Victoria Yu is a Business Writer with expertise in Business Organization, Marketing, and Sales, holding a Bachelor’s Degree in Business Administration from the University of California, Irvine’s Paul Merage School of Business.
Sallie, holding a Ph.D. from Walden University, is an experienced writing coach and editor with a background in marketing. She has served roles in corporate communications and taught at institutions like the University of Florida.
Updated on July 12, 2023
What Is an ICP?
What Is an ICP?
How to Develop an ICP
Has the Insane Clown Posse come to visit us at Making That Sale?
Nope! Sorry to hip-hop fans, but to businesses, ICP stands for Ideal Customer Profile, which is exactly what it describes: a description of a company or product’s ideal customer.
But why exactly do companies need an ICP? Shouldn’t they try to sell to anyone and everyone who shows an interest in their product and has the means to buy it?
Not necessarily. A clearly-defined ICP can focus a business’s marketing and sales efforts toward its most promising potential customers, boosting a company’s sales numbers beyond what they’d sell without one. To start reaping these benefits, read on to learn more about ideal customer profiles and how you can make one for your own business.
An ideal customer profile (ICP) is a list of attributes that represent a business’s target customer.
A clear ICP helps a business focus its marketing and sales campaigns to attract and qualify the leads most likely to become high-value customers.
To build and utilize an ICP, a company should have a thorough understanding of its products and goals, identify its best customers, search for common attributes between those customers, consolidate the data, and distribute the ICP throughout the company.
What Is an ICP?
As we said earlier, “ICP” stands for “ideal customer profile” and is a detailed profile of a business’s perfect customer.
ICPs aim to align and optimize a business’s marketing, lead generation, and sales efforts by giving everyone a shared vision, and coordinating projects that appeal to one specific type of qualified customer.
The exact details of each company’s ICP depend on its industry, product, and goals as a business, but in general, ICPs detail firmographic, demographic, behavioral, and environmental attributes.
Both B2B and B2C businesses can create ICPs, but of course their profiles will look quite a bit different. A B2B ideal customer profile would focus on firmographic details such as the number of employees at the target company, their annual revenue, and growth trajectory, among other things. Meanwhile, a B2C ideal customer profile would focus more on details like the customer’s age, gender, income, and lifestyle.
Why Is It Important to Build an ICP?
If a company were to sell to every consumer that comes its way, it would be a waste of time – consumers won’t buy a product unless they have the need, budget, authority, and urgent timeframe of need for a product, known as the BANT criteria.
An ICP sets out quantifiable and tangible traits that correspond to those BANT criteria, giving the marketing team and sales reps discrete qualities to look for and appeal to when interacting with a potential customer.
For example, if your company sells baby food, your ICP would obviously be parents with a newborn and a need for baby food – trying to sell to anyone else is a waste of time. Or if you sell sales CRM software, your ICP might be B2B companies with at least 50 customers, which is the minimum number of users for your product.
With an ICP in mind, your marketing team can create targeted marketing materials, messages, and demand gen campaigns that appeal to the specific traits of your target ICP. Your sales team also knows to focus their sales conversations on uncovering if the lead meets your ICP (and your BANT criteria by extension).
This helps your business attract and nurture more qualified leads and identify the highest-value customers, resulting in a fuller sales funnel, higher conversion rates, faster sales cycles, and a higher win rate – in summary, more and better sales.
But the perks don’t stop with the sale: if your existing customer base all share the same attributes and needs, then it becomes much easier to cross-sell and upsell them post-purchase, increasing their customer lifetime value. That means more sales revenue for you, without the higher sales costs to match!
How to Develop an ICP
Ready to make your own ideal customer profile and start reaping the benefits? Here are five simple steps to building an ICP.
1. Understand Your Product and Goals
The first step is to start off with what you know: your product.
What sort of product are you selling? What pain points does it appeal to, and what sort of customer would find the most use out of it? From our previously-mentioned BANT criteria, the most important consideration a customer makes when purchasing is the question, “Do I need this?” Thus, you should have a clear understanding of the sorts of people in which sort of situations would have a need for your product.
Next is to understand your company’s goals. Are you in the red and need to make as many sales as fast as possible? Or can you afford to take it slow and want to build brand loyalty and value over time? Consult with your business plan, key stakeholders, and decision-makers to outline your company’s short- and long-term goals so your ICP fits with your strategy.
2. Identify Your Best Customers
Next is to trawl through your database of current customers and historical transactions to identify your best accounts. How you define “best” is subjective, but some common factors could be:
Highest purchasing value
Longest customer loyalty
Shortest time to close
Lowest number of support calls
Highest customer lifetime value
Be aware that whatever criterion you base “best” on will shape your ICP, marketing and sales strategies, and entire sales methodology – so choose wisely. Identify what type of customer would be best to attract and serve to achieve the goals you set in the previous step.
