Go-to-market strategy series: Finding your Ideal Customer Profile (ICP)

Scaling to success

Go-to-market strategy: Uncover the power of your Ideal Customer Profile (ICP)

An ICP is a snapshot of the customer that drives the best outcomes for your business. Those outcomes are immediate, for example, short sales cycles, higher contract value, and lower customer acquisition costs. Also, post-sales, how long do they stay, do they spend more, where and how do they spend, and how much time and money does that take (customer lifetime value (CLTV)).

Revenue and go-to-market strategy is everyone's responsibility. Everything in here is designed to be led by a cross functional team. I like to call this a go-to-market (GTM) squad. There are a few layers to designing this team that I'll cover elsewhere. If you are not outsourcing, please don’t underestimate the impact on the chosen individual’s day-to-day roles. This work takes multiple people and requires admin, project management, thinking time, change management, and GTM work. 

What is in here are my opinions moulded through experience (making mistakes and some wins), wide and varied reading, and some great mentors, trainers, and leaders along the way.

Internal alignment

How you approach the ICP will depend on your data amount (volume and number of years/customers), its quality, accuracy, and ease of extraction. Data capability depends on your internal alignment. Internal alignment covers definitions, your teams using a single source of truth for data, a solid operational and revenue architecture, clear roles and responsibilities, and communication with limited silos. 

For scaling companies, internal alignment is stage one of revenue stability. As you align, you can workshop the best solution for you and which data points make the most sense for your business. 

Often, there's no luxury of waiting to finish the internal alignment to get started. You can start but you might head in the wrong direction. It is possible to do a light internal alignment, as detailed below.

Start small, test, and use that data to see weaknesses that'll help inform your internal alignment project. Ensure that both projects are communicating at a world-class level.

Small businesses and start-ups won't encounter as many internal alignment issues but will also have fewer of the data points suggested. 

Using technology to support you in delivering the ICP is possible. Many GTM tech pieces can help.    

I will take this in stages to help you decide where your business is on the alignment journey.

Where in the alignment journey are you?

No data, no definitions...

As a start-up or a small business, you may or may not have a Customer Relationship Management tool (CRM). Your data may not even be in Excel. Even with a CRM, your pipeline might be unclear. Getting your revenue operations (RevOps) at a foundation level will benefit you.

When you do not have data, you can collate your invoices to understand the customer categories, average contract value (ACV), and buying cycles. When looking at your customers, if you don't take information on how those customers find you, start asking on your website and LinkedIn forms. Consider interviewing the marketing and sales team, customers, partners, and who you feel sits in the ICP. Discover who your customer base is and why they are interested in you. 

Some data, but no one agrees on which data is correct, and we all use different reporting and have siloes.

Where to start?

It feels that this scenario is the most common with scaling through to enterprise businesses. 

Your ICP relies on gathering as many data points as possible, assigning a reliability score, and adjusting the results accordingly. 

Marketing, Sales and Product teams can give a qualitative understanding of where the quantitative data points get shaky or fail. Together, decide on a period to track the data and run a short sprint to gather that information. Hold a retrospective and understand what works and what does not (you might continue a focused sprint). 

Map out the as-is and the ideal state, workshop the process and enablement changes to support the data needed, prioritise the order of tasks, and start. 

As you start this task several GTM strategy tasks will arise, use the ICE framework to optimise the team's time. 

The change management can involve:

• Designing and testing enablement to improve data hygiene.

• Selecting data champions to help in the field. 

• CRM operational guardrails to nudge that behaviour.

• Design commission to include business health rewards.

• Train on the business impact of taking this information and how they will benefit. 

You have the data, and you trust the data.

It is rare, but there are always improvements.

Data points

The location of these data points will depend on your tech stack and how it is interconnected. If you have multiple tech tools, start with an architecture map of the data flow and data points to give you clarity. Get everyone to agree to where you will pick each data point from in the journey.

After this, you need alignment on the definitions below across all commercial teams. What is the point of entry and exit for this data, what weight or meaning does it have, who owns it, and how do you report and share it?

To start, look at your CRM or spreadsheet. Depending on your business maturity, you may be able to rely on business intelligence (BI) tools e.g. Tableau. If you have an analyst, you are winning. 

Consider your GTM tech stack e.g. some forecasting tools can support you to understand the customer trends. 

If you have sufficient data that is at least directionally correct, you can consider regression modelling to forecast future trends. 

Revenue growth

• Revenue (incl. silos if segmented by market criteria) & YoY growth.

• # of customers

• Chosen market criteria e.g. Partnerships, small, medium, large and Ent. Also, 1:1, 1:few and 1:many. 

• Sales cycle length & conversion rates through the funnel 

• Churn rate, upsell, cross-sell, and retraction.

• Discount rates. 

• ACV and margin

• Customer Lifetime value (CLTV) and LTV : CAC ratio (Customer Acquisition Cost)

• Products bought / bundles (NB the financial model might limit over indexing)

Select the market segment that most closely aligns with your ideal state. Advisable in the first instance (while testing out) is a segment that won’t require breaking the financial model if you find significant success.

