Without a well-defined ideal customer profile (ICP), product development and go-to-market decisions become guesswork instead of rooting them in a clear, informed strategy. That leads to a fragmented approach across teams– not to mention wasted resources. A clearly defined ICP aligned with an existing business strategy lays the groundwork for building the right products and marketing them to the right people, in the right places, at the right time.
Whether your ICP needs defining or just needs an update, we’ll break down how to analyze data to create or refine your ICP, validate it, share it across departments to key stakeholders, and- most crucially- keep refining it over time to keep it accurate.
This approach pays your organization back in dividends over time because you’re not just creating products based on who you think your customers are or what you think they want. You’re building for real people based on what they actually need to get their jobs done.
The first step is assessing where your ICP is at this moment in time: does it exist? If your company hasn't built one out, search for an ideal customer profile template you can work from. If your company does have a defined ideal customer, when is the last time it was updated? If it was more than a year ago, it's time for a refresh!
Depending on what stage your organization is, you may need to revisit your ICP and tweak it more frequently. An established enterprise company, for example, may only need to do an annual review while a newer startup should reassess quarterly to ensure its marketing and sales strategies around its ICP are aligned.
Here’s how.
In our data-saturated world, collecting the right data and analyzing it efficiently is key. In this case, you need to build on basic customer demographics to build a bigger, more detailed picture of who your customers actually are.
Most organizations collect basic demographic data including:
The best organizations build on this to include more advanced data:
This sets you up to create product features and tailored marketing efforts that resonate with your ideal customer, building brand loyalty over time. It also sets the sales team up to understand exactly who they're talking to as a target customer.
As a point of clarity, the ICP more broadly describes the ideal customer as in the business or organization that benefits the most from your offerings and brings the most value to your business in return. In contrast, a buyer persona is a more detailed representation of your ideal customer put together from combined data about your existing customers and market research.
Both are crucial for sales and marketing teams to build strategies tailored to specific customer segments.
Paying attention to how your customers interact with your product, features, and all other touchpoints with your brand gives you valuable information about their needs and preferences. If you know exactly how someone uses your software, you can design a better experience that accounts for areas of confusion leading to drop-off points in engagement. Your team can take that information and build a better onboarding experience if new customers find your products or features too complex.
Be sure your team is tracking:
Ultimately the product team will have the information they need to prioritize the roadmap in a way that gives customers what they need– and drives business forward.
Nothing happens in a vacuum so your team needs to account for economic factors that have the potential to impact your ideal customer. The larger economic environment is the biggest one; even if your industry is stable and so are your customers, larger economic anxiety can still impact stakeholder willingness to spend.
In uncertain economic times, it’s important to craft marketing efforts emphasizing how your product can help save money or other key resources (like time) in the long run. That boosts consumer confidence in your product, highlighting it as a wise investment.
It’s also important to understand broader market trends to help anticipate shifts in consumer behavior and strategize appropriately.
Segmenting customers based on tracking data is the best way to craft a targeted approach to marketing and other communications touchpoints with them. While you can segment in numerous ways, one of the best uses of organizational resources is segmenting based on value.
Not only does this help define customer lifetime value for your organization, but identifying the key components of the highest value customers gives your sales and marketing teams the tools they need to cultivate more of these relationships. Many teams segment based on geography or basic demographics, but the best teams dig deeper to find common threads in their customer data.
Consider:
The highest-value customers should get the highest touch from your customer-facing teams and your product teams. These are the most highly engaged customers who are already deeply invested in your products and eager to test new features; continuing to invest in this relationship has the best potential for long-term payoff.
If you’re tracking all of the data outlined in the section before this, you can identify which customers are likely to become high-value and have the most long-term customer potential. Don't just collect that data; ensure it's efficiently analyzed and proactively delivered in an actionable format to the teams who can use it in their day-to-day interactions with prospects and customers.
