How to Target Your Ideal Buyer

Avoid the common cold email mistake of sending emails to the wrong people! Targeting your ideal buyer will save you time, money and increase your response and conversion rates. The answer is defining your Ideal Customer Profile.  Keep reading to uncover:

1. What an ICP is, and what it is not.
2. Why identifying your ICP is critical pre-work to any email campaign.
3. How to identify your ICP.

And, make sure to grab the template that makes it easy to identify and prioritize your ICP. The concept of the Ideal Customer Profile (ICP) has been around for a long time. It has been heavily researched, written and talked about. Yet we still see the majority of startups get their ICP wrong or worse, fail to create an ICP at all. Please take careful note: it’s an ideal CUSTOMER profile, not an ideal COMPANY profile. Whether you’re B2B or B2C you are marketing and selling to people, not companies. When you’re done with this exercise you will have identified individual people/titles, not just companies.

Setting the Foundation for Finding Your ICP

Identifying your ICP is all about finding your Mr. or Ms. Right Now (not just Mr. or Ms. Right). These are the people who you could you actually serve with your product or service today who also have a pressing need to have it resolved soon.

Why People Buy

There are four reasons people buy products in B2B environments:

1. Make Money: A company will buy your product or service if you can demonstrate that it will either directly or indirectly help them make more money. Today, the company or business unit wants, needs or is obligated to continue to drive revenue for the company. To do so, they need to find products, services or new markets that help them attract, retain or upsell more customers.
   • Example : An e-commerce company wants to increase revenue. A new technology solution automatically recommends products frequently bought together based on individuals previous purchase behavior. By bundling products together through a recommendation engine, cart sizes increase and in turn so does revenue.
2. Save Time/Money: A company will buy your product or service if you can demonstrate that it will help them save time and/or money. In these situations, customers are typically stuck performing job functions in time consuming and inefficient ways. Keep in mind that the single biggest cost for any company is labor.
   • Example: A freight trucking firm wants to reduce maintenance costs across a 100-truck fleet. A new technology company identifies the critical part failures before they happen which, in turn, reduces the incidence rate of costly part failures, as well as the amount of time per truck the maintenance team has to spend replacing parts.
3. Gain/Defend a Competitive Advantage: A company will buy your product or service if you can demonstrate that you can help them continue revenue and market share growth by establishing or defending a competitive advantage. Right now, these customers either don’t have a way or are looking for the next way to set themselves apart from other companies in their industry.
   • Example: A leading baby monitor company needs to create market differentiation. A new technology enables newborn heart and respiration rate monitoring without the need to attach dangerous wires to the baby. Improved data and safety capabilities creates market differentiation.
4. Improve Compliance / Minimize Risk: A company will buy your product or service if you can demonstrate that you can help them comply with laws, rules or regulations.
   • Example: A sales organization that runs outbound customer acquisition campaigns needs to keep their lead engine running without breaking new privacy regulations or face a fine. A new technology enables outbound customer acquisition campaigns that fit within the privacy regulation framework and provides reporting documentation to prove compliance.

As you think about each ICP, you’ll want to keep an eye out for companies that check more than one of the four boxes above. However, the relative size of the pain that you solve is more important than the number of boxes checked for each ideal buyer. For a B2C product or service, there’s only one leading reason why people buy (and it’s a big one): emotional needs or wants.

Market Needs of an Ideal Buyer

As a resource-strapped sales organization, it’s critical to dive deep into the needs of your customers. The larger the pain point for the customer, the more motivation they’ll have to solve that pain. It’s better if you do not need to convince customers that they have a problem you can solve. If you do, that’s called a marketing challenge. Just be aware (and prepared) that marketing problems take more time and money to solve.  Uncover who has the biggest needs that you can solve right now. The size of the need is irrelevant if you can’t solve it now. Narrowly define your business offerings in terms of the problem you can solve now for customers. Don’t sell your product roadmap. Your sales pipeline will suffer if you do.

