learn what your current product is missing to satisfy your key customers. In other words:
- It can give you new feature suggestions
- It helps you organize your product backlog
- You can use it to prioritize your product roadmap
It can be incredibly difficult to maintain your product mission and vision while keeping current customers happy. An ICP can help by identifying customer pain points and work to solve them.
The default answer is always: your sales and marketing team. However, there are many other people in a business that can benefit from an ICP in their day-to-day operations.
- Startup founders: so they can prepare better pitch decks and presentations for investors, highlight the appropriate unique selling points in interviews, and more
- Product managers: to create and optimize the right product mission and vision, to manage the product roadmap
- Sales teams: to clean up their contact lists and prioritize the accounts that can bring in the most revenue
- Marketing teams: to better understand the customers they create content for
- Business development managers: to better guide their growth efforts and achieve company goals more easily
- Customer support teams: to know what type of accounts deserve special attention and care
In short, people and departments across your entire organization.
Creating an ICP can be a challenge, which is why we’ve pulled together an easy step-by-step guide for you to follow.
Before setting out to create a customer profile, first look inward at your business. Consider the kind of goals you want to achieve in sales and marketing, and how these will affect the type of profile you create.
Some examples of business goals include:
- Hit an annual revenue target
- Launch a new product
- Expand to a new market
- Upsell a % of your existing customers
- Become a thought leader on a certain topic
- Overtake your competitors in organic search
Each of these goals has a specific customer profile that can help you achieve it more quickly and easily.
The path to your ideal customers starts with the ones that you already have.
Take a look at your existing customers and identify who are happiest with what you're selling. These are the people whose customer pain points you solve perfectly, and the kind of people you want to attract.
When identifying ideal customers think about the following:
- The ability to purchase: customers that can easily afford the products or services you're selling without questioning your pricing
- The right size: businesses that have the right team size to be your customers, so they can justify the costs of your solution or purchase a satisfactory number of seats/plans
- The right location: customers who are geographically located in areas where you want to be present, and areas that are economically well-off enough to pay for your product or service
- The right industry: they are in an industry that has a constant need for what you're selling, and has traditionally proven to be a fertile ground for your business
- The right state of the customer journey: they have already realized their pain points and are at a point where they're ready to purchase
At the end of this process, you'll have a list of target customers who have the most use of your product or service and the money to afford it. You can use CRM software to make this process quicker and easier.
At this point, you should have a list of your existing, ideal customers. Now, it’s time to identify the key features of this target audience. For example:
- Company size
- Monthly and annual recurring revenue
- NPS score
- Sales cycle length
You can easily simplify this process by using your CRM.
Once you've determined which current customers fit your ideal profile, it is time to get in touch with them. Assuming that they are happy with you and your product, collecting customer feedback from them should be pretty effortless.
The end goal is to use their customer feedback to find out why they use your solution, so you can acquire even more customers in similar positions and industries.
Here are some questions to ask in your interviews:
- What made you start looking for a product/service such as ours?
- What made you choose us over the competition?
- Which competitors have you considered before choosing us?
- What is the biggest benefit that you're getting from our product or service?
- What other tools and products do you use daily?
- What is the one aspect of our offer that you find the least useful?
- What is the one thing we could do to make our product or service more valuable for you?
- How many people in your company were involved in the purchasing decision, and how long did the decision-making process take?
Collecting this customer data in one place will leave you with a goldmine of information for building your customer profiles.
For the sake of consistency when you collect customer data, make sure to create a script and stick to it. You'll want to ask the same questions every time to every customer. You can also ask customers if you can record the conversation so you can refer back to it.
If customers are apprehensive about the interview, you can sweeten the deal, and offer something in return for their input and opinions. For example, access to beta features, a discount for future purchases, or a voucher for a store or website.
