For businesses of any size, building an outbound sales strategy can be tough to accomplish. And the one of the toughest questions is who you should be trying to sell to in the first place. Get that wrong, and everything else looks harder.
You need to draw up an ideal customer profile.
What Is An Ideal Customer Profile?
An ideal customer profile is a picture of the type of company which is most likely to want to buy your products and services, and most likely to remain loyal and recommend you to others. It is likely to include the size of the company, the business they’re in, the activities they carry out, and why they’re likely to want your product or service.
An ideal customer profile might include information about the individuals within the company you need to target, although that could be a separate issue (see the section on buyer personas, below.) It’s usually based on data from previous companies which have bought from you.
It’s not just a tool for your sales team, however. An ideal customer profile might also be used by product teams as a way of testing whether they’re including the right features and developing the right add-ons. It’s important that all groups working together on a particular product or service have a common idea of who the ideal customer is.
Why Create An Ideal Customer Profile?
An ideal customer profile is a great tool to help you identify the strength of a prospect. If a new prospect is an exact match for your ideal customer profile, then it’s likely you should invest a lot of effort in selling to them. Companies which have a slightly weaker fit with this picture may still be worth selling to, but the sales cycle may be longer, the chances of success are lower, and you should target them later and with less effort.
If you don’t have an ideal customer profile, you can end up focusing too much effort on too many different parts of the market. Your reps can waste time chasing down leads who were never ever going to want to buy. That’s money down the drain.
The more you know exactly who’s going to buy from you, the better.
What’s the Difference Between an Ideal Customer Profile and a Buyer Persona?
An ideal customer profile is a picture of the type of company you want to sell to. It might have some information about the number of people who work there and maybe the kinds of job titles you want to see, but it’s all about the metrics. The buyer persona is about the psychology and needs of the individual you’re targeting. What’s their job title? What’s the typical demographic? What do they like? What are the pain points and challenges in their daily work?
Both are really important tools. It’s well worth having both. Generally speaking, if you’re working in a relatively fresh field, it’s better to start with an ideal customer profile and then move on to buyer personas afterwards.
In any case, we’re just going to look at ideal customer profiles in this article.
How Do You Identify an Ideal Customer Profile?
There are some strategies to identify your ideal customer. In the top down strategy, you ask executives to refer you down to the position you should talk to. In the bottom up strategy, you aim lower in the organization and get people excited enough to report up the chain. Or you can go directly to the “most probable” decision maker.
First, you’ll want to figure out the basics before choosing your strategy:
- What type of companies are your ideal customers?
- Which companies fit that mold?
- What are they buying, where are they buying it, what are they spending? What other products might they be using?
- Who at that company is making that decision, using the product/service, or cutting the check? How big is their company and what does their corporate structure look like?
Once you get a feel for these, you can use one of the following methods to find and identify your ideal customer.
Method 1: Top down sales strategy
First you go find the information for the VP of Marketing or CMO, then you email asking them to refer down to the position you should be talking to.
You can also get the VPM/CMO excited about what you’re selling but odds are you won’t have their attention long enough to get your point across.
Therefore it works well to aim high and get referred downwards. Their boss is literally telling them to talk to you, so this tactic can work well at times.
Method 2: Bottom up sales strategy
I used this at Udemy when trying to get a BD deal done with Pearson Education. You aim lower in the organization, for us it was at their authors, to get people excited so they can report their excitement up the chain.
If you get enough buy-in from the bottom level you can usually get the higher ups to give your produce/service a real solid look.
This works well for selling into salespeople. Make their lives easier or more productive and they’ll sometimes tell their bosses, “it’s so good that if the company doesn’t pay for it, we’ll come out of pocket.”
Method 3: Direct to the most probable decision maker
For sponsorship deals with large companies, I’ve figured out that I need to go directly to the Field Marketing Manager. Knowing this saves me a ton of time because I don’t need to be intro’d in to anything or work my way up the chain.
I know who the decision maker is and I can access them directly. I can choose to employ the other strategies as well, but I don’t need to play any games here.