Consult your marketing, sales, and customer service departments for their opinions on what makes the best customers. If you have a CRM for your business, analyze historical customer records to find quantifiable records of your top-dollar accounts.
3. Identify Common Attributes
From your list of best customers, dig a little deeper into their accounts to search for trends between them.
For example, let’s say that we assemble a list of our best customers who had the highest purchasing amount per transaction. By looking closer at their profiles, we might also notice that they all have at least 1,000 employees, have annual revenue of over $75 million, and plans to go public within the next five to ten years.
You should ideally look at your existing customer data first to derive insights, but you could also conduct customer interviews or surveys to fill in the gaps in your knowledge. But be aware that this may cost valuable time and money, especially if you don’t know exactly what traits you’re looking for.
To help you out on that front, here’s a list of attributes you could focus on for both B2B and B2C companies. Though this isn’t an exhaustive list, it’s a good starting point.
Average Order Value
Preferred Communication Channels
Reasons for Purchasing
Average Order Value
Preferred Communication Channels
Reasons for Purchasing
For B2B sales, you may also want to consider the characteristics of the purchasing agent or decision-maker who will be signing off on the purchase. However, try not to get too hung up on individual personalities – between four to five individuals are often involved in the sales process, along with around three decision-makers, according to CRM vendor HubSpot. Attempting to appeal to only one type of character may alienate you from appealing to other people in the purchasing process.
4. Create Your ICP
Now that you’ve done all the hard work, all that’s left is to consolidate that data into one document to make your ICP. Per each attribute you researched above, discretely write out the average value or common factors shared between your highest-value accounts.
For certain categories like firm size or age, it might be more helpful to list a range rather than a concrete number to give your company a bit more flexibility when sourcing customers. For example, even if you’d prefer your customers to have a budget of $5,000, you could tell your sales reps that they could consider deals as low as $3,000 as long as the customer signs on for a longer contract.
If you’ve discovered that there are several types of customers who greatly contribute to your sales, don’t try to merge them all into one amalgamated ideal customer profile – it’s okay to create multiple separate ICPs! But if you’re just starting out with ICPs, try to focus on your most salient customers first rather than spreading your marketing and sales efforts too thin in several directions with several ICPs.
5. Implement Your ICP
Finally, share your ICP with your marketing and sales teams, and work with them to align your company’s lead generation and sales processes, appealing to the customer described in your ICP. With your ICP’s attributes and traits in mind, your marketing and sales teams can filter out more qualified leads from the masses and create more appealing messages.
For example, if your ICP tells you that your ideal customers prefer to receive communications through email, you would tell your marketing team to focus on email marketing campaigns instead of cold calling and your sales team to use email as their primary method of sales prospecting. Or, if you use search engine marketing, you could focus on keywords that are associated with your ICP.
Keep your ICP in an easily-accessible place such as your company’s CRM, sales playbook, or employee handbook, for everyone to reference it as needed.
ICPs, or ideal customer profiles, list out the traits that make up a company’s highest-value customers. With an ICP on hand to structure their efforts, marketers and salespeople can create more appealing promotional material and messages and qualify leads faster, leading to more happy customers.
Though crafting an ICP may sound difficult, this step-by-step guide has hopefully given you all the instructions you need to create your first ICP and put your business on the road to success.
What Is an ICP FAQs
What’s the difference between an ICP and a buyer persona?
An ideal customer profile (ICP) is a description of the perfect company or customer to buy your product or service. Buyer personas are semi-fictitious human personifications of a company’s ideal customer; it takes research data on the company’s best customers and adds details to make a living, breathing person.
While both cover the company’s ideal customer, a buyer persona is a bit more tangible: a buyer persona takes the ideal customer profile and attaches more demographic detail to it, making it a named character with their own life and story.
For example, a company could have an ICP of single men in their thirties with a high income of over $150,000 per year. The company could then go one step further to create the buyer persona Steve, who would be a recently-divorced 35-year-old banker on Wall Street.
Though both types of companies can create ideal customer profiles and buyer personas, B2B companies tend to rely on ICPs more and B2C companies tend to use buyer personas more.
What do I do once I develop my ICP?
Once you develop your ICP, distribute it to everyone in your company, and work with managers to translate those ideal attributes into actionable steps for your marketing and sales teams to follow, such as a target list of companies to promote to, lead qualification criteria, and sales plays that appeal to your ICP’s personality.
If you sell more to individual buyers than multi-member buying groups, it may also be useful to create a buyer persona from your ICP, humanizing your ICP and adding a touch of empathy to your selling efforts.
How often should I change my ICP?
Remember how we said your ICP should match your short- and long-term goals? Because those goals and the activities you take to achieve them are always changing, your ICP in turn should also change to reflect that. Review your ICP at least two or three times a year to make sure it properly reflects your company’s current products, goals, and customer base. For the same reason, you should also update it immediately after making any big changes to your company.