Imagine being a fly on the wall of this conversation:
Investor: Who do you sell to?
CEO: We sell to mid-market companies.
Investor: Tell me more.
CEO: We sell to mid-market companies that want to buy our product.
Investor: And who needs your product?
CEO: (Uh…) The companies that buy it.
Cheeky? Yes.
Unrealistic? Sadly, I’ve seen exchanges that would resemble this, albeit with more polished language.
Why “Ideal Customer Profile” Matters
Last week, I wrote about the importance of a company’s North Star. It defines why you exist and what problem you’re solving.
But once you know your North Star, you still need to answer the next question:
Who is the best customer for us to focus on?
That’s what an Ideal Customer Profile (ICP) is meant to do.
IMPORTANT: This is NOT a marketing exercise. This is a GO TO MARKET exercise.
Without a solid ICP, we all suffer by casting too wide a net, chasing the wrong prospects or somewhere in between.
I admit, minimizing the importance of a solid ICP is easy to do. Or assigning the task to marketing since “it’s merely a targeting exercise” [wrong].
I’ve made this mistake myself. When I overlooked ICP, we lost clarity on who to target, what to say, where to find them and even what to offer them.
ICP – More Than Firmographics
A slightly sharper version of the mock conversation above might have gone like this:
“We sell to mid-market companies located in the western U.S. with between 1,000 – 5,000 employees”.
That’s clearer…but not much.
Too many ICPs stop with firmographics: industry, size, location. But that’s just the lake we fish in.
Claiming firmographics as synonymous with ICP is like showing up at the lake armed with nothing more than a fishing rod and some generic bait. Yes, you’ll catch some fish. But will they be the right ones?
To find the right fish, we need more:
- Psychographics: How do they think?
- Buying behaviors: How do they make decisions?
- Triggers: What events cause them to act now?
- Pain points: What problem hurts enough to fix?
The best ICPs combine firmographics (i.e., the lake) with these deeper insights (i.e., the bait).
A Story: Relief Band and the Trap of Too Many Customers
Last week, I wrote about my father-in-law’s invention, the Relief Band, a drug-free device for nausea. I’d like to continue using this as an example.
With this invention, a solid ICP could have served as the necessary focus. Consider that the potential markets for this product were reasonably large and included:
- Pregnant women with morning sickness
- Post-op patients
- Chemotherapy patients
- People with motion sickness
Each group looked promising. Each had a real problem.
And that abundance became the trap.
If asked for their ICP, they might have answered “We sell to anyone suffering from nausea”.
That’s a huge lake. But what bait should they use?
The messaging and tactics to appeal to pregnant women certainly differ from those needed for selling to people with motion sickness.
Pregnant women will be concerned with the safety of their child while people with motion sickness will simply want to know if it works for them.
Both are potential markets, both tie back to the North Star, but they are not the same customer.
Yet, they tried to pursue them all. Resources were spread too thin. No segment got the consistent focus needed to build traction.
The result: the company was sold before gaining real market traction. The product was solid (it’s still sold today). But the company lacked a clear, prioritized ICP.
Don’t Overlook The “I” in ICP
The lesson is simple: don’t chase every customer profile.
Rather, we need to stop. Pause. And consider the “I” in ICP.
“Ideal” isn’t who could buy. It’s who should buy, relative to our business at the moment.
That means forcing tradeoffs in areas such as:
- Who pays the most (or values it most)?
- Who buys fastest?
- Who is easiest to service?
- Who builds credibility with others?
We can’t realistically choose “all of the above” and be successful.
We must have clarity.
And these questions show further why stopping at firmographics is insufficient in defining our ICP.
How does “anyone suffering from nausea” or “mid-market companies” help us determine what is ideal for our business?
That’s rhetorical…
How Many ICPs?
Another common question is whether we can have more than one ICP.
The technical side of me says we can only have one, since “Ideal” implies one.
But business is rarely that neat.
The real trap is failing to prioritize.
Let us not forget the beginnings of Amazon. Amazon started with sending physical books. No Kindle, No Audible, No AWS, No everything. Physical books – not even digital books!
Not because no one else mattered, but because books met their then definition of Ideal: high demand, easy to ship, and credibility-building. That beachhead created the foundation to expand.
The Relief Band could have followed a similar path. With a clearer ICP, they might have chosen one market (e.g., sea sickness) to establish traction, then expanded to others. Instead, they diluted their efforts.
Putting It Back Together
To recap:
- ICP is more than a marketing exercise. It is a Go To Market exercise.
- ICP is more than industry, size, geography.
- ICP should address:
- Psychographics: How do they think?
- Buying behaviors: How do they make decisions?
- Triggers: What events cause them to act now?
- Pain points: What problem hurts enough to fix?
- ICP should be Ideal for our business at that time.
And, finally, for most of us, we need to prioritize. Having multiple ICPs only works if we have unlimited resources. Best advice is to start with one and only expand once our market penetration and revenue growth allow for extending our focus.
Try This
Review your own ICP.
- Is it simply industry and company size?
- Does it tell you what bait to use to target?
- Does is force tradeoffs?
- Does it help you say “no”?
Want some feedback? Share it below or send me a note.
We help companies assess and refine their Go To Market engines.
Note: This post is the second in a series exploring the building blocks of a solid go to market strategy. Next up: properly defining Buyer Personas. Hint: it’s more than clever alliteration.
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