How to Define Your ICP to Drive ARR Growth
If you want to double ARR in a year, you don’t get there by chasing every lead. You get there by locking in on the right ones—the customers who stick, expand, and drive long-term revenue. Here I tried to lay out a structured ICP framework to help you focus on the most impactful levers to identify the right ICP and reach scalable growth.?
Step 1: Define ICP Indicators
Not all customers are equal. The best ones share common behaviors that signal long-term value. Here’s what to track:
Why It Matters:
These are the first signs that we have users that stick around with our product, that means that we can maximize revenue per user and increase retention—key drivers for scaling fast.
Step 2: Define Commercial Success Metrics
We need customers who contribute to our bottom line, not just sign up. Here’s how we measure that:
Why It Matters:
A high LTV/CAC ratio signals profitable, scalable growth. Expansion potential ensures revenue grows without constant new acquisition costs.
Step 3: Define Customer Success Metrics
A great ICP isn’t just easy to acquire; they’re easy to keep. We track:
Why It Matters:
Customers who get value quickly and don’t need excessive support churn less and generate referrals—fuel for organic growth.
Step 4: Define Firmographic Filters
We narrow our ICP further using:
Why It Matters:
Clear firmographic filters ensure we don’t waste time on low-potential leads or tiny markets.
Step 5: Steps to Follow in ICP Definition
Defining your ICP isn’t a one-and-done task—it’s a constant process of collaboration with other teams and refinement. When done right, it creates alignment across marketing, sales, product, and customer success, making sure everyone is working toward the same revenue goals. Here’s how each team should apply it in their daily execution:
Want to hit ARR growth? Start by knowing exactly who to sell to, how to keep them, and when to double down. Anything else is just noise.
Bonus:
Here's the example of the scoring table
Here I’m sharing the example of how our team came up with ICP scoring approach during the latest workshop.