How to define your ideal customer
Begin by putting the foundations in place
Marketing to business customers isn’t about trying to attract every potential opportunity; the crucial part is to attract profitable customers who are most likely to buy.
Defining your ideal customer makes it possible to target customers in a way that makes it easier to win, allows you to scale more quickly, and creates a value proposition that resonates with these customers.
Creating an ideal customer profile (ICP) means:
You know precisely who you should be targeting with your messaging.
By definition, these are likely to be your most profitable, easiest-to-win customers.
It ensures sales and marketing are aligned.
It reduces the cost of customer acquisition as you’re no longer paying to target customers who are unlikely to buy.
Your ideal customer profile defines your ideal customer, including the market they’re in, who they sell to, why they need your solution, and their size. Your ideal customers are those that:
Have shown the greatest need for your solution.
Can derive outstanding value (compared to your wider potential customer base) by adopting it.
Spend more than other customers.
Can afford to pay for it.
Defining your ideal customer profile (ICP) is often done by looking at customers you’ve already won (primarily those that show the most significant opportunity for profitable growth) and should look something like this:
Try to avoid the temptation of making your ICP overly broad and ending up with something that captures everyone in your space, the purpose is to remain focused on where you spend your time and marketing dollars. In general, the narrower your focus, the more successful you’ll be (if you want to read a deeper dive on this, Geoffrey Moore's book ‘Crossing the Chasm’ is an excellent book).
The best way to go about creating your ideal customer profile is to talk to your existing customers (alongside your salespeople) to understand:
1. The industry they’re in and who they sell to.
2. What their competitors look like - their strengths and weaknesses.
3. Your customer buying journey:
i) The reasons behind the purchase.
ii) Their requirements.
iii) The research they did.
iv) Their decision-making process; and
v) Where they found unnecessary roadblocks in the process.
4. How they shortlisted you and the reasons they ultimately chose you.
5. Who were the decision-makers and influencers?
6. Why they purchased.
7. The consequences of not making this change.
8. How they're benefitting from your product.
Remember that the idea is to create a profile of your best customer. That doesn’t mean that sales should ignore other opportunities; however, your ideal customer profile should be the focus of marketing outreach, as that is where you’ll see the greatest results.
From this, you’ll want to create your buyer personas — the people you need to influence and sell to within the organization. Your buyer personas logically follow your ideal customer profile and should include the job titles of those affected (directly and indirectly) by these business issues, along with how they are affected.
If you would like any advice on any of these steps, feel free to reach out to book your free advisory discussion.