These insights should help guide product development decisions, including which new features and products are prioritized on the roadmap. If there’s a clear need for a certain feature that high-value customers are clamoring for, prioritizing that feature makes the most sense. Testing it with the most highly engaged customers and refining it based on their feedback before a wider launch means you can use that information to build a marketing strategy that will convert other customers, including your target customer.
Proof that adopting a specific feature saved your early adopting customers X amount of time, money, or another metric that’s invaluable to their success will hook prospects and make them more likely to convert. The sales team should be equipped with this information and ready to tell the story of how your specific products and features can alleviate the pain points of your ICP.
Once you’ve built out your buyer personas from your wider ICP, it’s crucial to validate them with thorough customer research. It’s one thing to have an idea of who your customers are and another thing to back it up with data. Skipping this validation means you might miss a key customer demographic and fail to keep them engaged over time, potentially losing that market share to your competitors who are paying attention.
Robust customer personas are built out on rich profiles pulling together the key attributes of the customers you’re targeting. These buyer personas should include everything laid out in the demographics section along with the specific pain points they face in their role and how your organization can solve them. What needs does your ICP have and how can the products and features you design help solve them? How can you present that case specifically to the buyer persona, overcoming any objections they have?
Consider a range of different scenarios so your customer-facing teams can craft messaging and outreach tailored to each one. If your product is designed specifically for Product Managers, for example, but can also be used by the wider marketing team, be sure your customer-facing teams know how to talk through each use case in detail.
If you don’t, you run the risk of your competitors identifying any gaps and swooping in to fill them.
Once you’ve built out those buyer personas, they need to be validated. Continuing to collect data about customers and prospects will help, but the best teams take it further by conducting interviews, regular surveys, and finding other ways to gather direct customer feedback.
Consider:
Other sources of direct feedback to tap into include setting up a way for customers and customer-facing teams to submit feedback directly to the product team about products and features, checking any public reviews, and collecting feedback in person at industry events.
Ideally, all of this feedback will be sent to a central source of truth, analyzed for common themes, and turned into actionable data for the product team to work from.
Once you’ve built your personas and gathered the data necessary to validate them, it’s important to refine the ICP that you’ve built based on the real-world data and feedback you’ve gathered. Never get too attached to one idea of who your customer is; they might have changed over time or you might have misunderstood who they were or what problem they were trying to solve to begin with.
Customers sometimes think they know what they want or need to solve a problem but when you talk to them about the problem they're trying to solve, they need something entirely different instead. Doing the work to gather and analyze the data ensures you don’t waste your time or theirs on building the solution to the wrong problem.
Most importantly, be sure you’re checking for wider alignment with market realities when refining your buyer persona. The sample of customers you’re tracking needs to be representative of a wider group so you’re not just targeting a small niche that may have unique challenges and use cases.
Alignment across teams is crucial for success and clarity on your ICP is no exception. Truly understanding not just who your customer is on the surface- their age, job, and education- but the pain points they face in their daily work and how your product specifically can solve them makes all the difference in your different team strategies.
For customer-facing teams- the sales team in particular- it's crucial to know how to talk to each buyer persona inside of your ICP to lead them through the smoothest possible sales process ending in conversion.
Sales teams need to make it clear to your ideal customer that they understand both the job they are trying to do and the specific pain points associated with that job. That helps them tell the story of how your specific product and features can help address those pain points and make their job and life easier.
Marketing teams need to tell the same story in a slightly different way, through different formats. The key is to reach your ideal customer where they like to spend time and talk to them in a way they like to be addressed in their preferred format. That might mean a slightly different approach for the various buyer personas you’ve developed and refined.
For product development, clarity means uncovering not just what customers say they need but the truth behind the problem they’re trying to solve– or the job they’re trying to get done. Distilling that means your product team can build the products and features necessary to directly address those issues.
Just sending out an email with a PDF attached outlining your ideal customer and buyer personas isn’t enough. To ensure that teams truly understand consistently who your ideal customer is, you should hold regular cross-departmental workshops.
