Whether you’re into sales or marketing, one of your most frequent day-to-day questions is: how do I make sure I’m focusing on the right prospects?
You can craft beautiful ads, powerful slogans, or perfect ice-breakers for your outreach templates. But if the audience is wrong, you’ll get little to no result.
One of the ways to determine the audience segments with the highest buying potential is by understanding the Ideal Customer Profile (ICP). Unfortunately, most companies struggle with defining it in a way that results in more opportunities and new deals.
Here’s how to avoid the common mistakes and build a killer ICP that helps drive up to 6x more revenue in a given time frame.
Ideal Customer Profile vs. Buyer Persona
Let’s start with the definitions. How is ICP different from the buyer persona?
As per Gartner, “ICP defines the firmographic, environmental and behavioral attributes of accounts that are expected to become a company’s most valuable customers.” In practice, ICP helps answer the question: “Which companies do we need to sell to?”
The buyer persona is a fictional representation of an exact person who will buy from you. It helps create a better user experience by using a proper tone of voice and choosing the right communication channels.
The attributes of ICP and buyer persona include but are not limited to:
To put it shortly, ICP is about the entire company that is going to become your customer. Within the company, you’ll focus on people who fit your buyer persona by creating content to attract them through inbound channels or by reaching out to them proactively via social media or email.
Building ICP: the most common mistake
Most probably, you have already tried to define the ICP criteria for your marketing campaigns or to streamline your sales outreach. You may have even arranged some brainstorming sessions with your customer-facing departments and C-level, documented all the insights and shared a beautiful deck with your sales and marketing team to get everyone on the same page.
And, most probably, no one has ever got back to this deck since then.
What are the reasons?
1. The ICP is set in stone and doesn’t reflect the current situation. A year ago, when you were defining the ICP criteria, everyone was excited because the sales had just signed two huge contracts with medical companies and everyone was saying that healthcare is the most profitable niche. But since then, you had no new clients from this vertical.
2. The ICP is based on gut feeling. The CMO says: “I think we need to sell this new product to SaaS unicorns”, and this segment is automatically added to the ICP. But this insight is just a hypothesis, not based on any historical opportunity data.
3. You don’t understand how to apply your findings to your actual tasks. There’s a list of companies that fit the ICP, sales give it to marketing to use in their advertising campaigns and build lookalike audiences based on it – that’s basically everything the ICP can be used for. Was it worth it?
Data-driven ICP: what it is and how to build it
In order to really identify the accounts with the highest buying potential, the ICP should be:
- Based on real opportunity data
- Updated on a regular basis
- Adopted by both marketing and sales
In other words, ICP should help you understand from the very beginning (when marketing starts planning their top-of-funnel campaigns) if a new account is worth focusing on in terms of vertical, company size, funding, and so on.
At N.Rich, we define it through Sales Velocity (read this guide to find out what it is and how it helps drive more revenue faster).
By reverse-engineering the existing opportunities in terms of Sales Velocity which takes into account 4 key criteria (number of opportunities, win rate, average deal size, and sales cycle length), we build a model that helps score every new account and evaluate its buying potential.
The best part: this is reflected in your CRM, you don’t need to log in to any other tool to see it.
The scoring process is automated. Here’s why it’s beneficial for the organization:
1. ICP always reflects the current state. If your company is switching to another vertical or starts selling more to SMBs instead of enterprise, it will be reflected in the ICP very soon.
2. The longer you use it, the more effective it is. As the algorithm gets new opportunity data, it improves the quality of scoring and helps better identify the buying potential of every target account.
3. Sales and marketing are motivated to keep the CRM up to date. Adding client data on a daily basis for the sake of adding data doesn’t sound exciting. But teaching the algorithm to filter out unprofitable prospects from the very beginning is much more motivating.
4. ICP is the critical factor in account prioritization. Whether it is for advertising, email blasts, or sales outreach campaigns, ICP scoring can be used to build the target account lists quickly. You can download all the accounts with “the ICP Sales Velocity greater than X” from your CRM and launch a campaign in a few clicks.
Data-driven ICP case study: what to expect
The common problem with scoring and predictive models is that they usually look more exciting in theory than in practice. To make sure the data-driven ICP works, we’ve tested the model with a major customer of N.Rich and got the following results:
Accounts that fit the data-driven ICP have brought 6x sales velocity (which means 6x more revenue in a given time frame).
After the set of accounts was defined, the N.Rich algorithm analyzed them in terms of firmographic, environmental, and technographic parameters and built the profile of an organization that is expected to become a high-value customer. This profile is now used by sales and marketing teams in their day-to-day activities.
Willing to see how data-driven ICP works for your target accounts? Reach out to the N.Rich team for a demo!