Get Serious About Ideal Customer Profile To Optimize Revenue Growth

How do you define your organization’s Ideal Customer Profile (ICP)? What would your top-selling salesperson say? Your CEO? Did you all say the same things? Which of you is right? Most likely, none of you… not completely anyway.

I’m not suggesting that any of you don’t accurately describe the client characteristics that have enabled your organization to succeed... which is great… we need that insight. However, what if you used the treasure trove buried in your various operating systems and the encyclopedic data available in the public domain to answer the question,

“What is Your Statistically Optimal ICP?”

In baseball, the difference between not making the team and first ballot Hall of Fame is less than 10%. One of the most important things we can do as salespeople is decide how to spend our time. What might happen if you spent your time on prospects that were 10% more likely to close… statistically speaking?

• Maybe more efficient client acquisition?
•  Perhaps faster top-line growth?
• Could be greater profitability?
• Possibly higher business valuation and market cap?

Business development should be prioritized based on indicative characteristics that can reliably predict sales success. We have the data and statistical know how to identify and rate hundreds of indicative characteristics and discover the algorithms that produce the highest possible batting average.

Where to Start? Go Deep and Wide!

Remember those three guys that had something to say about your ICP? That’s probably a great place to start. They’ve obviously been successful acquiring and serving clients in your organization. Their insight is critical as you begin building models to target the best-aligned prospects and optimize average client lifetime value (CLV). However, don’t stop there. Identify a broad, curious, cross-functional team with experience throughout the customer buying journey and post-sale client experience to bring a diverse perspective.

Here’s my abbreviated list to get the conversation started:

• Business Priorities: There are likely some business objectives that we are better at addressing then others. Are there differences in business life stage? Ownership structure? Growth and profitability objectives? Do we fit better with acquisitive companies or those that tend to grow organically? Where do we deliver the greatest value for our customers… most likely there’s a strong correlation with our most enthusiastic, referenceable fans.
• Size: Are we more successful selling to start-ups, SMB or enterprise clients? There is generally a positive correlation between company size, number of decision makers and sales velocity which often makes larger clients less profitable. However, they may be better positioned to buy larger projects and invest in our development cost. Or, perhaps our technology scales better than the competition providing us an advantage with larger clients. Do we routinely consider cost of sale, and CLV based on size?
• Strength of Relationship: People make decisions emotionally and support their decisions with facts. Furthermore, as Stephen M.R. Covey demonstrated in “Speed of Trust,” accelerate trust and you accelerate decision making. When you accelerate decision making, you improve sales efficiency and increase win rates. You are also more likely to deliver solutions that truly meet your clients’ needs because you have greater access to what they believe to be true. There are many proxies for relationship strength in addition to subjective assessment… length of relationship, number of meetings, mutual affinity groups, etc. What are the markers in your organization?
• Number of contacts: The number of average stakeholders in a B2B sales transaction has increased to 6.8 and climbing (Harvard Business Review: The New Sales Imperative – April, 2017). Numerous studies have found a strong correlation between the sheer number of stakeholders identified and win rate. Of course, not all contacts are created equal. Which are the personas that have proven most critical for your organization? One more thing… if you believe selling is a team sport (spoiler alert… it is) leverage the contacts throughout your organization… that’s what tools like LinkedIn’s Teamlink are for.
• Competition: Are there some rivals that put a smile on your face when they walk through the door? Just a wild guess, but do you generally beat them? Conversely, are there stubborn competitors that you’ve never displaced? I’m not suggesting that you stop trying… necessarily. Depending on the total size of the market, their SOM, our capacity and where we’re falling on all of the other ICP characteristics, we may still target some of their clients. However, when prioritizing scarce resources, all else being equal, I propose we fight where we know we can win first.

Data Doesn’t Lie… People Do… But We Can Fix That ??

Surely you’ve heard the saying “garbage in garbage out.” You may think that your data is incomplete, inadequate or just plain wrong. I suggest that regardless of the state of your data today you have enough information to improve your understanding of your ICP and adjust your sales & marketing resource allocation accordingly.

You’ve probably also heard the saying “nothing succeeds like success.” Concentrating your resources on objectively better prospects will increase your win rates and should be an important plank in your on-going sales enablement plan. Defining your ICP is an important first step to make it so.