Ideal Customer Profile (ICP)
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A Ideal Customer Profile (ICP) is a profile of a customers.
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- Example(s):
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- See: SDR, Sales Plan, Marketing Plan, Marketing Strategy, Qualified Lead.
References
2023
- https://fireflies.ai/blog/icp-sales
- QUOTE: An Ideal Customer Profile (ICP) is like a sketch of your ideal customers. It describes an individual or another business most likely to benefit from and purchase your products or services.
ICP in sales represents who your customers are, what they want, and why they need your products or services. The right ICP helps you tailor your sales emails, demos, pitches, and proposals to address the customer's needs and desires. It enables you to narrow your target market and focus on only those customers with the highest intent to buy from you.
- QUOTE: An Ideal Customer Profile (ICP) is like a sketch of your ideal customers. It describes an individual or another business most likely to benefit from and purchase your products or services.
2021
- https://www.gartner.com/en/articles/the-framework-for-ideal-customer-profile-development
- QUOTE: The ICP is a foundational, organization-wide decision impacting downstream sales and marketing efforts. It aligns marketing, sales, service and executive teams to the highest-value accounts. It also creates focus on scalable and repeatable strategies and tactics to engage and convert top accounts. And it drives target account list creation, segmentation, organizational structure and other key activities.
- Research into ICP development practices has found that in some companies, the ICP is either poorly understood as a concept or not properly defined. Even in companies that have defined an ICP, its use is limited to marketing briefs or new hire orientation sessions.
By contrast, in high-growth companies, the ICP is integral to marketing and sales strategy and execution, and we have documented the practices of these high-growth firms.
Takeaways include the following:
- The ICP is a critical, strategic document that guides key downstream efforts. An effective ICP requires close consultation with key stakeholders, careful analysis of data and thoughtful implementation.
- The goal of ICP development is simple: Identify the accounts most likely to become high-value customers. Objective measures of value like annual contract values (ACV) and lifetime values (LTV) facilitate the segmentation of target accounts and go-to-market alignment.
- The ICP is developed by gathering and analyzing qualitative, quantitative and (optionally) predictive data. Gathering qualitative inputs through close interaction with stakeholders leverages the organization’s diverse expertise and fosters cross-functional buy-in.
- Quantitative analysis of historical prospect and customer data helps identify the common attributes of the most (and least) valuable accounts. Analyze data from CRM, ERP and other systems to identify firmographic, environmental and behavioral attributes that correlate to value (e.g., ACV and LTV).
- With adequate data access and guidance, third-party predictive analytics vendors can enhance ICP development. Use this software to analyze large internal and external datasets to reveal additional attributes that correlate to high-value accounts.
- ICP segmentation allows organizations to tailor go-to-market plans based on expected value. Assign accounts to tiers based on expected ACV or LTV. Then define the account team structures, offers, plays and target lists that are appropriate to each account tier.
- ICP development is not an academic exercise. It is a plan for action. Now that it is complete, the ICP must be shared across the entire organization and embedded into sales and marketing programs.