It’s time for a new sales strategy.
Nearly all (99%) business leaders say that their organizations are cutting costs due to economic uncertainty.
This means budgets are being squeezed, and potential new purchases will be heavily scrutinized in lengthy procurement processes.
As a result, the overriding theme you’ll repeatedly see this year is ‘doing more with less’.
This makes it more challenging than ever to win new business as companies strive to make every penny work harder for them.
But, as a sales professional, you still have sales targets to hit – so what can you do?
Put simply: you need to work smarter, not harder, and develop different strategies to win new customers.
Strategies that will help you find new customers you can sell more to. Strategies to help you find customers your company can retain long-term.
The solution?
Spend more time selling to prospects who fit your ideal customer profile!
As sales plans go, it’s pretty simple. But it’ll make you 50% more likely to acquire new customers.
Not sure what an ideal customer profile is, or how it can help you close more deals? Let’s take a closer look. 🔎
What is an ideal customer profile or ICP?
An Ideal Customer Profile (ICP) is a document that outlines the type of company or individual customer your business is best suited to serving.
By identifying and then focusing on the unique characteristics of these ideal “best fit” customers, your marketing and sales efforts will become more effective.
Businesses that meet your ICP criteria will buy more of your products or services initially. They are also more likely to be retained as dedicated customers over time.
On top of this, because of their compatibility with your business, customers who fit your ICPs are likely to be more satisfied with the customer experience they have with you.
This means that they could become brand ambassadors and potentially recommend your company to others, creating referral leads that have a 71% higher close rate.
But to define an ICP, you need data. Lots of data.
Measuring data for an ideal customer profile
The smartest way to develop your own ICP is to look in-depth at the existing customer data in your CRM.
By using filters, you should be able to dissect all your customer data to determine the best-performing customers in your customer base.
Before building an ICP, you’ll need to thoroughly analyze the firmographic, environmental, and behavioral data stored in your CRM to understand these customers in more detail.
But what does this mean?
- Firmographic – this is information to help categorize different types of organizations. This includes data on industry, size, vertical, revenue, etc.
- Environmental – this gives information on the conditions they’re operating in. For example, the technology they use, regulations they must adhere to, etc.
- Behavioral – how have they interacted with you, and how likely are they to buy? Will they download your content? What does the buyer's journey look like for these organizations?
Once you have an idea of what your ideal customers look like, you’ll need to develop an ICP document to crystalize your thoughts into a dedicated strategy.
We’ve prepared an ideal customer profile template to help you with this.
Ideal customer profile (ICP) template for B2B buyers
In the ICP template below, we’ve included all the key areas you should consider and guidance on what to include in each section. It’s best tailored to your business needs.
When completing your template, it's important that you don’t confuse an ICP with a more generic ‘buyer persona’ or ‘target customer’.
As Gartner states:
“The ICP is focused on the most valuable customers and prospects that
are also most likely to buy”.
Getting your ideal customer profile right is critical to your company’s success.
Not only will an ICP help boost sales performance, but it will also mitigate against bad-fit customers – those can have devastating consequences for your company.
The impact of wasting time on bad-fit customers
The sad truth is that at least 50% of your prospects are not a good fit for you.
Yes, you read that right. Fifty percent! 😮
Not only are bad-fit customers more difficult to sell to in the short term, but they tend to have a hugely disruptive influence on your business in the long term, too.
But what is a bad-fit prospect or customer?
Customer Success pioneer Lincoln Murphy defines it as:
“A customer should be considered a bad fit when you cannot deliver immediate value, nor can you — based on where you’re at today, your available resources, etc. — realistically deliver future value in the required timeframe for these customers.”
It’s easy to overlook bad-fit customers.
I mean, a sale is a sale, right?
When times are tough, many businesses will be tempted to ‘take what they can get’ in pursuit of revenue – even if these customers don’t fit their ICP.
But this is a short-sighted mistake that could have huge consequences.
A bad-fit customer or prospect will be problematic for your business, causing issues like:
- Extended sales cycles (according to 86.6% of sales professionals)
- Price sensitivity and potential difficulty expanding their spending in the future
- Resource intensive to customer service
- Unlikely to stick around in the long-term
- Less likely to refer new business
It’s such an issue that by 2025, 75% of companies will “break up” with poor-fit customers, according to Gartner.
This is because the cost of retaining these customers is often greater than the benefit they bring. And it ends up being more expensive than acquiring good-fit customers.
Focusing on prospects who fit your ICP (instead of an “any customer’ profile”) could be the difference between thriving and not even surviving.
Hyperbole? Not really.
Research shows that companies with less than 10% of their customer base fitting their ICP are 50% less likely to survive over the next 5 years.
