At this point you understand why defining your ICP is essential, so let’s dive into how you actually build your ideal customer profile in five steps.
Enrich your source of truth (CRM software, CDP software, etc.) with accurate and fresh data.
To accurately define your ICP, you’ll want to make sure you have complete firmographic and technographic data (like company size, technologies used, industry, etc.) for accounts in your database. Having the right data infrastructure in place will help set you up for success in later stages of the ICP building process.
Ask yourself what your business is trying to accomplish to define the success criteria for your ideal customer.
If you’re looking to maximize revenue growth you may want your success criteria to be high annual contract value (ACV). If your main goal is long-term customer retention, you may want to focus on finding companies with a high lifetime value. Determine what matters most to your company before diving into the analysis.
Look at the past to select your best-fit customers.
Utilizing the data foundation you established in step one and the success criteria you selected in step two, analyze historical data to gather quantitative learnings on your best-fit customers. If you selected high ACV as a success metric, identify the list of past customers that have a high ACV. Additionally, it’s important to talk with your sales and customer success teams to gather qualitative data on which customers they think are most successful. While data is critical to building an ICP, it doesn’t always tell the whole story.
Analyze your data set for shared firmographic and technographic traits like industry, number of employees, or country, for example.
You may notice that your customers with the highest ACV all have 100-500 employees, use HubSpot CRM, and are located in North America. Looking for commonality among your best-fit customers brings you to the fifth and final step.
Based on the shared traits established in the step above, create a silhouette of your ICP. In this step, it’s important to create a clear definition but stay away from getting too narrow. You can also repeat this process and create other ICP segments depending on the nature of your business.
As discussed in chapter one, an ICP may look something like this: