For a lot of businesses, their ideal customers are individuals: standing in line at the ice cream truck is an individual sport; when you hit the shoe store, you’re probably buying shoes for your own feet. And of course these customers are individuals! The products they’re buying are for individual use. Sometimes even individually wrapped! Just as clear: That’s not the case for a B2B buyer.
A B2B buyer has a greater ecosystem to worry about. They have a budget determined by more than just their personal expenses. Other people will probably have to use — and even enjoy! — the product they select. They might even have a set of technical requirements to fill. That’s why, if you’re selling a B2B product, you have to think beyond the individual you’re selling to. You need an ideal customer profile.
Ideal Customer Profiles: Find Fit Through Firmographics
B2B products are made for businesses to use, so they’re made for businesses to buy, too.
An ideal customer profile, or ICP, represents the high-fit customer for your product — the company themselves.
Your individual buyers — who you should represent with a buyer persona profile — operate within a system, an environment. To market and sell efficiently and strategically, you’ll need to identify the look and shape of that system. You do that based on where you know you win.
Your ICP should include firmographic factors that both indicate and reflect a successful relationship with your product and company. (Note: Indicators are built by reflection. You form parameters for success by looking at the characteristics of your best customers — those who have historically realized the most value from your product and brought the most value to your business. Find out more about what you can learn from the past in order to create your ICP here.)
Importantly, the firmographic information you include is not a set of pain points (though some may be a leading indicator for pain points). For instance, let’s say your product helps other businesses manage complex employee pay packages. While a company with 100 employees needs it, a company with five employees probably doesn’t. You won’t include “Needs help managing pay packages” in your ICP. You’ll include “Size: >99 employees.”
Firmographic fact indicates fit.
Why is that important? Well, the benefits of understanding and defining your ideal fit accounts are astounding.
Acquisition and Retention Using the Ideal Company Profile
Key benefits of developing and using ICPs fall into two categories:
- Immediate efficiency and satisfaction gains
- Deeper, longer-term strategic acquisition and retention plays
First up, your ICP should show you clearly which prospects to pursue and which to ditch. And that’s not just in theory!
The efficiency gains an ICP can provide are all about how you use it. Automated fit definition and disqualification for prospects is a great start. Through using your ICP to inform both highly-targeted ad campaigns and the implementation of a form strategy on your website, you can both target the correct accounts and segment them immediately as they convert. That leads to better prioritization for your marketing and sales teams, and better customers, too.
Capturing high-fit prospects drives your win-rate through the roof. But it also can assist with employee and customer satisfaction: When people find the product or service intended specifically to deliver value to their company, both teams prosper.
While an ICP won’t tell you the feelings and sensibilities that come with the psychographic information of a persona, it will tell you the environment in which those personas live, giving you insight into the possible range of issues they may encounter in their positions and as members of a buying committee for your product.
Understanding the details of that buying committee and the company where it functions allows you to dial in the form strategy and automation mentioned in the last section of this post. But it also allows you to plan for the future.
Let’s say you wanted to increase deal value but you didn’t know where your best deals came from or what those high-value customers had in common. Finding that data would be the first step in developing an ICP. Using that developed ICP, you could then pursue it more efficiently and re-examine it to shape growth strategies. At New Breed, for example, an analysis of our ideal customer profiles and a simple reallocation of resources allowed us to increase our average deal value by over 152% in just three years.
The quantitative benefits of putting data like that to work for your strategy are just one piece of your long-term success. ICPs can also help you plan for product health. It’s self-evident: You won’t be able to collect good data about how your customers are using your product unless you have the highest quality customers actually using your product. That feedback is critical to your product direction — so it’s critical that marketing and sales have aligned around the common target to connect the customer with the product they need.
So, whether your long-term growth goal involves increasing deal value or improving your product incrementally — or anything between — the first step toward reaching it is clear. Segment your data, and find the firmographic bands where your ideal customers sit.