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#gxmxp Series

Ideal Customer Profiles: Part Two

With Part One of the Ideal Customer Profile (ICP) exercise completed, you should have identified a discrete list of ICPs.

The goal of this second part of the exercise is to transition from a hypothetical ICP to a clear and tangible target customer that you can easily identify in the real world.

We’ll go beyond business issues and dive into the unique characteristics and behaviors of your potential ICPs to identify the absolute highest value companies, and the individuals at those companies, for you to target.

The more targeted you are with an actual person’s behavior and business needs, the more relevant and successful your sales efforts will be.

A more targeted customer profile is important because this isn’t a numbers game.

Market development for early stage companies is about quality, not quantity. Click to Tweet

For most startups, the maximum number of accounts or opportunities that one individual can handle is around 20.

Twenty potential customers might seem like a small and terrifying number – “How am I supposed to scale with so few potential customers?!? My total addressable market is so much bigger than this!”

Remember, scale is not the name of the game right now. Your primary focus is to optimize revenue for the purpose of learning. Just as important, while your total addressable market might be hundreds of companies, the number of companies that are a fit to work with you right now is likely quite small.

Your goal should be to focus on only those companies and leverage them as a bridge to the rest of your market potential.

Rather than looking at 20 potential customers as a limiting factor, view it as an enabling factor. With 20 accounts, you are now able to be significantly more personalized, targeted and, therefore, relevant than all the other people trying to get into your target buyers inbox and budget.

Breaking down your initial ICP into highly specific subsegments allows you to quickly and accurately determine who is worth your resource budget today.

Laying the Ground Rules 

Bigger is not necessarily better. Small markets are just as important as big markets, and you shouldn’t be afraid to focus on them if they rise to the top of your ICP prioritization list. 

Also, you should be coming up with ICPs that are “relatives.” Doing this enables you to quickly pivot in and out of ICPs as you learn what does and doesn’t work without having to completely overhaul your infrastructure. Better yet, if you’re successful, you’ll have the ability to use success with one ICP as a foot in the door with its brother or sister ICP.

Finally, when we cover customer acquisition during this exercise, keep in mind that it doesn’t usually happen all at once. Customer acquisition comes in stages. Your first sale will most likely not be a massive contract to provide every service you offer for a company. 

Instead, think about what each acquisition stage is actually like and the time it will take to go through it. Likewise, think about contract size as it relates to the time-to-close.

Generally speaking, the more expensive something is, the more decision makers will be involved and the more time it will take. If a contract costs $150-200K, it might take six months or more to close. You need to be aware of whether you have the time and resources for that. 

Starting your ICP Sub-segmentation

Your ICPs from Part One of this exercise are currently based off of business needs, which is the right place to start.

In this Part Two, we’re going to take your best ICP(s) from that funnel and narrow the focus from macro detail to micro detail, and start thinking about what it would look like to do business with each specific potential customer. 

Instead of listing a bunch of company names, we want to capture every business that has the behaviors and characteristics of our ICP.

This will enable you to create a qualification criteria that will help you identify actual people you should be reaching out to.

First, we need to come up with the characteristics that we should be looking for. For each of your validated ICPs go through each of the columns in the second tab of the ICP spreadsheet and fill in the following information:

