Why Refining TAM and ICP is Critical for Growth

Bridge Group is a B2B SaaS sales consultancy, and we chat with them quarterly about the sales environment.? We also retain them to opine on sales teams and processes when we’re considering an investment.? Below is a very crip piece they shared with us on TAM and ICP refinement.? It’s so good, we wanted to share it verbatim.? Below is what Bridge shared.

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“Identifying the total addressable market (TAM) and ideal customer profile (ICP) is essential to

ensure that both time and monetary resources are being invested wisely. Without clear focus,

there is a risk of inefficient spending and misallocation of bandwidth, which will hinder pipeline

generation.

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1. Effective Allocation of Resources.? Knowing exactly where to focus will allow us to allocate budget and bandwidth more strategically, ensuring that efforts drive additional pipeline rather than relying heavily on marketing or the partner manager to create opportunities. Relying too much on these channels introduces risk into the sales process, and diversifying through outbound prospecting is essential.

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2. Outbound Prospecting is Expensive.? Outbound prospecting, while necessary, is costly and has a lower conversion rate compared to inbound efforts. This makes it crucial to refine the target list, ensuring we’re reaching out to the most promising prospects. A more refined target list allows for:

-Higher relevance in outreach, improving the efficiency of prospecting efforts.

-Less wasted effort and money on leads that are less likely to convert.

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3.? Segmentation Enhances Messaging Precision.? By segmenting the target list (e.g., by industry, employee size, nature of hiring needs), we can ensure the messaging is highly relevant to the specific needs of each segment.? This segmentation allows us to:

-Build campaigns that resonate with different tiers of prospects.

-Avoid placing the entire burden of message customization on sales reps, who can focus on deeper personalization once the broader relevance is in place.

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4. Better Customer Management Post-Sale.? Refined targeting not only improves the prospecting phase but also informs how we manage customers after the sale. For example:

-Tier 1 prospects (high-value, strategic accounts) become Tier 1 customers, receiving higher levels of support, Customer Success Manager (CSM) attention, and resources.

-This structured approach allows us to prioritize our best customers while maintaining an efficient system for managing different levels of accounts.

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5. Iterative Improvement Based on Insights.? The initial phases of refinement don’t need to be perfect. However, creating a grading system that prioritizes different levels of prospects will allow for continuous improvement. Over time, as we acquire more customers and gather data on which segments have the highest propensity to buy, we can further refine the target list and segmentation approach. This will make prospecting and customer management even more effective.?

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In summary, refining the TAM and ICP allows us to optimize resources, improve outbound prospecting efficiency, craft more relevant messaging, and ensure better post-sale customer management—all critical factors for driving sustained growth.”

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We can’t say enough about Bridge Group.? They do strategic assessments, write playbooks, and can also do management training and coaching.? Connect with Kyle Smith ([email protected]) if you need help building or re-building your sales processes.?

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Thank you for your readership.? See more blogs and SaaS data at blossomstreetventures.com.? Email the author at [email protected].