High priority targets

You hopefully now have your data. Next, define your parameters.

For example, you will have market criteria (data point above), what are the definitions (what the teams use and what you’d like them to be):

1. Small, medium, large, and enterprise.

2. Account Based Experience (ABX) or Customer Experience (CX) approach is 1:1, 1:few, and 1:many.

3. Partnerships: How do you define each tier or package you provide?

Consider how your ICP might adapt to each definition. They might not look similar. 

Where do you want to target the most? 

Does the data support your intuition?

For each, take the top 5:

• Most profitable customers

• Fastest deals.

• Strongest LTV

• Successful use cases / easy to collaborate with customers 

• Examples are social proofs, customer panel involvement, ambassadors, engaging with Beta testing, and valuable feedback.

• NPS or CSAT scores

• Customer service sentiment analysis

• Lost deals. The caution here is multiple factors go into lost deals. Your data may not support a sound understanding of the loss. 

Our goal is to replicate the best customers and define disqualification criteria to cut accounts that will never buy. This will give your commercial teams access to the fastest success. No one team owns ICP, this is a cross organisation task.

Separate from this exercise, consider tiering all your accounts into the most profitable (top 5%), medium (>20 but <95%), and least (0-20%). You can then check if the team are following your designated ICP, where they are spending their time, and potentially colour code (or another visual marker) for any leads/apps that are amber or red. 

What do all these accounts have in common?

Help identify your target audience through a clearer understanding of their commonalities.

• Verticals, segments

• Company size

• Geolocation

• Tech stack (might not be relevant)

• Job titles

• Departments

• Attribution and touch points sequence

• Use cases.

• Changes/shifts 

  • e.g. new hire/funding secured x months ago / significant redundancies.

• Buying committee

  • Champion, economic buyer, influencers, blockers, end users)

• Referrals/returners

• Ambassadors

Disqualification criteria examples:

• Changes/shifts that are more likely to result in loss e.g. new CFO / bootstrapped.

• Seasonality (finance/budget and spending).

• The stronger competitor is their current contract. So your win/loss analysis shows you aren’t likely to win. These deals are vampires on your team’s and other teams' time. Even if you win, they damage your CAC. A strong customer awareness, even a high-level SWOT analysis, can improve sales. 

While you're running this exercise, you are gathering a clearer understanding of your customer’s behaviours. 

With your customer base, you can look at the buying committee (pre- and post-sale) and engaged customers (post-sale):

• What is their customer journey (attribution, research and evaluation process)

• Buying triggers

• Key Performance Indicators (KPIs)

• Personal and professional goals and challenges

• Day in the life of

• Where do you fit into that day?

• The value obtained and the moments that happened in

• Where do they hang out (professional and personal across marketing channels)? 

For your churned and retracted accounts, you can review your warning triggers. This will help the CX team map what to look for with account changes. You'll also be able to operationalise warnings and reports. 

Summary

There is a lot of work here. It's a continuous task because the market and economy shift and both can affect your ICP. 

The level of your deep dive will depend on your data, team size and ability, capacity, and budget. 

Start-ups will not want or have most of these data points. Do you have product-market fit (PMF)? If so, you may not have a go-to-market (GTM) fit. Lifetime value is unreliable in the early stages because you may have revenue debt (customers that brought on to make revenue but not a great fit), you’re trying new criteria e.g. the move to enterprise can take at least a year, you pivot, there are a few factors. 

You can see how this will inform your marketing, growth, content strategy, and sales plays. 

It’s advisable to re-calculate your total addressable market (TAM), serviceable addressable market (SAM), and serviceable obtainable market (SOM) based on your refined ICP. 

How much easier it'll be to inform your personas with a clearer view of this customer perspective? 

Outsourcing teams to support the data analysis, interviewing, and eventual positioning redesign (content strategy, customer persona) will lessen the strain on your team. Many of these data points will require a meeting with customers. Qualitative interviewing is a skill set. It’s unlikely that your sales team is trained to the sufficient level to do this. Customers often are more open with people they have no financial connection to. 

As mentioned earlier, enablement work needs to be supported by operationalizing guardrails, reports, and behavioural nudges to maximise your revenue. 

Thank you for reading!

If you want to talk in more detail, then please don't hesitate to reach out. I love a debate and to hear other's perspectives, especially about go-to-market strategy. Also, networking in the industry is key. 

Claire Cooper

Lead consultant at CGTM Consulting

Please feel free to connect with me: Claire Cooper | LinkedIn

#go-to-market strategy

#marketing strategy

#improve sales

Acronyms summary:

Ideal Customer Profile ICP

Customer Relationship Management CRM

Revenue Operations RevOps

Average Contract Value ACV

Go-to-market GTM

Customer Lifetime Value CLTV

Customer Acquisition Cost CAC

Business Intelligence BI

Account Based Experience ABX

Customer Experience CX

Key Performance Indicator KPI

Product Market Fit PMF

Go To Market Fit GTM

Total Addressable Market TAM

Serviceable Addressable Market SAM

Serviceable Obtainable Market SOM