A buyer persona and an ideal customer profile (ICP) are frequently confused. Unlike traditional inbound marketing, ABM does not require the comprehensive, persona that traditional marketers may have used in the past. An ICP, on the other hand, is a description of the accounts that are the best fit for your product or service (and when talking about the people on that company’s buying committee, it’s a buyer persona).
Before we get into how to do this, let’s define another popular term: total relevant market, also known as TAM. We attempted to define these two terms ICP and TAM.
Don’t confuse the Ideal customer profile (ICP) with the Total Relevant Market Mean?
Your total relevant market consists of all the accounts to which you may ever sell. This is the total revenue potential of your current product and service offerings. In a B2B account-based strategy, this is translated to the number of companies, or accounts, to which we could sell.
Before you can effectively target accounts, you must first assess the characteristics of your best accounts and the number of others who share those characteristics. This is accomplished by defining your total relevant market and ICP. This is feasible. Your ICP must seek to gather relevant data, such as industry vertical, technology stack, employee size in each department, and so on, that is required to further develop your target account list, segmentation, and so on, based on your business goals and product/service.
Creating the Ideal Customer Profile-How to Identify Your ICP
Developing a successful ICP aka ideal customer profile is a holistic effort that requires the collaboration of sales, marketing, and leadership. Based on the number of products/services offered, an organisation may require multiple ICPs.
You must first identify the firmographic, environmental, and behavioural characteristics of your best customers in order to define your ICP. You’ll accomplish this by compiling a list of your best customers, separating out their firmographic, environmental, and behavioural characteristics, and identifying patterns and similarities.
A few fundamental elements are required for the creation of an ICP:
- Qualitative research
- Quantitative assessment
- Intent data
- Predictive analytics
Your ICP should concentrate on relevant aspects of your target accounts, such as
- The potential for revenue is relatively high.
- The sales cycle is shorter than usual.
- The industry is a good fit.
- The company size is appropriate. In the right geographical location
- Consistent with the company’s goals (e.g., net new logos, upsells)
- Consistent with the company’s overarching strategy (e.g., break into healthcare)
- No recent market changes would disqualify the account (e.g., new regulations, recent acquisitions, divestments)
- Not disqualified due to sales (e.g., the account is loyal to a competitor)
- Competitors’ customers
How Are Total Relevant Market and ICP Different?
As stated, your total relevant market is the total number of accounts that could ever purchase your product or service. But just because a company might buy your product doesn’t mean you should waste time and money marketing to them.
Your resources are limited, and they must be directed in the best way possible. Someone has to help you manage your customers, create new features to keep them happy and manage those people.
Even if your product has the potential to serve an infinite number of people, it does not imply that you have the resources to handle that volume of output. The point is that you should consider your product to be a scarce resource, regardless of its availability. Here’s where your ICP or ideal customer profile comes in handy. The total relevant market is a hazy, idealistic number of accounts, whereas ICP is the realistic number of accounts on which you should concentrate your efforts. These are the accounts that are easiest to convert into opportunities, have the shortest sales cycles, and turn out to be the most satisfied customers.
Remember that it’s unlikely you’ll go after every business that fits your ICP at once. Although it would be ideal if you could, most businesses lack the funding necessary to focus on all aspects of their ICP at once. And if you establish your ICP and discover that you truly have the resources and bandwidth to target every account on the list, you obviously defined it too narrowly!
Once you’ve compiled your list and begun targeting accounts, you may discover that some of the identified characteristics are substantial determinants of performance, while others have little to no impact. Furthermore, you may discover new characteristics that provide invaluable insights into your potential success with a company.
Account-based marketing is a continuous process. You will refine the true indicators of success as you collect more data and interact with customers. Furthermore, your business is an iterative and ever-changing process. Your ICP will evolve alongside your business.