what is an icp; two people shaking hands

What is an Ideal Customer Profile (ICP)? A Complete Guide

What is an ICP?

An ICP, or Ideal Customer Profile, is a detailed description of the target audience that helps businesses create effective marketing strategies and connect with the right customers.

When you develop a marketing campaign, you always want to know who you’re marketing to, or else your wasting valuable resources. So what is ICP in marketing? With an ideal customer profile (ICP), you’re always in the know about who your campaigns are trying to reach.

Imagine you’re gift shopping, but you haven’t been told who you’re shopping for. You have to spend time, money, and effort on a gift that you’re not even sure the recipient will like. Doesn’t sound very fun, does it?

Just like gift shopping, when you develop a marketing campaign, you need to know who you’re creating your campaign for. That’s where your ICP comes in.

But what is an ICP, exactly? Well, we’re glad you asked. In this article, we’ll cover:

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What is an ICP?

An ideal customer profile (ICP) is a fictitious company that possesses all the characteristics of those who would benefit the most from the solutions your products or services offer. Also referred to as an ideal buyer profile, your ICP outlines the type of company that would gain the most value from your company and what it has to offer.

A closer look at ICPs

Ideal customer profiles are defined using firmographics, or attributes used by businesses-to-business (B2B) organizations to segment their ideal customers, including:

  • Company size or number of employees
  • A company’s average revenue
  • Company industry
  • Company location
  • Company status or structure

Depending on your products or services, the firmographics you use to build out your ideal customer profile may vary. Much like demographics, every business will value different data points depending on its sales goals.

ICP vs. buyer persona vs. target market

When it comes to talking about ideal customer profiles, we’ve got to address the elephant in the room: aren’t ICPs the same as buyer personas and target markets?

The lines between ideal customer profiles, buyer personas, and target markets can blur, but we’re here to set the record straight. While all three of these terms sound like they address the same thing, they differ from each other in key ways.

Buyer persona

Buyer personas are general descriptions of the types of people at the companies who are involved in purchasing decisions. In a nutshell, buyer personas help provide context and structure to your ideal customer profile — they’re the puzzle pieces that help flesh out your ideal customer profile.

Like ideal customer profiles, buyer personas are somewhat fictitious descriptions of people. Unlike ideal customer profiles, buyer personas are defined by demographic data, like:

  • Age
  • Gender
  • Job title or role within the company
  • Seniority
  • Income

Target market

Your target market, or target audience, defines a group of consumers that would benefit from your products or services rather than a fictional company. Though similar to an ideal customer profile, target market is a term more frequently used in business-to-consumer (B2C) settings.

Benefits of an ICP

When you start to learn about what does ICP stand for in marketing, you will see that ideal customer profiles bring quite a few undeniable perks to the table. Today, we’re breaking down four benefits of an ideal customer profile you don’t want to miss out on:

  1. Understand who you’re selling to and develop personas
  2. Focused marketing efforts
  3. Better product and service development
  4. Improved lead conversions

1. Understand who you’re selling to and develop personas

You may be wondering how ICP marketing can help you. One of the biggest benefits of an ideal customer profile is getting to know who you’re selling to. Every business has a specific audience that will benefit from your products or services the most, and knowing who they are will make your job a lot easier.

When you develop an ideal customer profile, you can begin digging deeper into this fictional company to identify and create buyer personas. These personas can help bring your ideal customer profile to life and, in turn, help you get to know the organizations and individuals you’re marketing your brand to.

2. Focused marketing efforts

Once your ideal customer profile helps you gain a better understanding of your audience, you can develop targeted marketing campaigns that appeal to your ideal customers. Better yet, you can identify high-value leads to target with said campaigns.

Whether your marketing efforts are geared towards search engine advertising, social media, or more traditional methods, you can use customer insights from your ideal customer profiles to tailor your marketing campaigns toward them.

audience targeting options on instagram

For example, social media platforms like Facebook and Instagram offer advanced reporting and analytics pages for businesses advertising on the platform. Through these business pages, advertisers can add targeting features to their campaigns so their messaging gets seen by the right people.

Knowing the “right” people to target all starts with building an ideal customer profile.

3. Better product and service development

Another benefit of an ideal customer profile is better product and service development. By better understanding the people you’re selling to, you can gauge their needs and wants when you begin your ICP marketing. Anticipating potential problems that will need solving gives you the jump on developing products or services that will meet those future needs.

Come the time that your customers realize they have an issue that needs solving, your brand is in the prime position to provide a solution. In doing so, you emphasize your brand’s value and dependability. These are key characteristics people look for in companies and can attract loyal customers.

