Most companies think they know their target customers, but it’s usually vague, unfocused, and ultimately ineffective.
In this article, I’ll walk you through an actionable step-by-step approach to creating an Ideal Customer Profile that will sharpen your marketing, supercharge your sales, and drive real growth.
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Backstory: I had an 8-figure exit a couple of years back. It was a B2B SaaS-business in the. We started out trying to appeal to everyone, thinking more people means more chances to sell, right? WRONG. Turns out, trying to be something for everyone means becoming nothing for everyone instead. We pivoted and focused all our efforts on a very specific customer segment - and the business exploded as a result.
An ICP is a highly specific and precise profile of the customer who will get the most value from your product and, in turn, give the most value back to your business.
What is an ICP and Why Does It Matter?
An ICP is a highly specific and precise profile of the customer who will get the most value from your product and, in turn, give the most value back to your business.
When you have a solid ICP, everything aligns. Your marketing resonates, your sales team knows exactly who to target, and you can focus your resources on the people who really move the needle. Without an ICP, though, you’ll find yourself wasting time and money on leads who aren’t likely to convert or stay long-term.
Let's take a look at how to create your ICP.
6 Steps to Finding Your ICP
Step 1: Understand the goal of an ICP
Focus is everything when it comes to growth. The goal is to choose a single, primary customer profile to target. Many businesses make the mistake of trying to appeal to multiple ICPs, but that just spreads your resources too thin and confuses your messaging. Ask yourself:
- What urgent problem does my product solve for this customer?
- Why does this group need my solution more than others?
The key is to pick a customer that you are important to. Someone who truly needs your products or services. The more they need you, the easier they are to sell to.
Step 2: Move Beyond a Wishlist
Your ICP shouldn’t be a “wishlist” of potential customers. It shouldn't be who you want to sell to. It should be the people who truly need you.
You want to build a detailed profile based on real needs and pain points. Be specific. Define the customer not by who you wish they were but by who they actually are and what they truly need from your solution.
Step 3: Qualitative Analysis
Understanding why your ICP needs your solution—rather than merely why they could use it—is essential to finding customers who will actually buy and stay.
The goal with a qualitative analysis is to figure out why people buy your product - and who gets the most value out of it.
How to do it?
Here are a few steps:
Gather Insights from Your Team
Your sales and customer success teams are on the front lines. They know who your best customers are—and who your worst ones are. Start by asking them questions like:
- Who is our best customer and why?
- Who’s our worst customer?
- Which customers respond best to our communications?
- Which customer is happy to tell others about us?
Review Customer Service Interactions
Customer service records reveal common issues and pain points among your customers. Analyze these interactions to better understand the challenges your ICP faces. Your best customers are involved and ask questions about your product, but they aren't complaining or trying to end the relationship.
Now, you might think that the best customers are the quiet ones - the ones that never bother you? This is not necessarily correct. You have no way of gauging how important you are to the, You want to have a dialogue with your customers and you want them to be involved and interested in what you're doing.
Use Customer Feedback to Understand Needs
Study reviews and surveys to understand what customers like and dislike about your product.
Often, the most valuable reviews are the 3 or 4-star ones. One-star reviews are from people who strongly dislike you. Of course, it's valuable to find out why, but they most likely aren't your ICP. On the other hand, the 5-star reviews won't give you much useful info except stroking your ego and confirming how great you are.
The 3- or 4-star reviews, on the other hand. These are people who really want your product to be right for them, but some small detail is missing. Figure out what that detail is, go and tell people that you've fixed it - and you'll likely have tapped into your ICP.
Step 4: Quantitative Analysis
Now, happy customers aren't everything. They also have to be valuable to your business.
The goal is to use quantitative analysis to figure out which of the earlier segments are actually driving real revenue.
Analyze key metrics like:
- Win rates (How likely are they to become customers)
- Churn rates (How likely are they to leave)
- Lifetime Value (LTV) (How much money are they spending with you)
This analysis will help you identify the most profitable, loyal customer segments so you can focus on them.
Step 5: Combine Qualitative and Quantitative Data
Once you’ve gathered qualitative and quantitative insights, it’s time to merge them. This is where you start seeing trends that point directly to your core customer. Focus on those who not only buy but stick around, bringing the most value over time.
The goal is to identify a clear segment that you are important to - who is also willing to spend a lot of money with you, and is likely to stick around for a long time.
You want to be able to very clearly state who you are for - and it should be as narrow as possible.
Let's say you have a service that helps people successfully operate a business. Your ICP should not be "anyone who wants to learn how to run a business". That's way too broad. It should be something like "Investors and searchers who acquire mid-market businesses and want help training and aligning their operators" (hint hint).
Step 6: Take Action Based on ICP Insights
Now that you have a solid ICP, put it into action. For this to work, the whole organization needs to be aligned with this customer profile. Marketing should be creating campaigns specifically tailored towards this customer. The sales teams should only work this vertical, and work it until there is no more room to grow. In every team meeting, you should be dicussing if there's anything else you can do to service this particular customer.
In other words, you have to align your culture towards your ICP.
If you do these things, you'll multiply your operational efficiency, and your revenues and profits will go through the roof. Everything just becomes easier when you know exactly who you're selling to.
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