  • Priority – Is this ICP a high, medium or low priority for your organization right now?
  • ICP NameFill this in with the specific name you came up with for this ICP in part one.
  • ICP Summary – This is the succinct, one-sentence summary you wrote down to describe your ICP. As a reminder from Part One, it should sound something like, “We enable {title/role} at {industry} companies to {reason(s) to buy} by helping them improve {key metrics} and solve {problems}.”
  • What Does The World Look Like For This ICP Today? – Summarize how your ideal customer currently does their job today as it relates to your product. Keep in mind that your biggest competitor is the status quo.
  • Pain Point Hypothesis – Describe the pain(s) that your ideal customer is experiencing in their role. Relate those pains to the four reasons why people buy (make money, save money, gain a competitive advantage, or improve compliance/minimize risk).
  • Industry – Name the specific industry or industries that fit within this ICP.
  • DepartmentDefine the functional groups that you’ll focus on.
  • Economic Buyer TitlesList the specific titles of the people who are responsible for making the buying decision. 
  • User Buyer Titles List the titles of people who will be using your product in their role. Remember to get specific. This is an ideal customer profile, not a company profile. 
  • Ideal Product Usage Which of your products or services is your ICP going to get the most value out of? It might not be possible to get all of your product into your ICP’s hands at once. Buyers often take a phased approach to product adoption to mitigate risk so you need to balance the product they will get the most value out of with the product they are most likely to be comfortable using first.
  • Contract Hypothesis For The Next 12 Months – Going with the phased approach, if you were to close this customer today, what would the contract structure look like? Is it an annual contract? Is it a three-month pilot? What would be a reasonable commitment from the buyer given your capabilities, the size of their problem and their appetite to solve it? Be as specific and realistic as possible.
  • Revenue Hypothesis Per Customer This Year – Now that you have a hypothesis around the contract structure, you can create a hypothesis about the contract value. If you think in one year that there would be more than one contract with this customer, add up the total value of those first-year contracts. This will help you validate if the revenue output from this ICP is stage relevant to your market development budget.
  • Company SizeWhen considering company size, think about what size metric is most relevant to you. It could be employees, number of products, number of website visits, annual revenue, number of customers, etc. The goal here is to focus your efforts on a narrow subsegment of an industry.
  • Technical QualificationsContinuing our sub-segmentation efforts, ask yourself what tools your ICP is already using that make you a good business fit. This can breakdown three ways:
    • What tools (software, hardware, integrations) are they using that your product could easily replace?
    • What tools is your ICP using that would make it easier to integrate with your product?
    • What tools are they using that would demonstrate that they already share your worldview and are willing to invest in solving their problems today?
  • Top Priorities Or Trends For This ICP Relevant To Your Product / ServiceOnce you’ve clarified your ICP and feel confident about your hypothesis, it’s time to do some initial research. Go online and look up “top priorities/trends for {title} in {industry}.” Within the first few pages of a Google search, you should begin to identify trends or priorities that align your company with your ICP’s priorities. Capture the most relevant trends and add them here so that you can remain focused on driving that message home to your buyers.
  • Location Where are your ideal customers located? Sometimes it’s as simple as a country. But remember, we’re looking to achieve traction-effort delta (i.e., least effort for most result). Your ICP enables optimal go-to-market efficiency. Is there a city that acts as an industry hub where you can create a network effect? Are there regions where your pain is more pronounced? It will be important to understand the nuances of that city or region’s problems as a means to accelerate your sales learning curve.
  • Acquisition Channels/StrategyAsk yourself for each ICP, “is it possible to acquire customers within this ICP given my market development budget?” The path to acquiring a C-suite executive at a Fortune 500 company is very different from acquiring a director-level economic buyer at a mid-sized company. When thinking about customer acquisition, develop the right strategy for this ICP first, regardless of your market development budget. Then, if the strategy is not feasible with your budget, that’s perfectly okay. It means you’ve defined Mr./Mrs. Right, but not Mr./Mrs.Right Now. You can come back to this ICP when you’ve built out a larger market.

The Finish Line

Similar to Part One, this exercise may feel slow at first. But as you start to get the hang of what you’re looking for, it will speed up. Don’t worry if you have to cut some ICPs along the way. You also might find yourself taking your best ICPs and breaking them down into more specific, sub-segmented ICPs because the original one was too broad. 

At the end of this exercise, you should have a few, focused ICPs that you have prioritized to move forward with. 

Your shortlist of ICPs is now your North Star. As you progress through the remainder of the #gxmxp Series, you’ll want to frame all hypothesis in the context of these ICPs, starting next week as we complete a step-by-step guide to cleaning and prioritizing your sales pipeline.


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Unique Selling Propositions
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Unique Value Propositions
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Customer Interviews
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Phase Two: Market Messaging
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Setting a Market Milestone
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Data Acquisition Strategy
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Customer Acquisition Strategies
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Competitive Landscape
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Pricing Your Product/Service
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Customer Journey Mapping
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Ideal Customer Profiles: Part One
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Current Account Mapping and Pipeline Review
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Intro to Market Discovery
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Marketing and Sales Tech Stack
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Resource Review: People
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Set a Strong Market Foundation
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Welcome to the GrowthX Market Acceleration Program

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