How to Use ICPs to Accelerate Go-to-Market Success

In this article:

• §1 - What is (and isn’t) a good ICP??
• §2 - ICPs are not only for marketing
• §3 - Costs (and symptoms) of bad ICPs
• §4 - Building a better ICP
• §5 - A new funnel metric to consider: The “ICP fit score”

Introduction: How many times have you heard…

I’ve worked with tons of large and small B2B companies, mostly tech-first. And whenever the go-to-market conversation comes up, I hear things like “let’s go big with this launch”, “maximize our impressions”, “start the social marketing”, and “any press is good press”.??

These are all “spray-and-pray,” unfocused approaches to the market, and will all end-up as wastes-of-money if they’re not targeted at ideal customers. This may sound counteintuitive, but the more narrow/focused your marketing, the bigger your business will be.

This blog is not about “how to create an ideal customer profile (ICP)”. Rather, it's a case for why developing good ICPs benefits far more than just your demand-generation team.?

1. What Is (and Isn’t) a Good ICP??

First, I want to point out 3 things about using ICPs:?

1. An ICP is NOT a customer persona?
2. Good ICPs are very specific
3. ICPs are intended to be actionable

I’ve found personas to be mostly qualitative, serving the purpose of personifying customer types. They help provide an image, a tone, and literally a face to customers. The downside (if not danger) of this approach is that personas can be vague and potentially confusing. For example, you’ve all probably seen the persona illustration below - same top-level persona, but vastly-different buyers.?

Not that personas are not useful – they certainly help describe problems and challenges that different customer types face, and help with things like content tone, sales prospecting, etc.?

In contrast to qualitative personas, ICPs descriptors are very specific and should be as quantifiable as possible (more in section 4 below). In fact, ICPs are DERIVED profiles, not a desired profile. You don’t dream-up an ICP…? you experiment until you find them. They? should describe customer segments that are already shown to be reliable buyers, have low acquisition costs, have high product engagement, and high likelihood of expansion/renewal.?

Finally, ICPs are to be used because they are actionable. That is, they should directly help with SEO, how to define customer needs, to specifically capture their pain-points, to speak in their jargon, to help with where to find/access/target them, to help to qualify/disqualify them, etc.? If there’s a part of your ICP (or, for that matter, your persona) that you don’t operationally use to guide your GTM strategy, then it’s unnecessary.? More about developing ICPs later.

2. ICPs Are Not Just for Marketing

To build on the “ICPs must be actionable” point above, consider who else in your company would benefit from a precisely defined ICP, and how much better-aligned efforts would be.?

I like to say “ ICP before GTM”.?

Ask yourself: Whenever the pipeline is in danger, finger-pointing between sales and marketing almost always happens.? Typically it’s either “marketing is giving bad leads to sales”, or “sales is prospecting in the wrong areas” (or variations).? However, if sales, marketing, demand gen, etc. first all agree on the customer profile, then the finger-pointing will stop.?

A clear, agreed-upon customer definition benefits just about every team.? Below, a fantastic Gartner diagram (my annotations) depicts this. A clear ICP helps align strategy, data collection, account planning, content, channels, plays, metrics cohorts, and even the product/feature roadmap itself.

3. Costs (and Symptoms) of Bad ICPs

Another great Gartner graphic illustrates the downstream buying cycle costs of poor ICPs and siloed teams. From sales close, through ownership, and even beyond, if you’re lucky enough to land a deal with a non-ICP, this may NOT benefit you.? Non-ideal customers may exhaust your sales implementation team, complain about the product, and potentially even churn.