Bigger Not Necessarily Better

It’s alluring to think that, all things being equal, targeting big companies with big budgets and less price sensitivity is better. But, all things in market development are not equal! Is the need you solve generally known at a big company so that decision makers with layers of people protecting their time and budget will nonetheless move quickly to have that need resolved with your product or service? If so, can your product match the expectation of a big company that you can solve the problem at-scale? And do you have the time and capital to afford a high-touch, long sales cycle? Remember, you’re not solving for the entire future of your company. You’re only looking for Mr. or Ms. Right Now. At this stage, it’s all about who you can help the most right now with the product or service you currently offer.

A Shared Worldview

The purpose of creating an ICP is to enable you to know where to focus your runway. Even if you are able to identify an ideal buyer with clear business needs that you can solve for now, often the total addressable market is still too large to capture in a capital efficient way. That’s why in addition to identifying need, you also need to identify customers that share your worldview and demonstrate the behavior of an early adopter. These are companies who want to see the same future that you see.  You want to avoid going after customers that don’t value spending money to solve the problem that your product or service solves. For example, if you had a premium WiFi technology for the airline industry, would you spend equal amounts of your Market Development Budget trying to close Emirates and Spirit Airlines? Just because both companies are in the same industry does not mean they behave the same way or, more importantly, value the same things. In this instance you would go with Emirates and other airlines that also value premium features in their customer experience relatively more than a budget airline like Spirit.

Early Adopters

The best and most important source of information about early adopters comes from Geoffrey More in Crossing the Chasm. It’s a must-read book for any founder. Understanding the adoption curve is critical to completing any ICP exercise.  Here’s the key takeaway for now: focus your efforts on so-called innovators or early adopters (for quick reference we group them together and refer to them together as early adopters). They’re the only ones with the right mindset and willingness to work with incomplete and unproven products. This customer type understands that with risk comes reward. Just think about restaurants with no Yelp review or AirBnB homes with no customer reviews. Most people prefer to eat in a restaurant or stay at an AiBnB that has already been experienced/reviewed/validated by others. Those others may be strangers, but their validation is even more powerful if they have something in common or are known to the person. By definition, the only people who do business with new companies or unproven methods or technologies are early adopters. Everyone else waits for the reviews or testimonials or customer reviews – the validations that reduce perceived risk. Search for signs of early adopters. Have they done business with a startup before? Do they have a track record of signing up for early trials of a product or service? Have they every bought something on Kickstarter? Once you understand the mindset of an early adopter you’ll be able to more easily spot the obvious and subtle signals. Here’s the “so what”: Early adopters are capable of envisioning a partnership of mutual success rather than just a transaction.

The “C” in ICP

As briefly mentioned above, one of the main blockers that we see with founders today is they mistake an Ideal Company Profile for an Ideal Customer Profile. An ideal company profile is a logo-approach to market development. It focuses on what founders know about a company at-large. It assumes that a brand’s marketing positioning is enough information to validate need. This is simply not true. The most important part of an Ideal Customer Profile is the Customer. The individual who feels the burden of their current problems, has a need that must be solved and will feel the impact of having that issue resolved.  When building your ICP, you must push yourself to go beyond company generalizations and focus down to an individual buyer. Once you focus on an individual, his/her worries, wants and needs come into clear focus and you are able to accurately identify if they are a fit or not. If your Ideal Customer Profile is not focused on an ideal buyer then your messaging, go-to-market strategy, learning and ultimately revenue will suffer.

Ideal Customer Profile Exercise and Ideal Buyer Template

With all of that in mind, you’re ready to identify your ICP! When you’re finished, you should have a working hypothesis about your ideal buyer that sounds something like “We enable {title/role} at {industry} companies to {reason(s) to buy} by helping them improve {key metrics} and solve {problems}. We’ve bundled our GrowthX ICP Template and a recent recording of our Ideal Customer Profile webinar together for you, as a springboard for developing amazing ICPs for your business.