4. Improved lead conversions

All of the previous benefits combined — persona development, targeted campaigns, better product development — all contribute to arguably the best benefit of creating an ideal customer profile: improved lead conversion rates.

As a quick refresher, your conversion rate refers to the percentage of people who complete a desired action. In this case, it’s the percentage of leads and prospects you turn into paying customers.

Understanding who you’re selling to helps you to create targeted marketing campaigns and better understand customers’ needs and wants. With this information, you can continue to create and offer solutions that better appeal to your customers. At the same time, you can identify the most profitable leads and target them with your campaigns.

These actions lead to more successful campaigns and selling activities, resulting in improved lead conversion rates.

How to create an ICP that’s effective

We’ve covered the What and Why of ideal customer profiles, but now it’s time to break down the How. Read on for a step-by-step guide on how to create an ideal customer profile that’s effective in helping you understand and connect with your audience.

1. Collect data from your current customers

The first step in creating an ideal customer profile is to gather data from your current customers. This will be the information you use to draw data-driven conclusions about the behaviors of your customers.

Specifically, you want to pay extra attention to your “best” customers. These are the people who you successfully sell to on a consistent basis. Your top customers will be instrumental in helping you create an ideal customer profile in later steps.

Nutshell CRM

nutshell crm

A lot goes into customer data collection and organization. To make this step easier, we recommend you invest in customer relationship management (CRM) software. CRM is software that assists companies with collecting, organizing, and storing customer data and information about their customers’ interactions with your company.

Now, we may be slightly biased (sorry, not sorry), but Nutshell has got you covered when it comes to finding and implementing a CRM that makes customer data collection a breeze.

Nutshell’s all-in-one CRM helps you manage contacts and leads and automate sales tasks so you can continue to focus on building lasting relationships with your customers. Learn more about how the Nutshell CRM can help you create an ideal customer profile and make customer data management easier by contacting us today.

2. Analyze that data for any trends or similarities

google analytics audience overview

Once you’ve gathered your customer data, it’s time to analyze it.

Especially among your top customers, you want to investigate the data for any trends or similarities that indicate any overarching themes or behaviors. (Pssst… you can analyze your customer data for trends with Nutshell’s reporting tools!).

Look for notable attributes among customers like:

  • Industry
  • Geographic location
  • Revenue or income
  • Company size and structure

3. Examine your findings

Look at the trends you noted in the previous step — what stands out to you? Consider questions like:

  • Are these companies in the same industry or similar ones?
  • What region are these companies in?
  • What’s the average employee count?
  • Are there specific products or services that are purchased or utilized more?

Pay attention to the characteristics that are most common among your customer base and keep those in mind, as they’ll help build the framework of your ideal customer profile.

4. Create your ICP

Now that you’ve completed an in-depth analysis of your current customers and the firmographic characteristics they share, you can begin to compile these findings into one master document. This will become your ideal customer profile.

Outline all of your findings here and begin to create your ideal customer profile. This fictional company you create will be the culmination of all the data you extracted from your earlier analysis.

From here, you can take it a step further and start developing buyer personas within your ideal customer profile so you can really get to know your audience.

ICP best practices

The work doesn’t stop after you’ve created your ideal customer profile — take a look at a few best practices to employ to maintain your ideal customer profile.

Talk to your customers

Your customers are what give your ideal customer profile life, so don’t ignore them!

Whenever possible, talk to your customers to get to know them and gain even more valuable insight that could help you enrich your ideal customer profile. Your customers can give you valuable information that may not be able to be found through basic data analysis.

Not to mention, your ideal customer profile will help you bring in new customers, so staying in touch with your customer can help you stay in touch with your overall audience.

Revisit your ICP on a regular basis

Speaking of staying in touch, another important best practice regarding your ideal customer profile is regularly revisiting and revising it when necessary.

Your audiences’ interests, habits, and needs are constantly changing, and your ideal customer profile should change with them. It’s a good idea to regularly go back to your ideal customer profile so you can ensure it’s always up to date and accurately representing your audience.

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Build an ideal customer profile with the help of WebFX

We here at WebFX are no strangers to building an ideal customer profile. We’ve helped clients find and build engaged audiences that bring results to your business, and that all starts with identifying your ideal customer.

Ready to get to work? Learn more about how WebFX can help you identify your target audience and begin building an ideal customer profile by getting in touch with one of our dedicated digital marketers. Give us a call at 888-601-5359 or contact us online today to get started.

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