Ask a room full of business owners how many of them are getting satisfactory results from their marketing efforts. You can probably guess that very few hands will be in the air.
Why is that?
Even with digital marketing, which gives us the potential to reach new customers at enormous scale, we fail to produce our desired results when it comes to marketing and demand generation. One major factor for that is the quality of leads we get from traditional marketing strategies. We put our content out there and hope with our fingers crossed that the right leads come back to us. The wide net approach has led to disappointing results and is the reason why Account Based Marketing (ABM) has taken off.
We’ve previously discussed how ABM looks to increase marketing ROI and how, according to ITSMA, a whopping 84 percent of companies generated a higher ROI with an ABM strategy. The first step to getting your ABM strategy in place is to create your Ideal Customer Profile. An Ideal Customer Profile, according to BusinessDictionary.com, is “the description of a customer or set of customers that includes demographic, geographic, and psychographic characteristics, as well as buying patterns, creditworthiness, and purchase history.”
How to create your Ideal Customer Profile (ICP)
Creating your ICP will not only help you with your ABM strategy, it will help you narrow your focus across all of your marketing efforts. Lincoln Murphy, a SaaS consultant with 16 Ventures, reminds us that “people don’t buy from you because they understand what you do, they buy from you because you understand what they do.” Focusing on the features of the products you sell will probably lead to someone leaving your site very quickly.
Customers want to feel that you are uniquely suited to help them achieve their business goals, and using an ICP will help to ensure your messages resonate more effectively. Tailoring your unique value proposition, targeted marketing strategy and ongoing support around a customer profile that you are ideally suited to serve will ensure that you not only attract customers that you are better equipped to support, but that you also retain and grow those customers into larger accounts.
To get you started, here are four steps to help you create your ICP:
Your organization’s self-evaluation should be grounded in realism. Your ideal customer should be perfect for who your company is now, not who you’d like it do be. You might be amazing at helping small retail shops improve their point-of-sale technology and manage their ongoing IT needs. In that case you probably shouldn’t list Wal-Mart as your ideal customer. Your success stories from the past won’t resonate well and you’ll be setting yourself up for pain or even failure if you do manage to land a customer outside of your ideal profile spectrum. With that in mind, your ideal customer should also have the capacity to grow along with your company’s progress. Maybe your ideal customers now are smaller businesses that have high growth potential to mature as your service offerings and support capabilities also grow.
These are a few specific things you identify about your company as you define your ideal customer:
Baseline. We all want to be bold and visionary and so it’s easy for us to talk about where we see ourselves going in the future. However, an honest and clear depiction of where your company stands now will help you find customers who can help you reach your goals. Make sure you know what metrics you will be using to measure progress along the way. You may want to target IT decision makers, but how are you measuring that those are the folks receiving your message? Make sure that prospects from the right verticals or industries are coming to your site and that the content you present to them (and the tone of your messaging) is appropriate to drive the desired behavior.
Current Capabilities. Again, this is all about realism. It’s important to be realistic about what can actually be done to meet potential customers’ needs. Here is where you consider the maturity of your product, the experience and size of your team, your technology, and every other aspect which dictates what your company CAN do. If you go after very large accounts, are you set up to market to and reach the large number of stakeholders involved in the buying process? Are you ready to work with large procurement departments and potentially have to customize your offerings to meet those customers’ demands? Or are small and midmarket customers in a certain geography a better fit for your company? Consider these points carefully to help ensure your marketing pulls in customers as close as possible to the profile you outlined.
Adaptability. With your company’s current resources and experience, are you be able to meet a customer’s needs as they develop and grow? At what stage in your company’s life cycle will your relationship most benefit them? At what point will your product or service no longer be capable of supporting them? For example, one company I was working with took on a large nationwide client, only to find that having to be on-site in multiple locations across the country stretched their staff too thin and was costing them more than expected, stunting growth within other accounts. After opening a second office in Boston before establishing the core capabilities that made their first office successful, they soon realized this customer was outside of their ideal customer spectrum and mutually cut ties, but not before experiencing a costly lesson in the importance of having a clearly defined ICP.
2. Get to know your existing customers
It’s possible that you’ve already found some ideal clients that you can learn from. Take an inventory of their demographics (industry, geography, company revenue, etc.) and decision maker psychographics (personality, how they make decisions, preferences). Take note of how you acquired those customers and ask them why they chose you. Use that information to market to more customers like them. Incentivize those existing happy customers to write a review of why they enjoy working with you on your website and other sites that potential customers frequent. Finally, document the challenges you solve for your current customers and use those stories across your channel strategies.
3. Use predictive analytics
Does just reading the phrase predictive analytics scare you? Don’t let it!
Mick Hollison, CMO at InsideSales.com asks you to “imagine the ability to accurately predict not only who your best leads and prospects will be, but when and how will be the most effective ways to reach them and then to engage. This ability alone will empower marketers and salespeople in the coming seasons to be radically more productive and profitable than they are today. Used properly, it can transform the science of sales forecasting from a dart-throwing exercise to a precision instrument.”
With predictive analytics tools now more pervasive and affordable, they can be of great support to your ICP selection process. Our goal is to learn more about our current key accounts, better understand why they bought from us, and find more customers who have similar attributes.
Most predictive analytics solutions in the market have features that help you with look-alike modeling to identify target accounts. These then help you target the few accounts that will potentially drive the largest part of your revenue. Microsoft’s internal SMB marketing team uses these tools to extract data related to current top customers from CRM and marketing automation solutions. This information can then be combined with external data sources about customers to construct an “Existing ICP” data model. You can use this model with a host of providers to then run your “Existing ICP” data model against prospects already in your CRM database, social media analytics sources and all other 3rd party resources you can get your hands on. This then gives you great insights and ability to identify the accounts that resemble your existing ICP.
4. Dig deeper
Once you have defined a few different situations, and have a good understanding about where you and your current customers stand, you can begin conceptualizing your ICP. Here are some additional questions, traits and scenarios that will help you identify the ICP when you are engaging with potential leads:
- What is the customer challenge or pain point that needs solving?
- Are they aware of that challenge; are they actively searching for solutions?
- Do they have a sense of urgency about solving the challenge?
- Does your solution and its current capabilities solve the pain points?
- Does your solution or service integrate with their existing investments?
- Do you understand their procurement process; does it match with how you sell?
- Can you offer the support that they are expecting both while onboarding and on an ongoing basis?
- Do you have access to the decision makers in the customer organization?
Doing this exercise will give your team a good idea about where you are and where you want to go, as well as where your ideal customers are and where they are willing to go. Knowing the ins and outs of who you are targeting, where you can find them and they can best benefit from your offering will make fleshing out marketing campaigns and knowing who to ask for referrals from much easier.
Just as you expect your business to change and grow, your ideal customer profile must remain equally agile. After you think you’ve identified your ICP, be sure to occasionally pull metrics to reassess your course of action if needed. By treating your ICP as a living, breathing prototype, your business (a living, breathing entity itself) will remain healthy and profitable.