Team alignment is crucial to make sure that while the product team is developing features to solve the ICP’s problems, sales and marketing know how to tell that story in the most effective way possible to buyers. Customer success can help guide customers through any sticking points and keep the feedback loop back to the product team open.
Documentation around your ideal customer needs to live in whatever central source of truth your organization designates for all teams to be able to access the information and assets they need to do their job as efficiently as possible.
Communication around updates to any documentation in the single source of truth- including about your ideal customer and buyers- should be proactively pushed out. That way no team has to search fruitlessly for what they need, interrupting each other's work days to hunt down the latest update.
A customer-centric approach built around your ideal customer keeps your strategy aligned across your organization, guiding day-to-day operations and ensuring decisions are made with the customer in mind.
Long-term planning should have the same focus; if helping customers is your ethos, they’re more likely to stay engaged and loyal. That ultimately reduces churn and drives revenue growth over time.
Once you’ve defined and refined your ideal customer, you’ll still need to revisit and further refine it regularly. Markets and customer preferences can change and you don’t want to be left still talking to an outdated version of your customer in a market that has moved on around you.
Combining regular market research with all of the check-ins and customer touchpoints laid out in the previous section keeps you primed to stay on top of changing market conditions. That keeps your team agile and able to shift your strategy, avoiding frustration and increased fragmentation in the wake of having to throw away months of work on the wrong problem or building the wrong product.
Teams should think of product offerings in terms of the next evolution of what the customer needs, anticipating the problems they’ll face as technology and professional challenges grow and change. Building products and features ready to take on those challenges will keep customers engaged and loyal.
Keeping an eye on the competition is an important aspect of keeping up with industry trends. Never aim to copy your competitors; a reactive strategy will keep you at least one step behind. Instead, think about how you can solve your ideal customer’s problems better than the competition is.
Even with similar offerings, how can you stand out? Think of better customer service, smoother onboarding, and a more seamless brand experience throughout the customer journey. Keep the customer at the core of your vision, always aligning your business strategy to their needs.
Carve out dedicated time in your teams’ calendars to regularly revisit your ideal customer and update it, ensuring all updates are seamlessly uploaded to your organization’s single source of truth and proactively pushed out. How regularly you do this will depend on your industry, organization size, and other factors including market volatility. Large enterprise companies may only need to revisit annually, while smaller startups should revisit at least quarterly.
The main reason for this ongoing work is to be sure you’re not working based on assumptions about your ideal customer, but catering to their needs and desires based on a combination of data and direct feedback. Remember that sometimes what a customer tells you and what their behavioral data says they actually do can be two different things. That’s why it’s important to track, catalog, and analyze both.
This keeps your work focused on the real actions of your ideal customer, ensuring that your products and features are relevant and accurately attuned to the pain points of your best customers and high-quality leads.
Combining the behavioral data of your prospects and customers with direct customer feedback and any market research available to you will help keep you ahead of market shifts. Teams who make space for this kind of work can keep their go-to-market strategies nimble because they only require some fine-tuning in the face of change. Teams who don’t make space for this face the unpleasant prospect of needing to redo months of work, which is demoralizing at best and faces steadfast resistance leading to a drop in revenue at worst.
Customers want the organization they buy from to stay relevant, which means employing these proactive and adaptive approaches.
A clear ideal customer profile and buyer personas keep your teams aligned across your organization, avoiding a fragmented approach where every department is talking to a slightly different version of your target audience. Fragmentation like that wastes resources, including time, as every team duplicates work and leaves customers and prospects feeling confused about how well your organization knows them and their needs.
Ideal customers also change over time, needing to be regularly reevaluated and refined through a combination of targeted data collection and market research. Building these processes into your team’s workflows ensures proactive ICP and buyer persona management, instead of leaving teams scrambling to catch up to customer needs– and the competition.
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