Reliance on unreliable data and instincts can lead to a lack of focus. On the other hand, using an Ideal Customer Profile means that you can understand your types of customers and the best leads for your business. Without a clear ICP, you will have lots of unused data. This includes data that you cannot harness to increase your profits, coordination, and visibility.
An ideal customer profile is a categorical description of customers that would largely benefit from your offering and give you value in exchange. Regardless of your company size or history, your ICP is a hypothesis of the type of client that you should focus on. These are the types of customers that can give you the most profits out of the products or services your business offers.
If you want to know more about identifying ideal customer profiles, no worries. This article summarizes four essential elements of creating an ideal customer profile for your business.
How An ICP Persona Improves Business
The ideal customer profile (ICP) is a key used by data-driven companies. These are companies that base their business decisions based on evidence-based information. As a strategic tool, an ICP can be used to ensure that your marketing and sales efforts are grounded on reliable information.
For instance, a well-formed ICP clearly defines your customer data model. This is a profile of your customer’s activities. It describes an ideal customer based on information about your website visitors. You can use your ICP to personalize messages and responses to customers, stock up on most preferred items or services. In other words, you can streamline your company processes, goods, and responses for maximum profitability based on verifiable statistical information.
If your company offers different goods or services for different customers, you can also use different ICPs. Whether you have one or several ICPs, you will effectively remove unnecessary practices, routines, and goods to focus only on what is best for your bottom line. At the same time, your ICPs can help you provide better value such as saving each customer’s time, minimizing effort, alleviating pain points, improving employee morale, and reducing expenses.
Since ideal customers are the type that provides you the best value for your business offerings, ICPs can directly help you achieve better sales. At the same time, your ideal customer profile may also consider factors such as referrals, testimonials, new clients, customer insights, constructive feedback, and advocates for your business.
Creating Ideal Customer Profile For Your Business
Knowing the for-profit benefits of using an ICP is not enough. You should also be able to check that you are creating an effective ICP for your business. Here is a summary of three (3) key points.
Find Reliable Data
The first step is to identify data that is more reliable than personal observation, hearsay, and hunches. For instance, you can start with your current customer base and determine their common characteristics. You can use a combination of qualitative and quantitative analysis to generate a general or detailed ICP according to your business needs.
For instance, when creating your ICP, you can consider basics such as employee headcount, company revenue, and job titles. This means that you can export opportunity data from your small business CRM system and append account information as necessary. Next, you can create more data points that are relevant to your industry and activities.
The next step is to identify clear patterns. It is important to note that patterns are different from one business to another. You might notice that patterns are concentrated in a certain industry, a region of the country, or involve a particular class or type of buyers.
Determine Your Best Customers
It is not enough to simply look at your customer universe; you should hone in on your best customer base. You can do this by creating a list of the best customers. Since best is subjective, your stakeholders throughout your entire organization should agree on the criteria.
The criteria may vary by businesses and you will have to determine what “best” really means to you. Some of the common points include high potential growth, the longest time with your business, or high retention rate. You must also consider customer accounts that are profitable. Once you’ve come up with your criteria, aggregate the data, and search for similarities or patterns.
Other patterns are so obvious while some can be difficult to see at first glance. You can get started with questions that involve the common geographic location, industries or occupations they’re in, most preferred products or services, most frequent time and frequency of purchase, and so on.
The granularity of your segmentation tools and data is the only limitation. The similarities of your customers will be the foundation of your ideal customer profile. It represents your best customers in the future because it is based on your existing customers.
However, you may find that identifying your best customers can also include other considerations.
Build Everlasting Customer Relationships
While many businesses are successful when it comes to creating an ideal profile, they fail to realize that building relationships is very important. Relationships help in improving and promoting customer loyalty, repeat purchases and branding. This is why major companies around the world are turning to hubspot crm integration to develop and strengthen this aspect of their company.
Customer Relationship Management has slowly evolved into being a separate and important vertical within an organization. From getting feedback to sending newsletters, companies are using ways and means to engage their existing customers and prevent their competitors from gaining access to them.
The other attributes that you can use when you create your effective ideal customer profile can include the following:
- Referrals – The best customers of your business might not have the highest customer lifetime value or CLV. These are your satisfied customers who add extra value in the form of referrals. According to statistics, 84 percent of decision-makers begin the purchasing process with referrals. In fact, the majority of marketing and sales professionals agree with this.
- CLV or Customer Lifetime Value – Determine the total CLV by calculating the company’s total net profit earned from customers over a certain period of time. From a planning and forecast perspective, CLV helps businesses determine how much to spend in terms of customer acquisition.
- Service or Product Usage – The frequency at which the customers use your service or product may go a long way. If applicable, you should drill down the features of each product or usage to determine how marketable particular functionalities are among your offerings.
Improving Your Ideal Customer Profile
If you are searching for more sources that can help you develop and build your ideal customer profile in a better way, here are some suggestions:
- Check Your Website Traffic
If you want to know more about the visitors to your website, Google Analytics can come in handy. By analyzing the behavior of your website visitors, you will learn more about what they are most interested in, and which blogs they spend the most time browsing and reading. These are additional factors that can help you profile your ideal customers more precisely.
- Review Customer Complaints
Check the customer feedback on your website and read their reviews to understand more about customer pain points. Customer complaints are quite constructive if you use these to understand their preferred products, services, processes, and brand values.
- Check Your Financial Data
If you have a small cohort of profitable customers, consider running a report to learn more about the sales process and demographics specific to this cohort. Look at the packages and products that are most preferred by people in this group.
Once you have created an effective ideal customer profile for your business, generating high-quality leads will be much easier for you. You can develop user personas to assist your team to further optimize your sales and marketing strategies. You can also compare your ideal customer profile to your customer base, your churned customers, and your current prospects to check for relevant patterns that emerge. The key points summarized in this article should help you get started on your way towards better business decisions.