ICP for Sales: Everything You Need to Know

Why do I need an ICP?

Ever wondered why some businesses seem to always hit the mark with their sales? Well, they’re usually running their campaigns around a data-backed Ideal Customer Profile or ICP.

In sales an ICP ensures that your efforts are focused on and tailored to prospects who are most likely to maximize revenue.

In marketing an ICP lets your team create tailored marketing collateral addressing your potential buyers’ interests and needs. Whether it’s a sales landing page, a screen recorder demo video, or product one-pager.

Benefits of ICPs

Creating an ICP changes how business teams connect with buyers, boosting the chances for sales. Let’s break down how a well-defined ICP can elevate your business:

• Reduces wasted time and effort during the sales process
• Improves win rate
• Accelerates sales velocity and shortens the sales cycle
• Helps ensure effective marketing content
• Informs product development

What attributes are used for making an ICP?

When making an ICP, you’re creating a detailed character for your business story. Each detail you choose adds insights into the needs of your target customer, their purchasing power, their goals, among others.

An ICP includes the following information:

1. Demographic information
2. Firmographic information
3. Technographic information
4. Psychographic information
5. Customer Lifetime Value (CLV)
6. Compatibility with your product or service

Now let’s look closer at what these different types of data actually mean…

Demographic data

• Age: What’s the typical age of your customer base?
• Gender: What gender is the buyer likely to be? (gender can also influence product preferences and needs)
• Location: Where are your customers based?

Demographics can determine customer preferences and needs. That means that knowing them can help you decide the right strategies to ensure effective sales.

For instance, if your ICP states that your target market is in Sydney, you’ll likely work with an SEO agency in Sydney. You won’t work with one in New York.

That’s because that SEO agency knows more about how Internet users in Sydney perform local searches. It can help better ensure the visibility of your content targeting Sydney users in SERPs.

Firmographic data

• Industry: What sector do your business customers operate in?
• Company size: Are your customers small startups or mid-sized and high-growth companies?
• Annual revenue: How much do your customers (companies) earn from the sale of their services and products?

Understanding firmographic data helps you gauge a few important things. These include your ideal buyer’s spending power, priorities, challenges, and decision-making process.

This lets you craft the right sales and marketing messages and find out what products they need.

Technographic data

• Technologies used: What software or hardware do your customers currently use?
• Adoption rates: How quickly do your customers adopt new technologies?

For example, companies that build data pipelines often use a web scraping API to get information about their competitors and market signals to their customer profiles.

Knowing technographic data can help you determine openness to innovation and new solutions. It can also help you tailor your offerings to fit their current tech.

Psychographic data

• Values: What are the core values that drive your customers? Sustainability, cost-efficiency, or perhaps innovation?
• Pain points: What are the specific challenges or problems that the potential customer is looking to solve?
• Priorities: What matters most to your customers? Is it family, work, or health?
• Goals and objectives: What are the business goals and objectives that the potential customer aims to achieve?
• Urgency and priority: How urgent are their needs for your solution? And what’s the priority given to solving those problems?

This information is hard to come by, but if you can put your hands on it, you will be able to dramatically improve your sales prospecting efforts and your sales collateral.

Customer Lifetime Value (CLV)

• Revenue Potential: What is the estimated revenue that the potential customer can generate over their lifetime?
• Retention Rate: What is the likelihood of the potential customer continuing to do business with your company over time?
• Churn Rate: What is the rate at which the potential customer might stop doing business with your company?

Compatibility with your product or service

• Fit with offerings: How well does the potential customer’s needs align with your product or service offerings?
• Sales cycle length: What is the typical duration of the sales cycle for customers with similar profiles?
• Success stories: Are there historical success and case studies of similar customers who have benefited from your offerings?

4 steps to creating a revenue-driving sales ICP

Now let’s cover how to create an ICP that will serve as a key driver of sales.

1) Visualize the final ICP output

Before looking at customer data, doing interviews, or brainstorming, you need to know how you want your ICP to look.

This means you need to define your ICP categories beforehand.

Will you include company revenue and industry in your final output? Will you incorporate technographic data?

Knowing these ICP categories from the get-go keeps your research focused.

Don’t skip determining your ICP layout. When you have an idea of how you’d like your categories to be organized, it’ll be easier to put everything together to create your ICP later.

2) Check and evaluate existing customer data

• Determine what customer data you have at your immediate disposal. Check your CRM tools, sales intelligence platforms, and any data collection tools you have.
• Countercheck your stored customer data with the ICP categories you determined in the visualization step.
• Make a list of the ICP categories you need the data for. You’ll get back to this list once you start doing supplementary research for the information you lack.
• You also have to evaluate the data at your immediate disposal to try to find common attributes among your loyal customers.
• Make a list of your most profitable clients in the last quarter or so (with the most profitable at the top). Then look at shared attributes based on criteria for which you have data available.

If you have a lot of clients and a lot of data you can use AI engines like ChatGPT or more advanced business intelligence tools.

3) Set up customer interviews to supplement current data

At this stage, you want to gather the data you still don’t have but need to create your ICP.

• Go back to the list of ICP categories you made in step 2, for which you lack the data?
• Start making a list of questions you need to ask to get all that information.
• Let’s say one of the categories on your list is technographic data. Then you should write research questions revolving around technology, like what technologies your customers use, how frequently they change technologies, or how long it takes for them to adopt a tool.
• Now gather some of your loyal customers and ask them. Send them compelling research invites via email. Specify the benefits of joining your pool of interviewees, e.g. they can help you craft a better product or more effective marketing campaigns.

4) Document and prioritize crucial attributes

The final step is to create your ICP sales document. Go back to all the data you’ve gathered from your data collection tools and interviews.

Then when creating your ICP document, just highlight your loyal customers’ commonalities. You’ll also want to put front and center what you think are the attributes that contribute most to increased revenue.

Here’s an example of how ICP data can be organized: