Carving out your ICP

Posted on 5 Dec 2023 by The Manufacturer
Partner Content

Founded in 2000, Intergage specialises in bespoke marketing strategies for the manufacturing and tech sectors. With a wealth of knowledge in content creation, marketing strategy, and the new concept of buyer enablement, Intergage's mission is to help their clients win better business.

Knowing exactly who to sell to is one of the main linchpins for successful business growth. It might sound obvious, but we’ve come across businesses time and time again who have a vague idea of who their Ideal Customer Profile are but with little substance. Instead of dealing with elusive prospects, and insufficient targeting that leaves your targeted audiences wide and unspecific, you could focus in on those with the greatest chance of buying. With only 47% of forecasted business being closed, targeting those most likely to buy is a no-brainer.

What is an Ideal Customer Profile (ICP)?

An ideal customer profile (ICP) is a detailed and well-defined description of the type of customer or client that a business or organisation believes is the most valuable and most likely to benefit from its products or services. This profile is created through the analysis of various demographic, psychographic, and behavioural characteristics of existing customers who have shown the highest levels of satisfaction, loyalty, and profitability.

Key elements typically included in an ideal customer profile may encompass:

  • Demographics: Information such as age, gender, income level, location, industry, company size, and job title that helps narrow down the target audience.
  • Psychographics: Insights into the values, attitudes, lifestyles, and interests of potential customers, which can provide a deeper understanding of their motivations and decision-making processes.
  • Pain Points and Needs: Identification of the specific challenges, problems, or needs that the ideal customer is likely to face, which the business’s products or services can address effectively.
  • Buying Behaviour: An understanding of how the ideal customer typically makes purchasing decisions, including factors that influence their choices and the channels they use for research and buying.
  • Purchase History: Information on past purchasing behaviour, including the frequency of purchases, average order value, and customer lifetime value.
  • Customer Journey: Mapping out the stages through which an ideal customer progresses before making a purchase, from initial awareness to consideration and ultimately conversion.
  • Competitive Landscape: An assessment of the existing alternatives or competitors that the ideal customer may consider when seeking solutions to their problems or needs.

With an increasingly complex buying journey taking over in the world of modern B2B sales, having a set of directions which point you towards your ideal customer is crucial. You need to be able to find high-value buyers easily and quickly, lest you spend time and money chasing a sale that doesn’t quite fit right.

Understanding your ideal customers’ characteristics and having awareness of their common challenges provides a foundation for the strategies you’ll use to reach them. Rather than attracting infinite leads and buying into vanity insanity, your efforts should focus only on those perfect-fit customers – the people who bring in most of your revenue. Ideally, they’re the 20% of customers who generate 80% of your revenue.

Your ICP, then, is a smaller part of both the Total Addressable Market and the Service Addressable Market. Simply, the TAM is anyone you could sell to, while the SAM is the reachable market. The ICP sits within both of these, and is decidedly smaller: they’re the reachable, realistic, ‘perfect fits’.

You may think you already have a good understanding of your perfect-fit customers: perhaps you target ‘construction companies’ or ‘companies who make things’. But these are still broad terms, and they don’t account for any quantitative or qualitative variables—how many employees do these companies typically have? What’s their annual turnover? What culture do you want them to have? What custom criteria make them a particularly good fit for your products and services? These questions are simple, but they’re already narrowing down your ICP meaning marketing budget and effort can be focused on attracting only the best fit customers.

By defining your ICP further than broad categories, it is easier to tailor your sales and marketing strategies to your ideal customer’ overlapping pain points and concerns. You, and your content, need to serve them as partners and educators, rather than focusing on the sell, sell, sell of yesteryear. In a nutshell, it means you can work smarter, not harder.

Other benefits of identifying who your ICP really are include:

  • Concentrating your marketing budget on only winning the customers that are the best fit for you as a business.
  • You’ll have the ability to tailor your messaging to appeal directly to these potential customers.
  • You’ll enjoy higher conversion rates.
  • It’s much easier to build brand recognition and better product development when you have a more focused audience.

So, how does the ICP development process work?

ICP development has three key stages:

  1. Considering your current ICP
  2. Customer interviews
  3. Sales team interviews

At Intergage, we have a well-defined process that focuses on looking at your existing customer data and interviewing individuals from your best customers. From this we can understand who truly are your best customers, what demographic they fit into and why they chose to work with you.

Once we know their characteristics, behaviours, and demographics, it’s easier to build buyer personas. In combination with a mapped-out buying journey, taken from your existing customers, these provide a good framework for understanding the motivations, pain points, and decision-making processes of your perfect fit customers.

With all this information in hand, it’s far easier to outline the key attributes that make a prospect a perfect fit for your company.

First and foremost: a solid ICP helps define who you should be marketing to. These are the types of customers you’ve already worked closely with, and so you’re well-placed to solve their pain points. Tailoring your marketing towards this group of ‘perfect fit’ prospects enables less wastage of precious marketing resources (pay-per-click and sponsored ads don’t come cheap!) and can increase ROI.

And then your sales team has an easier job. It’s easier to turn ICP-aligned leads into customers due to a simple fact: you have pre-existing experience and content aimed at companies just like them! Simplifying the sales process whilst being able to include personalised recommendations of helpful content ticks two massive boxes: personalisation, and expertise. Knowing your ICP inside out enables you to leverage this knowledge to great sales effect.

But beyond getting customers in, there’s value in retaining them, too. Knowing the common pain points your existing and target customers face means you can tailor your product and service offering to meet their needs—enabling easier retention and sales. Delighted, and retained, customers spend on average 33% more than first-time customers.

These results are great and all, but the crucial part is implementing your ICP. How do you get buy-in and acceptance from the spectrum of departments involved in customer service, sales, and marketing?

First: alignment. Your marketing strategy needs to incorporate your ICP in its messaging, content, and advertising. You know your ICP’s pain points, so now it’s time to put those into action through implementation. For manufacturers, this may mean developing content that showcases your industry expertise, highlights your USPs and addresses the pain points you’ve already discovered.

Your sales team’s job can actually be streamlined if they’re implementing the results of your ICP research. Personalising pitches and prioritising certain leads due to their suitability in line with your new ICP can make these leads more likely to convert.

Just bear in mind that developing an ICP is not a one-time task; it’s an ongoing process. The world is rapidly changing, and manufacturing isn’t exempt. Markets evolve, customer preferences change, and new challenges arise, and it means you’ll have to assess and potentially refine your ICP as new data becomes available.

The key is to adapt based on data—not on ‘vibes’.

Want to learn a bit more? Take a look at our ICP development process here!