Wasting your time chasing sales deals with prospects that don’t fit your ideal customer profile is like trying to fit a square peg in a round hole.
You can probably “brute force” an initial sale from them, but the effort required to keep them as long-term customers just isn’t worth it.
Supporting bad-fit customers means huge missed opportunities for customer satisfaction, referrals, upsells, and cross-sells with customers who are the right fit for you.
But why else should you focus your energy on prospects and customers who fit your ICP?
4 benefits of focusing on prospects who fit your ICP
Selling to prospects who meet your company’s ICP criteria doesn’t just prevent all the downsides we mentioned – it has several incredible upsides, too, such as:
1. Exceeding targets
Just because new deals are tougher to come by these days doesn’t mean that you and your sales team don’t still have targets to meet.
Leveraging ideal customer profiles is a proven methodology to help marketing and sales teams meet company objectives and hit targets – even in tough times.
71% of companies that regularly exceed their revenue and lead goals use ideal customer profiles as a key part of their sales and marketing processes.
Focusing on the right kinds of customers, whose problems you’re fully equipped to solve, makes both the lead generation and sales process effective.
2. Winning more new business
Exceeding lead targets is one thing, but you still have to close the deal and win the business.
Sticking closely to a well-defined ideal customer profile is key to winning more new business.
This is because your sales team can focus on demonstrating the specific value you can bring to prospects who meet your ICP, making the entire sales process easier.
But don’t just take our word for it! Research shows that organizations with a strong ideal customer profile achieve 68% higher win rates than those companies that don’t.
Companies that align their sales and marketing efforts against ideal customer profiles will start to see a compounding effect, as more “good fit” leads turn into more new business.
3. Increasing your average deal size
Instead of coming from a scarcity mindset and chasing every penny from any prospect, using an ICP helps you approach sales from an abundance mindset.
This means your sales team can operate knowing that your solution is tailor-made for specific types of prospects and can price it accordingly.
For example, SuperOffice used to sell to anyone and everyone that was interested in CRM.
But after redefining our own ICP as part of our move upmarket, we saw:
- 160% increase in demo sign ups on the website
- 47% increase in average deal size
- 80% improvement in customer churn
Using an ICP to guide your go-to-market strategy means that your products and services can be uniquely positioned to add significant value to specific types of customers - who will spend more on a solution like yours.
4. Boosting overall growth
One of the things you’ll do as you put together your ideal customer profile is look at your current customer base for insights.
You’ll be able to quickly see the types of customers most suited to your organization and, of course, which ones aren’t.
Using customer insights will give you the insights you need to target an ICP that values your product, has the size and scale to expand over time, and is profitable to service.
This level of focus on the right kinds of customers will lead to significant sales and post-sales growth for your business.
In fact, research found that organizations using customer insights will outperform their peers and competitors in terms of sales growth by an incredible 85%.
The case for focusing on ideal-fit customers is clear – it has a direct impact on revenue and helps you avoid several negative outcomes.
The trouble is, without the right tools to help you, it could become a time-consuming endeavor. So, let’s take a look at how technology can help you develop and focus on your ICP.
How technology can help with your ICP
Your relationships with prospects and customers should be more personal.
This means creating personalized experiences throughout the sales and marketing journey that resonate with the needs of your ideal customers.
The trouble is that 57% of marketers feel they don’t have enough data to build a meaningful view of their customers, and produce useful ICPs in the first place.
On top of this, sales teams need rich data to prospect successfully.
To build ideal customer profiles properly and for your sales team to have meaningful, personalized conversations with prospects, you need to have the right tools in place.
And when we say “the right tools”, we don’t mean spreadsheets.
This is because a spreadsheet won’t be able to:
- Help you effectively control all your sales prospects
- Easily share and update sales data among multiple stakeholders
- Integrate with rich data sources
- Segment custom, ICP, and prospect data
Instead, you need a CRM platform that will help you to not only perform customer profile analysis and develop an ICP, but also:
- Have meaningful conversations with prospects over time
- Create personalized experiences to turn leads into sales
- Help you target the “right fit” prospects and stop wasting time
- Improve sales performance and ongoing customer relationships
Using a CRM like this will help you stop wasting time on prospects that don’t fit your ideal customer profile and focus on the ones that do!
Looking for a CRM platform to help you work smarter and turn relationships into revenue?
With SuperOffice, you get access to:
- Powerful data analytics options to help you easily build your ICP
- Robust CRM and pipeline management to help you track prospects
- Enhanced integrations to help you source rich data from 3rd party apps
- Personalized experience options to help you focus on your ideal prospects
Try SuperOffice today and start managing all your sales, marketing, and customer support relationships from one CRM platform.
