How to Build an Ideal Customer Profile (ICP)
This is part of a series of articles aimed at helping up-and-coming founders and entrepreneurs entering the startup game for the first time. The startup world can be intimidating so we’re here to provide free access to resources and education to help make it easier to get started.
Continuing in our series of posts aimed at helping founders, this week’s topic is all about building an effective Ideal Customer Profile (ICP) for your startup, and why it could be the difference between success and failure especially at the early stages of your company.
If you’re a founder and looking to better understand your archetype customer, then it’s probably better (and low-cost too) to build an ICP to front load and do the heavy lifting earlier versus building a product and then finding out that your customer doesn’t exist — we see too many startups do this!
Remember an ICP is not supposed to be gospel and never be set in stone, but simply a guide to help you navigate your customer’s wants and needs.
In fact, it’s a living document and we advise you to continue to update your ICP on a regular basis.
Let’s get into it…
What is an ICP?
An ICP is essentially a written narrative that details what exactly your dream company or consumer looks like (depending if you’re more B2B or B2C oriented, respectively). This usually exists in the form of an ongoing working document.
The following is a great primer to get you started (click on the image to expand)
Courtesy: Monday.com
The whole intention of the ICP is to provide you with a sense of direction and alignment to the customer you want to sell your product and/or service to — doing this further enables you to map various aspects of the customer to the product i.e. user journeys/stories, features, customer onboarding, etc.
Why you should care?
Having an ICP is crucial for a few reasons.
Oftentimes when you’re so deep in the complex, busy, and perhaps even stressful process that goes into starting an early company, it’s all-consuming that it may become easy to lose sight of who and why exactly you’re building your product for.
Typically, you want your customer base to benefit from your proposed product to cut costs, improve efficiency, or promote productivity in some way.
By laser-focusing on who the target customer is, an ICP serves as a constant reminder of the problem that your product is relieving for your consumer.
In return, it can be greatly beneficial for you as an early-stage company to keep an ICP to make the job of your sales and marketing reps cut out for them. By narrowing down what your customer should look like, you’ll know better who to target to generate the highest revenue and buzz about what you’re building.
How do we go about this?
Some standard methods of conducting research for an ICP include interviews, surveys, and collecting feedback from potential and past customers and clients.
These methods are cost-effective and will allow you to get raw information straight from the source that you can add to your ICP.
From here, we can feed the data that we obtain from these first-hand sources straight into your ICP.
It’s important to keep an open yet logical mind — we don’t want to use language that’s too limiting or too unrealistic. Identify common patterns in buying behavior, and demographics, and be alert for anything that sticks out.
What should it look like?
In general, an ICP should include these basics:
General demographic info — age, education, location, etc.
The exact problem(s) you are solving for your customer — manual sewer system repair is outdated, costly, and dangerous
Goals for your customer — what goal is your customer ultimately trying to accomplish?
Interests & motivations of your customer — why is your customer drawn to your product/service? What is pushing them to look for a product to solve their problem?
Customer journey map of what the path your customer will take or a buyer persona — start from the customer having an issue, becoming aware of your product, and the product actually being in your customer’s hands
Responsibilities — what is the customer responsible for that your product can assist with? How will your product help them better maintain their responsibilities?
Measurements of success — how does your customer measure the success of your product in practice?
Challenges — what are the challenges your customer is facing?
B2B vs B2C
It should be noted that an ICP for a B2B vs. B2C product or company will be a little different.
For a B2C company, it will be fairly straightforward and you can just follow the general directions above. The demographic info might be more general than a B2B company.
Usually, if you’re targeting individual customers, you’re casting a wider net than a B2B product, which is usually more specific in what other businesses they’re selling to.
B2B companies should also take into consideration who the key decision-makers are in the businesses they are aiming for. Whether it’s the CEO, Vice President, or Senior Manager(s), knowing who exactly at a business you’re targeting will be key in building an effective ICP for a B2B company.
Remember, an ICP can and should be a constant work in progress.
As your company scales, tweaking your ICP will be necessary and can be done with increased experience and documentation of your observations.
Keeping this secret weapon in your back pocket will lead to effective marketing and serve as a north star in your startup journey.
Until next time,
Nico.
References
Our General Partner (Barry Winata) had the chance to speak to Zach Lawryk on the Prompt Podcast — Zach is currently Head of Solutions Engineering (SE) at Rippling. Previously he was the VP of SE at Slack, Optimizely, and Box.
The episode talks about Zach’s experience and guidance on building a good ICP and how it maps to solutions engineering, marketing, branding, and products.
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