A major part of an ICP is identifying the pain points your ideal customers have as well as looking at how you can resolve those problems. For example, if you sell appointment booking software, there could be the following issues:
- Your customers' users don't have a way to book an appointment by SMS
- The customers keep missing their appointments because there are no automated reminders
- Their existing appointment booking software does not integrate with their CRM
Defining customer pain points can provide valuable insights into your customer experience, and highlight what you need to do more of to attract the kind of customers you want.
By now, you should have a pretty accurate picture of the kind of customer you want to attract. But you're not the only one trying to win these customers. Your competition is probably already working on taking over your customers and breaking into your ICP market.
For example, if you know that organic search is a great channel for acquiring new customers, you can research your competitors and find out how they get in front of your target audience. Use tools such as Ahrefs, Semrush, Similarweb, and others, to learn what kind of keywords they target, which pages their customers visit the most, and more.
Competitor research can reveal gaps in your own strategy and show you what your ICP may be missing.
Good data management is essential when creating your ICP. You want to use all of the data you have and sort it into one place, this is where tools like CRM software come in handy.
You should have an overview of your top customers, with a mix of both qualitative and quantitative data. You can use this to make correlations and group your ideal customers based on their attributes.
You can confirm your doubts or perhaps come to surprising conclusions. For example, you may be thinking that your most valued customers are in the mid-market segment because those customers are the most vocal. Instead, your enterprise customers could be a minority but still drive the most revenue.
Before sitting down to create multiple customer profiles, talk to your team first. So far, the information you've gathered has been based on the data in your CRM and the information your customers provided.
You should also try to talk to your team, specifically the customer-facing teams, such as sales and customer support. They will be able to validate your findings and tell you whether they are based on real-life situations or not.
An ICP can change and adapt over time. Your company should constantly be growing by going after larger accounts, expanding into different markets, branching into international waters, and more.
In other words, your company will change over time and that means that your customer profile will change with it.
You never know how external factors could also affect things. For example, the latest AI boom has turned the world of software upside down. In just under a year, AI components have been added to apps, webpages, and software to help them stay competitive and relevant.
As both your company and the ideal customer groups change, you're going to need to update your ICP for the information to stay relevant. Depending on the market you're in, you can set dates to revisit the ICP, but it's a good practice to review it once per year.
Creating an ICPe is not just good practice for marketing and sales campaigns, it helps you envision who should be purchasing your product or service. This makes it easier for the entire company to align with this goal.
No matter what you sell and whom you sell to, a powerful CRM is a tool you need in your arsenal. Find out how a CRM can help you grow your business by signing up for your 14-day free trial.
And if you don't know how to get started, here are a few free customer profile templates you can copy and learn from.
- Company Size:
- Geographic Location:
- Tech Stack:
- Age Range:
- Income Level:
- Education Level:
- Geographic Location:
- Primary Pain Point:
- Secondary Pain Point:
- Tertiary Pain Point:
- Short-term Goals:
- Long-term Goals:
- Purchase Frequency:
- Average Spend:
- Preferred Purchase Channel:
- Key Decision-makers:
- Time to Decision:
- Factors Influencing Decision:
- Preferred Communication Channels:
- Times of Availability:
- Current Solutions Used:
- Reasons for Switching:
An ideal customer profile should include demographic data like age, gender, and location, as well as psychographic factors like interests and pain points. It should also outline the customer's buying behavior, preferred communication channels, and lifetime value to the business. Most of this data should already be in your CRM, and if something is missing, use customer interviews to fill the gaps.
To create a good customer profile, analyze existing customer data and market research. Use surveys and interviews to gather insights. Segment the data to identify common traits and behaviors. Finally, validate the profile through A/B testing.
The ideal customer profile statement is a concise description that encapsulates your target customer's key attributes and behaviors. It serves as a guide for sales and marketing efforts, ensuring alignment across the team.
An example of an ideal customer could be a 30-45-year-old small business owner who values eco-friendly products, shops online and is willing to pay a premium for quality and sustainability. This profile aligns with the company's mission and product offerings.
Trying to sell something without knowing whom you're selling to is like trying to go to a new place without using a map.