How to Modernize Your Ideal Customer Profile (ICP) with Product Adoption, Usage, and Spend Data
What is an Ideal Customer Profile?
An ideal customer profile (ICP) defines the best possible customer for your company. It’s designed to create a laser-sharp focus for sales and marketing efforts to only concentrate on companies that stand to gain the most from your product, solution, or service.
This helps avoid wasting time on poor-fit prospects who won’t convert and/or those who, even if they did buy, would likely churn out soon after implementation due to misalignment between their goals and your solutions.
For sales and marketing teams, an ICP is a detailed profile of those who buy the fastest, spend the most, are easiest to manage during their term, and most likely to renew.
At its best, an ICP gets as detailed as possible and includes the following data points:
- Industry (or vertical)
- Revenue and budget
- Employee headcount and customer base
- Organizational (or technological) maturity
- Technology stack
- New investments and expansions
To get the most value from your ICP in your sales and marketing activities, it’s essential to be hyper-focused on making sure these data points are accurate.
Intricately makes it easy to modernize your ideal customer profile by not only consolidating the data points above in a centralized view but by also supplementing them with insights into how prospects will likely use your solution, how mature prospects are in their cloud journey, and what exactly their current cloud footprint looks like.
This granular view makes it simple to quickly identify the right prospects, increase the efficiency of sales and marketing actions, and accelerate the velocity towards closed-won customers.
Why is ICP Important?
The ICP is critical to any business’s success because it informs how you will spend your marketing budget, how many sales reps to hire, and, perhaps most importantly, how much revenue is available in your total addressable market (TAM).
Without a concrete ICP, you will not have a TAM. Without TAM, you have no Northstar for growth.
An in-depth, granular, and actionable ICP definition will:
- Enable marketers to spend efficiently on programs with the highest ROI, allowing highly targeted campaigns, landing pages, and messaging.
- Give clarity to sales reps, help identify where reps are needed, how many are needed, and focus their activities on capitalizing on your TAM.
- Enable sales and marketing alignment with data-driven definition agreeable to both teams that focus on pipeline revenue.
- Provides a focus for the organization. With a clearly defined ICP, everyone in your GTM team will be on the same page.
Important note: Your ICP is dynamic. Your ideal customer can and will change as you release new products, the market evolves, competitors pivot, and as companies leave or enter your qualification standards. This is why having real-time access to updated data from sources like Intricately is so important.
How to Define Your ICP
The process of defining your ICP involves creating ongoing dialogue conversations with prospects and internal stakeholders, data analysis, and feedback from multiple departments. Another important element is accessing high-quality data on product adoption, spend, and usage.
Step 1: Identify how and why companies use your product
Too many companies rely on firmographic data at this stage. It’s a good place to start, but identifying companies by size and location isn’t enough.
The key is to talk about how current customers use your product: Why do they use it?
For example, plenty of GTM teams would say their ICP includes media companies. But media is an industry, not a use case. A more accurate description (and starting point for an ICP) would be to say: “Companies use our product to stream live content.”
While quantitative data drives much of defining your ICP, this stage involves gathering important qualitative insights. Open up the discussion and document the findings with your sales and marketing teams.
Consider the following questions:
- Who is your largest customer, and why do they use your service?
- What solutions do you provide? What solutions do you highlight prominently in marketing campaigns and your website?
- Why do customers choose your product over the competitors?
- Why does one company spend more on your service versus the other?
- Is there a use case that has superior margins for your company?
Take a look at these examples for a video and security use case:
- [Wrong] We sell CDN, so broadcast media companies are our target.
- [Right] We sell CDN, so companies that need to stream live content for hours each day are our target.
- [Wrong] We sell security services, so any company in the cloud is a target.
- [Right] We sell security, so any company with distributed infrastructure in multiple countries because they’re at higher risk than the other.
Specificity is key. The goal is to form a hypothesis.
Step 2: Identify your data sources
Here we’ll evaluate the technical and firmographic data that make up the companies with a use case for your product.
But don’t limit yourself to looking at customer data – this relies too heavily on past activity. You must focus on the present and the future of your company. With new features, your can and will ICP evolves.
Even the biggest companies have ‘customer debt’: customers who don’t provide much value in the way of renewals and no longer fit the ICP. Just because they’re still a customer doesn’t mean they’re ideal.
By focusing on the makeup of companies with the use cases you identified in Step 1, you’ll advance how you think about your ICP.
For this stage, you’ll need data providers that are most relatable to your market. For cloud infrastructure and IT, that’s Intricately.
Step 3: Preliminary ICP and data pull
This is where your ICP becomes more actionable by supporting the identification of your TAM.
By compiling company spending, growth, and product usage, you can get an up-to-date picture of not only the total market but also the most promising opportunities in your prospect list.
At a base level, pulling initial data will help verify you have a large enough TAM for sustainable revenue growth.
Step 4: Evaluate customer data
Evaluating the holistic, big picture of customer data hones the ICP instead of serving as the foundation for your ideal future customer.
Better yet, it aligns what you’re doing now with what you’d like to do in the future based on your new ICP.
Too often, customer data misinforms the definition because customers aren’t always the best representation of where you want to go as a business. After your ICP is finalized, customer data also works well for segmentation because we’ve already determined who’s best.
Step 5: Finalize your ICP
Armed with analysis of current use cases, data surrounding your vertical and TAM, and customer data, you have everything needed to finalize your ICP.
It can be a simple (but detailed) paragraph. For example:
“Our ideal customer is a company with more than 500 employees that spends more than $100k per month on cloud services. They are located in North America and show signs of expanding to new locations or offices.”
Here’s the final curveball: you can have multiple ICPs. But the good news is, with updated spending data and segmentation, you can create multiple ICPs and prioritize them according to the best fit.
How Intricately Helps You Define Your ICP
With a data platform designed for competitive market intelligence, you can identify all of the insights that will make the biggest impact on your sales motion:
- Products: See a comprehensive view of the technologies a company uses.
- Spend: Estimate company spend by product, use case, and category.
- Geography: Correlate digital presence to physical locations.
- Maturity: Dig deep into how delivery, spend, and products change over time, by customer, provider, or product.
- Insights: Identify key events, contract renewal dates, spend thresholds, and changes in the configuration of the account.
With Intricately data, you can quickly and accurately answer all of the questions that are critical to a well-defined ICP:
- What accounts should I focus on?
- Who is actively evaluating and looking to buy?
- What products do they engage with?
- Who is the most likely to buy my solution?
- Who is spending with my competitors?
- Which current customers are most at risk?
Starting with a well-defined ICP is one of the best ways to align sales and marketing and drive better opportunities to your pipeline.
Define your ICP with Intricately and power strategic sales and marketing decisions with data from forecasting and planning to execution.