For B2B companies looking to dip their toes in the pool of data marketing, getting started can be both invigorating and downright scary.
On the one hand, there is no shortage of tools available to help even the most entry-level of marketers roll out effective campaigns for boosting brand awareness and driving revenue. On the other hand, figuring out how to navigate the complexities of collecting, analyzing, and leveraging customer data to improve campaign performance often intimidates businesses — particularly SMEs — and deters them from developing robust data marketing strategies.
The secret is breaking down the process into digestible chunks. In previous posts, we’ve talked about using clean data for better persona-driven marketing and ways predictive analytics can help boost revenue from your target audience.
But, what if you don’t even really know your target audience?
It may seem like something every business should know, but the reality is that understanding who finds the most value in your solution (and why) often isn’t as “cut-and-dry” as you might expect. That’s why creating an Ideal Customer Profile (otherwise known as an ICP) is such a critical step in the data marketing process. ICPs give marketers a “true north” that guides the direction of campaign development and ensures you’re marketing toward the right customer all the time.
That’s why the ReachForce team put together this post as a go-to guide for B2B companies looking to develop ICPs for the first time or revise their existing ICPs to improve campaign performance. We hope this guide will help many marketers get over the initial hump in tackling data marketing by providing a framework for understanding your customers' needs and purchasing habits.
What Exactly is an Ideal Customer Profile (ICP)?
In its simplest form, an Ideal Customer Profile is just a description of the best possible client for your business. When you break that down, it means two things:
- An ICP is a customer who stands to get the maximum possible value from your product or solution. Most of the time, the definition of “maximum possible value” aligns with boosting revenue in some form or fashion. But for some companies, it could be a less tangible benefit like boosting employee morale or improving office efficiencies. In either case, it’s important to know what you bring to the table and the type of customer that stands to benefit the most from doing business with you.
- An ICP is also a customer that stands to drive the maximum possible value for your company. A true ICP is a mutually beneficial relationship. It’s just as much about finding a customer that contributes to your growth as it is finding one that can leverage your solution. Usually, there’s an obvious direct correlation between the two: a customer who loves your solution will ideally spend more money with you over time. But, that’s not always the case. Take McDonald’s for example. If McDonald’s offers a promotional deal like $1 Big Macs, their ICP is not the guy who eats three Big Macs a week and doubles up while the deal’s going on. Their ICP is someone who maybe loves the occasional Big Mac and uses the promotion as an opportunity to come in for a sandwich, while also purchasing a large fry and some apple pies, too. The customer gets a good deal on a sandwich they love, and the company benefits from revenue (from the fries and pies) they may not have had otherwise.
Identifying that customer can be the tough part. To truly understand them and determine the best way to market a product to them, you’ll need to know information like:
- Company size (revenue and employees)
- Years in business
- Other vendors they use
- Job titles of decision makers
And again, gathering that information can often be a turning point for many SMEs in pursuing data marketing. But for the B2B companies that do invest the time and resources into uncovering their ideal customer, the benefits are huge. ICPs do more than improve campaign performance: they boost marketing and sales alignment by putting a framework in place for better lead scoring, extend customer lifecycles thereby contributing to higher Customer Lifetime Values (CLVs), and they help generate a better brand reputation and more customer referrals.
And here’s the good news: if you’re using a data management platform like ReachForce, chances are good you already have quite a bit of the information you need to draw up your first ICP. And if you don’t, the steps you’ll need to take to put one in place are below.
How to Create an Ideal Customer Profile (ICP) for Data Marketing
Companies armed with clean, high-quality data are in a good position to develop accurate, impactful ICPs for their business. The key, however, is ensuring that your data is actually clean. As discussed in a recent post on the ReachForce blog, clean data is the key to data marketing success for SMEs. There’s less room for mistakes when operating with a smaller budget. That’s why it’s important to conduct regular data quality health checks to ensure you’re working with accurate, relevant information when making marketing decisions.
(ReachForce customers benefit from regular, automatic data quality health checks built directly into our platform. You can get your first data health assessment for free here.)
Step #1: Be Sure You Have the Right Marketing Technology in Place
Specifically, the tools you need to source high-quality customer information and the tools you need to keep it organized. Choosing the right data management platform can be one of the most important decisions for SMEs because data management sits at the foundation of any successful marketing strategy. Other tools might include:
- A social media management platform to understand the demographics of who follows and engages with your content on social media.
- Website analytics to measure sources of traffic to your site and the demographics of your most engaged visitors.
- SEO analyzation software to understand how people search for (and find) your business online.
Once you have the technology in place, you’re ready to move on to the next step:
Step #2: State Your Hypothesis
Just as a scientist uses experiments to prove or deny a hypothesis, a good marketer leverages data to test whether or not their perception of their company’s ideal customer aligns with reality. That’s why it’s a good practice to anecdotally describe your ideal customer before actually uncovering them through data analysis. Ask yourself:
- What type of company buys our product?
- What problem do we solve for their business?
- What does the average customer lifecycle look like for them with our business?
- What other products or solutions do they use?
- Who is the person (or group of people) at the company that actually gets the deal done?
With a hypothetical ICP in-hand, it’s time to move on to the data analysis portion of creating an Ideal Customer Profile:
Step #3: Dig Into the Data
Your hypothesis gives you a framework to measure against when analyzing data to find your real ICP. If you believe your ideal customer is a mid-size tech company based in a major metropolitan city, you can start your data analysis by quantifying the CLV of that profile versus small business or large corporate tech companies in major metropolitan markets. You could also look at mid-size companies in smaller markets, too. The idea is to change up variables to find the real factors that actually drive companies to do business with you. You may find that size of the business and location matter far less than industry (as with companies like Salesforce).
Of course, analyzing all of that data manually would be an arduous process. Luckily, there are a number of solutions on the market geared toward helping companies splice and dice data to better understand their target audience. Provided that data comes from a high-quality data management platform, you should be in good shape to automate much of this step.
Step #4: Gather Context for Your Discoveries
Once you know the identity of your ideal customer, it’s important to dig a bit deeper and find out exactly why they fit the mold. Just because you know companies with 250-500 employees are your sweet spot doesn’t mean you understand why that’s the case. To answer the “why” you need to gather anecdotal feedback from existing customers who “fit the mold” of your now-data-driven ICP. Often, the simplest way to do this is to call up your customers or send a brief survey. Ask them questions like:
- What is it about our product that made you choose us versus a competitor?
- What’s the most important feature of our product/service for your business?
- What’s the biggest problem our product/service addresses for your business? How effective are we at solving that problem? Would we be as effective if your company doubled in size?
That context allows you to understand both the “who” and the “why” behind your ideal customer profile. And with both pieces in place, the last step is quite simple:
Step #5: Publish Your ICP
When we say “publish,” we obviously don’t mean outside of your company. However, it is important that teams outside of your marketing department understand who this ideal customer is and why they want to do business with you. Sales teams, in particular, should be made aware of the details in your ICP. Doing so ensures there’s better alignment between sales and marketing about what defines a “high-quality” lead for your business, while also providing salespeople with some added context about customer behavior that may influence their sales strategy.
ReachForce helps marketers increase revenue contribution by solving some of their toughest data management problems. We understand the challenges of results-driven marketers and provide solutions to make initiatives like marketing automation, personalization, and predictive marketing better. Whether you have an acute pain to solve today or prefer to grow your capabilities over time, ReachForce can unify, clean and enrich prospect and customer lifecycle data in your business, and do it at your own pace.
To learn more about how ReachForce can help you optimize demand generation and your impact on revenue, get a demo today.