Every team must create, redefine, and align toward your ideal customer profile (ICP) with a focus on winning and growing accounts that fit these expectations.
Understanding which customers actually stay and grow with your business should be a top mandate for all revenue and go-to-market teams. It means more targeted marketing campaigns, more streamlined sales messaging, and better alignment between the product roadmap and customer needs, just to name a few.
In short: knowing your ICP helps streamline the whole organization.
ICP evolution: The foundation to sustainable customer-led growth
The main reason why businesses need to embrace customer-led growth is simple: maximizing customer lifetime value. That all begins with targeting the right businesses to work with, known as your ideal customer profile (ICP), defined by Gartner as follows:
The ideal customer profile (ICP) defines the firmographic, environmental and behavioral attributes of accounts that are expected to become a company's most valuable customers.
In other words, it’s the type of customer who needs what you offer today, has the money to spend on a solution, and wants to spend for that solution because it delivers enough value to justify the cost. This customer will be more motivated to use and adopt your product, ultimately leading to higher customer lifetime value.
Understanding the risk at stake
The relationship between you and your customers can make or break some life-altering experiences for both individual employees and the business as a whole, including:
- Hitting revenue quota
- Account retention (and org-wide Net and Gross Revenue Retention)
- Spending hours training a team because they didn’t have the right admin requirements
- Being threatened with legal action for making allegedly-false promises that you weren’t able to deliver on (this happens more than you’d think)
- Implementing over the weekend to meet misaligned expectations
- Layoffs and ultimately business closure from lack of revenue
Regardless of your business needs at the time, customer relationships can also impact your personal time. For numerous reasons across personal and professional needs, it should be your mission to get to know who are your best-fit customers and how to target them.
How to connect your ICP to customer-led growth
It’s important to remember that once you develop your ICP, it’s not a one-and-done solution. This is an ongoing process because your business will change, products will evolve, and market expectations will fluctuate along with the economy.
Rule #1: Leadership needs to lead the discussion
The executive team should frequently meet to discuss new insights and overall opinions on your ICP. If you have not collaborated on this yet as a team—here’s what to do:
- Create an ICP refresh cadence and commit to it
- Have every team leader come to the meeting with a hypothesis on your ICP, based on:
- Win rates, retention, win/loss analysis, referenceable accounts, etc.
- Customer examples
- Insights directly from their experience and research
- Collaborate across the data and examples presented to build a single, cohesive ICP definition.
- Once defined, describe key personas within your ICP and enable pre-sales teams to effectively target them.
This will help you come to a consensus on your ICP, ensure ongoing accuracy and most importantly, avoid your ICP being defined by a single team (or through gut feeling!).
Rule #2: Commit to serving your ICP
Ongoing Enablement. Enablement needs to own ICP training end-to-end. It should be included in new hire onboarding and frequently re-enabled throughout a quarterly or bi-annual cadence. Don’t forget to gather insights from ongoing executive ICP meetings to help you understand when to re-enable teams and when to build materials.
Operationalize real-time insights. Operations will be critical for helping facilitate more real-time sharing of insights across platforms and team workflows. For example, creating a centralized place to share win/loss interviews, renewal losses, implementation failures, or customer wins in real time. With Catalyst, this can all be facilitated through our Slack integration tied to all your critical customer data.
Executive commitment. Leaders need to commit to regular–quarterly or semi-annual–reporting and reviews on ICP performance. This is used to champion ICP evolution (learn more in the next section)
Rule #3: Everyone takes ICP ownership
In Customer Success: Support ICP development by sharing the voice of the customer throughout the organization — give people the insight and data they need to better understand the customers you work with. In CS messaging, position how the product addresses specific customer challenges, not just what the features do in general.
In Sales: Focus on selling to your ICP—not signing any customer to become a CS problem. Partner and exchange knowledge with CS on understanding your ICP to improve sales positioning and closing. In sales messaging, personalize the conversation so prospects know how the solution can help them now and in the future.
In Marketing: Focus on targeting your ICP by going deeper, not wider, on your campaigns to build pipeline. Exchange knowledge with CS on understanding your ICP to improve campaigns, events, creative content, blogs, case studies, etc. Drive stronger sales conversions and lifetime value by targeting the right buyers.
In Product: Prioritize building features that deliver value to your ICP as it evolves. Leverage CS data and insight to build features and product innovations that continue to deliver value based on what current clients need now and in the future. Contribute to market research that informs your company ICP.
Operations and Enablement: Orient operations around the customer, viewing how each team interacts with them to determine what processes need optimization (usually across pricing, technology, and procurement). In addition, ensure proper reporting of new business and renewal metrics in relation to the customer profile to measure that your ICP strategy is working.
Target customers who will stick around
This principle means your whole company is aligned toward one thing: bringing on (and servicing) customers who are most likely to continually renew and expand with your solution.
Overall, if you build a product and acquire customers who truly need your solution, many good things happen: lower acquisition costs, higher deal sizes, increased deal velocity, higher product usage, higher renewals, and higher expansion. This is all with the true cherry on top: these customers are easier to support and service because they are aligned to what you offer.