You can also connect with multiple people in an organization at the same time, and engage the “deal triangle” by hitting all three. This can backfire but it depends on your messaging and your product. Try this at your own risk.
Granted, this is a lot harder to figure out if you’re just starting out but gets easier as you go on. For people that don’t have customers yet, go out and look at your target company’s corporate structures. Who you reach out to mostly depends on the size of their company.
It might look something like this.
0-10 employees – CEO. He’ll be the decision-maker in most cases unless they have co-founders in the vertical you are selling into (CTO for Product, CMO for Marketing) or have already hired experienced VPs.
10-50 employees – VP of the product value. (Marketing, Sales Productivity, Engineering)
50-500 employees – specialized role in product value. (Field Marketing, Content Marketing, Inbound Marketing)
More than 500 employees – regional specialized role in product value. (East Coast X, North America X, New York City)
Over time you’ll start to get a feel for where you should be targeting within that structure by reverse engineering your past deals.
Recommended Read: 6 Proven Tips For Getting Past The Gatekeeper
How Do You Write an Ideal Customer Profile? 3 Key Steps
This is a big question — but the answer has 3 key steps:
- Identify your best customers
- Research your best customers
- Build a profile
Let’s go over them in turn.
Step 1. Identify the traits of your ideal customer
An ideal customer is likely to have seven traits. They are likely to be:
- Ready to buy your product – they have already identified a need
- Keen to buy your product – there are clear elements of value you can deliver for them.
- Able to buy your product – they have the financial resources to make the purchase.
- Skilled – they are likely to have the in-house knowledge to make successful use of your product to its full potential (in other words, they’re good fit customers)
- Profitable – they’re doing well in their line of work so they don’t have to cut corners
- Growing – they’re planning to expand so they have potential for upsells and renewals
- Networked – they’re able to act as an ambassador for your product and talk it up to other potential buyers.
But what does that look like in your line of work?
If you’re a new company:
The best thing to do is try to guess, based on whatever data you can gather about the market.
If you’re a mature business:
You’ll be able to look through the list of companies which have previously bought your product, and pick some winners: companies you’ve found it easy to sell to, and who have extracted a lot of value from your product.
Metrics that help you identify your ideal customer:
The question of what makes an “ideal customer” is open to debate. Looking purely at the numbers there are lots of ways you can approach it.
Here are some metrics that might help you zero in on your ICP.
- Shortest sales cycle
- Lowest customer acquisition cost
- Highest customer satisfaction
- Largest number of renewals
- Most up-sells and expansions
- Most referrals
This isn’t an exhaustive list, by any means.
Perhaps a key metric for you is the cost of servicing a contract once you’ve won it, for example.
Each business will have different numbers that have greater and lesser importance. But so long as you know the ones that matter to you, you should be able to find the customers who match up.
And what about your biggest customers? Aren’t they going to be the best ones?
Well, maybe, maybe not. Here’s why:
An ideal customer profile is only useful if you can use it to find other, similar customers.
It’s trickier if your company’s biggest customer is actually atypical.
As well as reviewing all the data, it’s also worth sitting down with your sales managers and working through the list of customers and just asking them questions about who the ideal customers are.
Questions to figure out the “WHO”:
- Who are the best customers to work with?
- Who places the highest value on our product?
- Who stays with the company for the longest times?
Step 2: Research your target market to identify the best customers
Okay, so now you’ve identified your company’s best customers. Now it’s time to work out why they’re such great customers. Why did they buy so quickly? What is it about them and your product that has made them such a great fit.
The simplest way is often to ask them. If they’re great customers, they’re probably going to be pretty happy to talk to you about why they like your product. So schedule a few interviews and dig into it with them.
It may not be that easy to persuade them to come in for an interview, of course. In order to get your high-value customers onboard for an interview you should demonstrate to them the value they will get from participating. By informing them in advance that the purpose is to improve the quality of service they get as customers you are allowing them to feel in control and provide them with the power to influence their standing as customers.
You should always offer a choice — a phone or video call — and if they’re too busy for that, an online questionnaire they can fill on their own. The approach should be made by the person in your organization with the best line of communication to them, whether a sales rep or a member of the success team.
Finally, showing your gratitude for the customer’s time and willingness in the form of a free service upgrade, or an Amazon gift card, is a sure way to really close the circle on this meaningful customer interaction.your ideal customers.During the interview it’s important to go for the kind of data that falls in the realm of the ‘emotional relationship’ your customers have with your company. The secret here is to, again, empower your customers and let them take active part in designing and influencing the relationship.
Questions to figure out the “WHAT”:
- What is the number one thing that can increase your satisfaction with our product or service?
- What priority or challenge is on top of mind when using our product / service?
- Save time
- Cut down costs
- Simplify work processes
- What makes you happy and sad about our product or service? What are the best and worst features?
- As an active user of our product / service, do you feel it fulfills its promise?
At the same time as conducting user interviews, it’s worth trying the demographic approach. How do these customers look?
Questions to figure out the demographics and logistics:
- Geography – where are they based, and are they local, regional or national?
- Company size – how many employees do they have?
- Business area – what do they actually do?
- Budget – how much cash do they have to allocate to products like yours?
- Decision-makers – who’s in charge of actually buying from you?
- Objectives – what do they want to achieve as a business?
- Pain points – what problem is your product solving for them?
Again, your ideal customer profile isn’t limited to these questions.
The key thing you’re trying to figure out is what they all have in common. It may be that your customers come in all sizes but are all in the same business.
There are a million different ways you can approach these organisations and look for similarities.
It’s also worth looking at data on companies that you didn’t close successfully. What do they look like? If your ideal customer profile is working properly, you should be able to see the traits that those prospects don’t share.
Step 3: Build a behavioral profile of your ideal customer
As your CRM provides you with ‘dry’ data about your customers’ ongoing sales and retention cycles, and your analytics tools with website usage, merging these data points with ‘wet’ insights from your customer interviews will land you valuable ICPs.
According to Myra Sugg, a media sales consultant: “The key is to identify patterns that emerge from the various data collection mechanisms. These patterns can be common traits, behaviors or pain points, that together will help you build the profile blueprints of your ideal customers.”
Sugg explained the steps she takes to do that:
Steps to build a profile of ideal customer behavior:
1. Use a spreadsheet to overlay all the data points and insights.
2. Cross-reference similar entries to see where grouping occurs.
3. Tag each grouping (where repeated data points and insights pile) to represent the ICPs.
4. Extract multiple profiles of the ideal customer:
- Their needs
- Their responsiveness
- Their ongoing interaction with the company
- Their emotional connection with the brand
Now, we’ve got a series of metrics which define your ideal customer profile.
At this point, we need to think it through subjectively. Put your feet in their shoes. Walk around the table and sit in their chair.
Questions to ask yourself:
- What kind of impression do you make to them?
- Would they know that they fit your ICP if they came to your website?
- Would they feel comfortable with you and your company?
You can use this information to model behaviors at these companies, and the kinds of people at these companies with these context-building questions.
Questions to gather contextual information:
- What does the typical day look like for the typical user of your product?
- At what points are they getting frustrated and upset, and can you stop that happening?
- What economic, political, social, regulatory and technological forces are acting on them?
- What does the future hold for them?
Questions to figure out how your ideal customers process information:
- How do they acquire information and knowledge?
- What blogs and books do they read?
- Are they active on particular social media?
- Where might they go where you can reach them?
Finally, you’ll also want to confirm your understanding on who implements and uses the product, and who is accountable for ensuring that the purchase is a successful one.
I Have My Ideal Customer Profile. Now What?
Once you’ve built the profile, you have to use it.
One key use is in prospecting. The ideal customer profile allows you to look at new prospects and run them against a checklist. How similar are they to companies which have bought your product and been happy with it in the past?
The other is actually selling. By the time you’ve finished developing the profile, you should have a really clear picture of the environment in which your ideal customer is operating, the pain points they feel, and the goals they are trying to achieve.
All of which offers you everything you need to convince them that you, and only you, hold the solution.
Also published on Medium.