The Two Reasons You're Struggling with Your ICP
Paul Stansik
Partner at ParkerGale Capital | Private Equity Portfolio Operations | B2B Sales, Marketing, and Strategy | Writer
It’s January, and I’m deep into a segmentation and Ideal Customer Profile (ICP) project with one of my portfolio companies. And while I’m enjoying this one, it also reminds me of why this kind of work is so challenging.
1. The Data Problem
Figuring out your ideal customer means untangling a mess of data. For us, it usually involves stitching together history from multiple CRMs, filling in the blanks with enriched industry and firmographic info, and slicing the numbers every way you can think of to answer three questions:
It’s part math problem, part art project. And, honestly? It’s kind of a grind. You have to look at everything from pipeline created (count and dollars, please - don't cut corners) to closed-won bookings to ASP to sales cycles to win-rate to gross margin and compare all of those analyses across your segments to start to hone in on your sweet spots. The sheer volume of analysis alone is why most companies never pin down their ICP. This part is just a ton of work. And, for most teams, this is typically where the ICP dies a half-done death.
But let’s say (luckily) that’s not you. Let’s say you do the work, finish the analysis, and have at least an emerging answer of the types of customers you would like to clone.
What then? Are you done?
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2. The Human Problem
Sorry, but no.
Even after you identify your initial “winning zone” segments (again, no small feat), the real challenge begins. This is where the work shifts from analytics to influence. Once you have the data, you have to merge those insights with perspectives from your team, secure executive buy-in, and rally everyone around what part of the market you’re going to focus on.
This part is hard, messy, and slow. Partially because this is one of those sales and marketing problems that everyone has an opinion on. And even though letting everyone weigh in can be frustrating, that level of opinion-having is good! If your team didn’t care about what kind of customers are best (and where they should be spending their time and money and attention) that would be kind of scary. So while the conflicting POVs can be a little aggravating, you need to embrace them if you have any hope of doing anything with this fancy Ideal Customer Profile of yours.
The key at this stage is to embrace the messiness, get the opinions out on the table, and find a way to land the plane on a “pretty good” ICP that people can get behind. The goal isn’t perfection—it’s intention. It’s about getting just enough agreement that, yes, this is where we should focus so you can stop pondering your ICP and start putting it to work.
How To Put Your ICP To Work
But how exactly do you put it to work? Lucky for you, I already answered that question in this post here - one of my favorites from 2024. Whether you’re in the middle of building your Ideal Customer Profile or just curious about the art of making segmentation stick, I think you’ll enjoy it.
Managing Partner @ Echo Partners | Connecting Investors & Businesses
3 周What strategies have you seen work best for bridging the gap between defining an ICP and actually taking action?
GTM & Product Marketing Executive
1 个月Thorough approach Paul Stansik thanks for sharing. I like to start the process of identifying ICP by interviewing the customers across various segments getting the most out of the product (high usage and high renewal). It helps tell the story that can be hard with quantitative data, and identified common attributes among them to lock on building out a profile. Have you found it helpful to leverage this type of qualitative insights in this process?
Customer & Operating Growth Executive | CCO/CRO/CIO | Private Equity Advisor | Board Director
1 个月Paul, as always you give great insights and actionable details, thx. In my experience, creating your ICP is too often a one-off (painful) exercise that no one wants to own - or revisit. The real value is to use it across the business (from product to marketing to sales to customer success) and then update it often enough so that you aren't starting from scratch as it needs to evolve. Making it a 'useful tool' as you said will make ICP an integral part of a company's DNA.
Co-Founder @ Fluint | Building the Account-Based Sales Platform for Complex, B2B Deals
1 个月Re: the human problem in #2, I think a big part of that for me is not wanting to say "no" to "pretty good" but not great-fit customers. Anthony Pierri ??'s done a good job writing about that fact too. Think you guys would enjoy seeing each other's stuff (if not already).
Strategy Execution | Performance Management | Thought Leader
1 个月A very thoughtful and useful discussion. I especially found valuable the matrix (What Your Best Customers Have in Common) in your prior, referenced article. The "make a list" exercise is simple and may even be uncomfortable. I found it refreshing as I review my customers - current and prospects. It will make a useful client exercise, too. (Yes, I'll give you credit.) Already I can see a conversation or two on the "do they stick around.".