?There are even more negative results of customer mis-focus:

• Increased Customer Acquisition (CAC) Costs: A poorly defined ICP leads to broader, less targeted marketing efforts. This results in higher customer acquisition costs.?
• Lower Lead Quality and Conversion Rates: Without a clear ICP, marketing campaigns tend to attract a mix of leads with varying degrees of focus. This dilutes lead quality and conversion rates.
• Inefficient Use of Marketing Resources: Time, budget, and people are misallocated when you target the wrong audience.??
• Misalignment Between Sales and Marketing: A vague ICP can cause a misalignment between sales and marketing teams. I.e. marketing may generate leads that sales teams find difficult to convert.?
• Ineffective Personalization and/or Product Engagement: A bad ICP hampers your ability to craft personalized messages, mis-use jargon, mis-focus SEO, all leading to lower engagement rates and ineffective communication.
• Poor Strategic Decision-Making: Without a clear ICP, decisions related to product roadmap, market expansion, and resource allocation can be misguided.??
• Reduced Customer Satisfaction and Retention: Targeting the wrong customers could result in a mismatch between customer expectations and the product’s capabilities. This can lead to higher churn rates, and poor customer retention.

4. Building a Better ICP

When undertaking building a good ICP, I like to make sure every aspect and every definition will be actionable. You’re never too specific. Ask the team: Will this trait be used by sales to qualify? By marketing to target? By product to define the right user cohort? You get the picture.

And very important: My recommendation is not to start with a “hunch” ICP,? but rather, start with your existing customer base. Group cohorts by known characteristics like lifetime value, net revenue retention, and acquisition costs. You’ll soon see patterns emerge.?

Next, you can enrich the ICP cohort data with external sources. You might now find that some ICP cohorts also have additional similar traits like tech stacks, partners, or customer types. A good “ICP Algorithm” will help you discover correlations between ICP customers that you can then replicate and operationalize in your own marketing motions.??

I like to use at least 4 broad categories of ICP definitions: Firmographic, Psychographic, Job-to-be-done, and Technographics.? Remember, each data field should be useful and actionable… whether it’s about the company (for prospecting), the people (who sales should network with), the pain-points (for messaging), or technology (again, for prospecting as well as use with product roadmap).?

5. A New Funnel Metric to Consider: Your “ICP Fit Score”

Not being rigorous about ICPs – in my opinion – is a chronic error that’s missing from marketing processes in most B2B firms.?

In fact, while there are literally dozens of MarTech solutions for monitoring and enhancing the marketing funnel, few if any CMOs think about the quality of what they feed into their marketing funnel in the first place.

What if you could quantify your ICPs along a dozen (or more) characteristics, then score them? And, what if that score was included in your CRM, marketing, and sales qualification process???

You’d have a powerful, quantitative – and hopefully, agreed-upon – metric for evaluating your outbound targeting and top-of-funnel quality.? You could also track funnel effectiveness against different ICP cohorts! (Today, you’re probably only tracking funnel effectiveness against leads brought in through different channels/campaigns).?

Finally, deriving an ICP Fit score will also serve the needs of a number of stakeholders - besides aligning the entire org on what ICPs you’re focusing on in the first place. Groups that will thank you include:

• Demand Gen & Campaigns: Focus GTM efforts on (or exclude from) specific segments and buyers.?
• Account-Based Marketing: Provides highly-focused guidance on which prospects are lowest CAC and highest likelihood of closing?
• Sales: Gives clear guidance on opportunity scoring, plus clarity regarding account qualification / disqualification
• Finance: Provides ICP cohorts on which finance can forecast specific long-term profitability based on alignment with the ICP and non-ICP customer mix
• Product: Clarity of ICP cohorts and their needs helps prioritize feature roadmap, as well as how it aligns with cohort profitability

Want to Learn More???

Vendors related to building ICPs:

• Align ICP - Ideal Customer Profile analysis & go-to-market alignment; Operationalize ICPs to create a closed-loop process for continuous growth
• OpenGTM.ai - Use buyer intelligence to find and prioritize the leads and deals that fit your company best
• Keyplay - The new way to find ICPs, prioritize your market, and track account signals.

Analysts

• Gartner: The Framework for Ideal Customer Profile Development
• Gartner: How to Define Your Ideal Customer Profile (ICP) for Precision Targeting
• Forrester: Start With Customer Insights To Determine Your Highest-Fit Opportunities

Other Resources

• Product Marketing Alliance:? How to create an ideal customer profile (ICP)
• Hubspot: Ideal Customer Profiles and Buyer Personas—How Are They Different?