October 16, 2011 | Sales Benchmark Index
Sounds so simple, but so many organizations struggle to clearly articulate and document what their Ideal Customer Profile is. Why’s this so important:
- How do you know where your sales “sweet-spot” is?
- How can you “point” your marketing dollars at the right targets if you don’t know what target to shoot at?
- How do you create a Demand Generation strategy without defining the target?
- How do you provide relevant content to the appropriate person at the right point in time if you don’t know the target?
Account Segmentation which includes defining the Ideal Customer Profile is the first step to building the foundation for a world class sales organization. It all starts with the Ideal Customer Profile.
Definition: The Ideal Customer Profile (ICP) indicates your sales sweet spot where companies represent the best fit for your product or service. These are the segments of the market that stand to benefit the greatest from adopting your solution. The goal is to target the type of customer where you win the most.
The ICP includes a cross-section of criteria that identifies your ideal target. Firmographic data is the foundation on which the ICP is built. Some of the most commonly used criteria in defining the ICP are:
- Annual Revenue
- Total Number of Employees
- Industry Vertical
- Sales footprint (US, Global)
- Buyer Role
Other criteria may include company lifecycle (growing, mature, declining), workforce make-up, existing physical/technical infrastructure, or senior leadership changes.
Organizations can utilize their current data to create the ICP.
How do you build an Ideal Customer Profile? Follow these easy steps:
- Pull reports or review past 18-24 months of sales data for sales by industry grouping and size of customer organization (SMB, Enterprise, Revenue strata).
- Determine the top 3 industries represented in your customer base.
- Identify customer size that best represents your current install base (annual revenue, total number of employee’s)
- Confirm that the customer size has at least the same statistical relevance to your top 3 industries segments. If not, assess which customer size best matches the customers in your top 3 segments.
- Confirm the sales footprint for your current customer base.
- Confirm the buyer of your product or service (this is the Economic Buyer who has the authority to sign a contract)
Fill out the worksheet for your organization.
Example:
Profile Element
Industry #1
Industry #2
Industry #3
Industry Vertical
Chemicals
Aerospace
Transportation
Annual Revenue
>$1 Billon Revenue
>$1 Billon Revenue
>$5 Billon Revenue
Total # Employee’s
15,000
9,500
24,000
Sales Footprint
US & Canada
US & APAC
GLOBAL
Buyer Role
CIO
CIO
CIO
This example assumes that industry is the top segmentation driver. Industry is most common, yet analysis of the customer base should look beyond industry for other more telling drivers of need.
Working Copy:
Profile Element
Industry #1
Industry #2
Industry #3
Industry Vertical
Annual Revenue
Total # Employee’s
Sales Footprint
Buyer Role
You’ve now developed the initial framework for your Ideal Customer Profile. You’re not done yet, your ICP needs to be vetted and validated. Once you’ve completed an exhaustive validation, the next step is to align your messaging (Buyer Persona) to your ICP.
A winning sales strategy starts with the Ideal Customer Profile. Don’t build your fiscal 2012 sales strategy shooting at the wrong targets.
Don’t have the Ideal Customer Profile or Buyer Persona’s developed? Contact SBI to help your company develop a winning Sales Strategy for 2012- starting with the Ideal Customer Profile.
