Do you REALLY have an ICP?

I recently ran an event with revenue leaders discussing whether pipeline is filled with ICP. I’ve previously commented that most is not, and research shows it’s around 18%. I was further surprised at how many companies don’t have a clearly defined icp at all, and the ones that did often said that the ICP was being defined by Sales.

WTF!!

The Ideal Customer Profile is a definition of the target companies for your product, messaging and sales. Without an ideal customer profile, how can Product know what to build? How can Marketing deliver coherent messaging? How can Sales win?

ICP is those customers who are most likely to buy from you and get value from you, and therefore remain as customers. “Most likely” - not any company who could buy and could get value. You may have a product which everyone can use, but in the short-term you need focus. You need an ICP which is comfortably large enough to meet your short-term goals, say your next two years’ revenue, but not larger.

There are a lot of inputs to ICP.

1️⃣ Sales data is incredibly valuable. Which deals move through the pipeline fastest?

2️⃣ Usage data and NRR/churn info tells us who is really getting long-term value.

3️⃣ Market research, by which I mean all our customer engagements from exec conversations, sales calls, marketing, as well as any other research we can do.

4️⃣ Product research: what else is out there, how are people using it, where are they getting value, how do they workaround challenges that you can solve?

And don’t forget the reason the company got founded, if you are a relatively new organisation, the founders had a key mission, don’t lose sight of it.

If you do not have an ICP which is understood by your entire organisation, you will

💣 build product for one audience, while selling to another

💣 have enhancement requests that do not reflect the product vision

💣 have market messaging which confuses customers once they see the product.

If sales is driving ICP, which can happen because they have access to data around who’s buying quickest, you can run into exactly these challenges.

And… If you do have an ICP and everybody was bought into it, keep in mind that nothing is static. Did the market move? Have you started hearing different rumblings from customers? Are previously good fit customers churning more than usual? Has the conversion from Discovery to later stages reduced?

If any of these are true, review the ICP.