How you can become more strategic with your Ideal Customer Profiles (ICPs)?
As your business grows, you have to become more and more strategic about the prospects or potential customers you go after. The more you go after the wrong customer, the more you waste resources elsewhere. The key here is to be very intentional about who your “right” customers are.
What is an Ideal Customer Profile (ICP) anyways?
A customer persona represents your ideal customer based on market research and real data about your existing customers. When you know your customer persona, you can better target them with your marketing and sales efforts.
Once you have defined the profile of the ideal customer or ideal customer segment, your operational go-to-market engine needs to align with that profile. Operationally, it all starts with selling to the right customer(s), which means starting at the very top of your revenue funnel. Marketing must target the right kinds of customers, and sales must quickly disqualify those who aren't a great fit, going beyond typical methodology and key qualification steps such as budget, time frame, and executive sponsorship.
How can you start building out your customer personas?
Here’s a quick guide on how to get started with defining your ICP no matter what stage your organization is in:
Give your persona a name and write a brief description.
Describe their demographics, including their job title, company size, location, and any other relevant details.
Outline their goals and challenges. What are they trying to accomplish? What obstacles are they facing?
Explain how your product or service can help them overcome these challenges and achieve their goals.
Describe their decision-making process. How do they research solutions? Who do they talk to before making a purchase?
Identify what kind of content they consume. What blogs do they read? What trade publications do they subscribe to?
Create a list of keywords that describe your persona. These will be useful later when you create targeted content.
What could their potential tech stack be, and does it fit your product?
Once you understand your customer persona well, you can better target them with your marketing and sales efforts. You can also adjust your products or services to meet their needs better.
If you need a more strategic way of defining personas, the stage your organization is in really matters. Here are the frameworks that have worked for me in the past.
Pre-Seed & Early-Stage
You are a newer company at this stage, and data might be more limited. The best approach is to get all your major stakeholders in a room together and start building out your personas by using your best assumptions on whom you think could be your customer personas based on the 8 quick how-to guide I have provided above.
Then when you start marketing and selling, this is your time to get more analytics involved. Use A/B testing to see what personas give you the highest leads, win rates, pipeline, and pipeline velocity. This is a quick way to get a pulse on your potential personas. Never stop testing, continue this process even as the business matures.
Personas should never be stagnant. As your business and market conditions change, so will your personas. Review them every 3 months to ensure you can grow the business and meet your goals.
Mid-Stage to Mature Organizations
So you have been selling your product or service for some time but noticed that growth is slowing. This is the time to get more strategic with selling, and data can be your best friend.
Start by segmenting your customer base using criteria that are important to you. For example, you could segment by industry vertical, company size, and other firmographics. Also, you have data on what customers have churned vs. customers who have strong upsells/cross-sells over time that can be overlayed with product usage data and tech stack data points.
This will give you a starting point for understanding which of your personas are most valuable and where you want to focus your sales efforts. You can even be leveraged to score leads and prioritize them better, and it can be used for your TAM/SAM/SOM analysis.
How do you keep a pulse on the personas built?
Look at your win/loss rate for each persona. Which ones are you winning the most with? Why? Is there something you could do differently with the ones you are losing? Maybe each customer persona buys differently than the way your selling process is set up. This is a continuous effort, as things can change anytime.
Finally, look at your average deal size for each persona. Are there any trends that you can see? Are there any commonalities between the larger deals? This can help you understand what deals are worth going after and which might be less profitable.
Persona analysis can help you focus your sales efforts, score leads, and understand what deals are worth pursuing. When you’re looking at your personas, there are a few things you want to keep in mind:
What is the value of each persona to my business?
What is the lead/pipeline velocity for them?
What is my win/loss rate for each persona?
What is my average deal size for each persona?
What are the Churn and NRR metrics for each persona?
Understanding these factors can help you make more strategic decisions about where to focus your sales efforts and how to pursue them differently.
