Why choosing an Ideal Customer Profile (ICP) matters
What is an “Ideal Customer Profile”? An ICP is a customer who gets the most value from a product or service, and because of this, they will pay you more than customers who get less value.
You can, of course, sell to anyone who wants to buy. At first, you might think that there’s nothing wrong with selling to someone prepared to pay you for services or products you’re able to deliver. All good, right? Well, not really. There are three reasons why choosing an ICP should matter a lot to you, your business, and your future.
1) Your future depends on it
Since a clearly-defined ICP determines your messaging, your targeting, and who your ideal customer is, it surely determines the future of your business. The kind of customers you have will heavily influence the kind of organization you will be part of. How will you serve your customers? How will you adapt to their feedback? How will you invest in product or service enhancements based on their willingness to pay for them? Imagine if you have the wrong client, for example, with limited budgets or lengthy buying cycles; this type of client could actually steer you in the wrong direction or even kill your company.
2) Laser-focused strategy, process and messaging
Just think about it. The more generic your messaging, the less likely it is to truly hit home. You have to push those magic buttons. You have to make your prospects and clients feel that the value proposition is for them. The more they feel it’s about them, the better the chance that potential deals will convert. They will click faster, begin a dialogue with you faster, and accept your proposals faster. Everything can move more quickly because you have chosen a profile that attracts accounts with which you share common characteristics. Most companies are reluctant to choose because they simply want too much. More focus leads to more insight, which in turn leads to accelerated growth.
3) Value being valued
Not every client will actually like your product or service or will use it in the proper way. When a company is not using your proposition the way it was intended, there is a risk that little value will result from it. These clients will complain and will be reluctant to buy again or renew; they won’t grow and won’t refer you to new clients. They will slow you down and take you to the wrong place. Do you know that 80% of your company’s future revenue will come from just 20% of your existing customers? (source: Gartner)
When customers fit better with the characteristics of your ideal customer profile, there is an increased chance that they will get more value out of your product or service. They will pay more for the initial purchase, renew, and buy additional modules or features, therefore their Customer Lifetime Value (CLTV) will increase. These companies will be your key clients, your strongest ambassadors. They will be your reference clients who will help you attract more clients that fit your ICP and this will help you on your path of being a strong player in your market.
We know that the ICP is a hot concept in the market today, but the challenge doesn’t stop at merely defining your ICP—companies need to act on it. Having numerous ICPs creates a lack of focus. We here at SalesPlaybook.pro have experience in guiding companies through the process of devising their ideal customer profile, which will enable them to adjust their strategies, processes, and messaging.
Read Chapter 4 of our FREE Sales Playbook Guide to find out more about how you can identify your Ideal Customer Profile.
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