Unlocking Growth: Understanding the Power of the Ideal Customer Profile

A core tenet of product marketing is sorting out your Ideal Customer Profile, or ICP. This shouldn’t be confused with buyer or user personas, which are about the people purchasing the solution. Instead, the ICP is about the type of company that you would ideally sell to. These are your most valuable, easiest-to-please, and longest-lasting customers.

Sounds fairly simple, right? On some level, particularly early in a company’s growth story, the ideal customer is often simply “someone who wants my product and can afford to pay for it.”

But to achieve massive, out-of-this-world type growth, you must be much more specific about who will benefit most from your solution. This impacts almost everything you do throughout the company, and over time I’ve noticed some of the same problems occur in many companies around their ICP:

1. ICP isn’t a marketing or sales issue, it’s a whole-company issue

If I went to the leaders of your sales team, your product team, your customer success team…would they all agree on who your ICP is? What if I expanded that question to front-line team members in each of those areas? In almost every company I’ve ever worked with, I would get very different answers, and this is a huge problem. So many of the challenges between teams, from the sales team arguing with the product team about what to prioritize to the customer success team upset with sales over promises that were made, stem from a lack of core alignment on the ICP - as well as other parts of product marketing.

And I get it, it’s hard - the sales team wants to expand their potential customer base and say “yes” to as many potential deals as humanly possible, and understandably so. The product team wants clarity and consistency as to who they’re trying to serve, in order to effectively prioritize development efforts. And the customer success team wants to implement a solution that does what was promised and makes the customer happy.

Hammering out alignment in this arena can be length and painful, and can even seem like busywork. But in reality, investments in alignment will pay huge dividends when each team is pulling in the same direction and able to fulfill on both their own and the company’s broader goals.

2. Nail your positioning first, ICP second

Before you can realistically determine WHO you should be selling to, you must determine WHERE you fit in the market - aka, nail your positioning. Positioning is both a positive and a negative guiding principle - in other words, it tells you where to go, and also where not to go. It guides who you help, and who you shouldn’t help. A company cannot be all things to all people; positioning is about determining where you can be a great fit and choosing to be there.

Many companies get only a part of this right - they spend a great deal of time figuring out their ideal customers, evaluating their existing customer base for the most profitable customers, and researching the number of potential customers in the market - all of which are incredibly necessary - but fail to distill this down, in combination with market insights, analyst information, competitive analysis, and other information, to a clear vision for who they want to be when they grow up. All too often, the Sales organization is basing their decisions on customer data, while the Product organization is basing their information on customer interviews and competitive analysis, and neither is taking the full picture into consideration.

3. Consider defining an “acceptable customer profile” as well as an “ideal customer profile”

For sales teams and executives, the temptation to want to serve anyone who knocks on the door can lead you down a bad path, where the product team is distracted doing development work that doesn’t align with the company’s long-term vision, and the sales team is wasting cycles on prospects who should not become customers.

I’ve come to the realization that for many companies it may be useful to create, in addition to the standard ICP definition, another definition of Acceptable Customer Profile, or ACP. Particularly when a team is struggling to meet sales goals, there’s a temptation to expand the ICP dramatically, accepting almost any customer who has money to spend. In other words, any port in a storm. I can understand that impulse, but propose that this can lead to longer sales cycles and wasted effort; and that a much better solution is to push hard to locate additional ICP companies to engage, as the whole companies’ systems should ideally have been built around serving these customers.

Defining the ACP, then, allows go-to-market teams to target the ICP while understanding their full playing field, the ACP, as well as where they cannot play.

4. Maintain consistency in your ICP

Often, particularly in the technology space, the market changes regularly and there’s a temptation to almost constantly redefine the ICP in reaction to competitor activity, market shifts or regulatory changes. However, this constant redefinition can seriously limit your growth potential.

Should the ICP change over time? There should be a regular cadence of revisiting the ICP and adjusting if needed. However, because the ICP is so closely tied in with overall positioning, and because it impacts so many different systems and processes in the company, we must resist the urge to constantly adjust our targets. If we research, define and build consensus around a given ICP definition today, it will take 3-6 months to begin gaining momentum. The marketing team will begin targeting differently, the resulting messaging may shift to better appeal to this ideal customer, the sales team may begin selling slightly differently…and we haven’t even talked about the impacts to customer success, product, and other teams. It may well be 12-18 months before legitimate results are seen, but of course this may vary somewhat depending on your average sales cycle length, the market, and other factors.

In the same way that you wouldn’t redo your whole positioning strategy every few months, you should resist the urge to redefine ICP constantly. I most commonly recommend revisiting this every 18 months, but again this can vary based on your situation. The most common issue I see, and it can be particularly tempting in fast-growing organizations with ambitious goals, is changing the ICP and/or ACP so often that the results of these changes are never realized, resulting in a cycle of decision-making that’s based on poor information.

Summary

At the end of the day, your ICP matters, and it matters to many more teams in your organization than you realize. Dedicating the time to getting your ICP right, and truly understanding the characteristics of these targets, will pay huge dividends in terms of nailing your messaging, crafting the right sales process, and more. It’s a foundational piece of your growth success kit, and it should be defined and revered instead of constantly shifting.