“Sell me this pen!”
How would you answer Jordan Belfort, or the countless others before and after him, if they asked you this question?
The truth is, you can’t answer this question until you know who you’re selling the pen to. Different audiences have different wants and needs, and understanding these are the first step to building a successful Go-to-Market Strategy.
ICP stands for Ideal Customer Profile. In other words, this is the core market you’re selling to.
Why Does This Matter?
In many ways, you can think of the ICP as the tip of the arrowhead. The thing that directs all the activities of your company. Once you have a clear understanding of precisely who you are selling to, that helps inform who you are reaching out to through marketing messages and sales campaigns. And this in turn determines who you will end up talking to and therefore what market feedback you will get. And since market feedback drives your product roadmap, your ICP ends up determining the direction of your product.
The more specific and better targeted your ICP, the easier it is to align all activities of your company and the faster you will be able to accelerate towards and beyond product/market fit.
Some other benefits of a clear ICP:
- It makes it easier to prospect
- We’ll sell to customers who are a good fit for our solution, meaning that they will use the product, get value, renew and expand
- Our sales organisation can learn to sell to that type of customer, shortening sales cycles
Ultimately, early-stage startups are aiming to prove they have product/market fit, which is about proving that they have a fit with one particular ICP. If you have that, then you can raise your series-A, scale the company, build towards a great exit and those fabulous yachts in the Maldives. Conversely, if you are not clear about who you are selling to, you may end up talking to too many different segments that in turn give you too many conflicting priorities. It then becomes much harder to manage your product roadmap and get to product-market fit.
How Do We Define an ICP?
In B2B sales, an ICP is first broken down into Company and Person/Role, these are the steps we need to follow:
- Define your unique and defensible product differentiators.
- Identify pains that your differentiators solve.
- Map pain points to specific use-cases.
- Quantify the business benefits of eac use-case.
- Identify the negative consequences of not solving the pain points.
- Identify companies/industries which have those specific pain points/use-cases
- Define the job roles/titles that own those pain points/use-cases
- Prioritise companies and/or roles based on value achieved by solving these pain points.
Ultimately we want to define a “beachhead” use-case for us to target, as trying to sell multiple use-cases to multiple markets too early will end up spreading you too thin and dilute your messaging.
Unique, Defensible Product Differentiators
In a head-to-head with your competitors, what capabilities do you have that are unique, difficult for you competitors to build AND that create meaningful value for customers?
Quantifiable Business Value
Put simply: businesses only want to buy new software if it either makes them more money or saves them money, so how can you do one or both of those?
This can either be hard numbers: increased revenue or decreased costs; or soft numbers: increased productivity or decreased risk.
The first group is easier to quantify, the second more difficult but you still need to. E.g. does an increase in productivity mean you can do the same amount of work with 50% of the workforce or does a decrease in regulatory failures save X in fines per year?
This is typically broken down by industry, geography, size (revenue, headcount, etc.), plus other defining factors such as existing technology used, size of certain teams, etc.
By defining an Ideal Company Profile we can start to figure out both the size of the market we have to fish in and where to start fishing first.
Role profiles are broken down into 2 or 3 groups:
- Buyers – these are the main decision-makers, who ultimately we’re trying to get to sign on the dotted line (with the pen we’ve sold them!)
- Users – the people using the product, they may not make the final decision on whether to buy, but if they hate using the product there’s little chance the DM will buy
- Influencers – not the Instagrammer/Tik Tok kind; think Finance, IT, HR – not the intended users/managers but ancillary teams who may need to buy-in to the purchase
Each role we want to define by:
- Role title or keywords to look out for in title, e.g. Sales Director, …Additive Manufacturing…
- Seniority, e.g. CXO, Managerial, etc.
There are other defining factors we can use when creating a role ICP.. For example, previous role/company history may help infer whether they are stuck in a rigid corporate mindset or open to new cutting edge ideas.
Identifying whether a prospect is based in the global HQ can point to how much decision-making authority they have, both at a local and global level.
- Location: UK, Ire, Benelux, Nordics
- Sectors: Plastics, building materials, windows & doors, flooring, food & beverage (other discrete manufacturers)
- Sites: 3-15
- Machines: 50-300
- Employees: 200-1,000
- Annual Revenue: £25M-£125M
- Title (Primary): CEO, GM, MD, Chief Manufacturing Executive, Operations Director, Production Manager
- Title (Secondary): Manufacturing Engineer, Process Engineer, Manufacturing Manager, Operations Manager
- Seniority: VP, C-level, Founder, Owner, Partner, Head, Director, Manager
- Based in head office or regional HQ
Be Like Goldilocks
Two important things to consider are don’t think too big and don’t think too small.
This may sound contradictory but both pitfalls can happen when defining an ICP.
It’s great to have an aim of conquering the world market for what you’re building, but when you’re starting up or scaling you need to anchor yourself by what is the best customer for you now. You may plan to sell to CEO’s of Fortune 500’s one day, but probably not in your first year.
Equally, don’t be too limiting: a too narrow-minded approach may lead to you missing out on opportunities that are clearly in reach. Defining a range of companies and/or roles that you want to target allows you to test what works and what doesn’t.
But remember the aim of defining ICPs is to narrow down who you are selling to so don’t go overboard and create too many, otherwise the messaging will either become too generic or just a plain mess.
In Closing (remember, Always Be Closing…)
As with everything, don’t forget that ICPs can become out of date.
As you grow and both your product and the market matures your ICP may change with it, so it’s super important to review and refresh.
How else are you going to take over the world?