Believe it or not, but even some business professionals tend to mix these two important concepts and use them interchangeably.
However, despite being seemingly similar, ideal customer profiles and buyer personas are very different, but the point is that you need both in order to effectively advertise and sell your products or services. These two models will allow you to identify and segment your target audience into a number of smaller segments, as well as find the right angle to approach them and tailor your marketing messages perfectly in a manner that will be appealing to each of them.
This should be your first step before you proceed to segment your audience and launch your first marketing campaign.
Why Do You Need an Ideal Customer Profile?
Let’s start with the basics.
The thing is that the more detailed and well-researched your ICP is, the easier it will be for you to target your ideal customers and create your marketing message that will resonate with them.
In a nutshell, whenever you’re writing a blog post, an email, or creating an offer, it’s important to understand who you’re talking to.
The benefits of having an ICP include:
- You’ll save a lot of time and money. It’s pretty simple – if you don’t know who your ideal customer is, you’ll have to resort to guesswork and you’ll try to attract a much wider audience. That way, your message will be diluted and you’ll waste time going after the wrong leads. All this will extend your sales cycle and you’ll end up with a lot of low-quality leads in your funnel.
- You’ll reduce customer churn. When you’re creating your offer with a specific audience in mind, the odds are that you’ll be able to hit the sweet spot. If you initially attract customers that are the right fit for your product or service. That way you’ll increase your customer lifetime value and prevent them from churning.
- You’ll improve your customer experience, and that will result in more referrals and positive word of mouth. By understanding your customers’ preferences, needs, and interests, you’ll make them happy. And they’ll gladly share their positive experiences with your brand with their friends and family.
What’s an Ideal Customer Profile and How to Structure It?
When you start a company, it’s of vital importance to land as many clients as possible.
The more people know about you the better, but this doesn’t mean that your marketing efforts should be nonselective and directed at reaching an extremely wide audience.
In this situation, the more, the merrier rule doesn’t apply, because you’ll end up dissipating your time, money, and energy on the wrong prospects. In other words, you need to shrink your focus and aim to connect with and engage a smaller number of sales-worthy prospects.
That’s where ideal customer profiles come in. These descriptions of perfect-fit types of companies that are interested in purchasing your products, and they should contain important facts based on the following criteria:
- Industry. It’s self-explanatory why you should determine what the right industry or niche is for your company is. It’s always better to start with just one industry, and then fine-tune your approach if necessary.
- Company size. There are various parameters for determining company size: the number of employees, revenue size, the number of existing customers, or some other metric.
- Identifying where companies that you intend to sell to are located is important for understanding the requirements of that particular market.
- Pain points. This is one of the most important details that you need to establish because knowing what issues your prospective customers are trying to overcome will help you meet their needs and focus on the features of your product or service that will be beneficial to them in particular.
- Find out how long this company has already been in business.
- What’s the main reason that would stop them from purchasing your product? Try to identify any obstacles or unfavorable factors that could affect their decision to do business with you, that is your product’s weakness in terms of its usability in this particular company’s case.
- What’s the main reason that will prompt them to purchase your product? Identify the strongest points of your product, as well as a unique selling point, that will be most appealing to the company in question.
- What goals your product can help them achieve?
- What products or solutions they’re currently using in order to achieve that goal?
These pieces of information are essential for narrowing your scope and dedicating your time and effort into attracting, nurturing, and engaging companies that fit the above description.
An example of a typical ideal customer profile doesn’t have to be more complex than this:
- The software industry
- No less than 50 and no more than 250 employees, with an annual revenue of up to $10 million
- With headquarters in big, metropolitan areas
- High overhead costs
- There are many similar products, with almost identical features
- Your product will reduce their costs and improve the productivity of their employers (list features that your competitors don’t have and connect them with benefits that your prospect will enjoy if they choose your product)
- An increase in annual revenue by 15%
A Couple of Tips for Creating Your Ideal Customer Profile
- Collect and analyze all your customer data. Use your CRM to export opportunity data and enrich it with more data points.
- Identify your best customers. It’s only logical that you want to model your ICP after your best customers and try to attract more similar business opportunities. Narrow down your list to 10 of them. Pay attention to those who get the most out of your product or service, those whose bottom line your product or services impact positively, as well as those whose pain points your product or service solves. In other words, determine your most profitable accounts, those that have been loyal to you longest, as well as those with the highest ROI resulting from the use of your product or services.
- Get feedback from your existing customers. This is the best way to learn everything you want to know about their experience with your brand. If they’re happy with your service, they will be more than happy to talk to you and tell you what they like and what you should potentially improve.
- Review negative feedback and complaints. Make sure to analyze both what your unhappy customers said to you and what they wrote on review websites. This can be an important lesson for you, as it will provide you with valuable insights into what you should change and improve about your customer experience. But that’s not all – it’s from these accounts that you can understand what your customers expect to achieve with your product or service, as well as how you let them down.
What Are Buyer Personas?
After you’ve created your ideal customer profile, it’s time to get into more detail and identify buyer personas. According to a widespread definition, a buyer persona is a fictional, generalized representation of your ideal customer, and it’s created by combining market research and the data about your current customers.
It’s important to emphasize that there can be multiple buyer personas within a single ideal customer profile. They help you understand characteristics and motivations of your target audience thus enabling you to find the best way to craft your marketing message.
When it comes to developing buyer personas, it’s essential to establish their personal traits, values, story, and needs.
Start with answering the following questions:
- What’s your buyer persona’s job title? This is crucial for determining whether your target audience are decision makers, middle-managers, or low-ranking employees so that you can tweak your approach and know what you can expect. To additionally refine the information, it’s a good idea to establish buyer persona’s education level, as well as skills, expertise, and professional interests.
- How does your buyer persona spend their day? How long are their working hours? What’s their preferred means of communication – email or phone? What social media platforms they’re using? What types of content do they like? What are their usual daily responsibilities? The answers to these questions will provide you with a detailed insight into your buyer persona’s working day and help you pick the communication channel and craft your marketing message.
- How old is your buyer persona? Are they married or single? Do they live in a city? Apart from demographics, B2B companies need to include firmographics as an important layer of their buyer personas, and that means what industry their company belongs to, what its size is, and in which department they work.
- What are your buyer persona’s biggest pain points? Other useful details include some typical triggers which prompt them to start looking for a solution, as well as what their level of frustration is at the moment when they decide to buy from you.
- What are the most important factors that influence your buyer persona’s decision-making process? Does urgency play a significant role, or are they motivated by your product’s features and benefits?
- What do they perceive as common barriers in the sales process? Is that the price of your product which is in discrepancy with their budget? Is their senior management uninterested in closing a deal with you?
- What are your buyer persona’s long-term goals? How can you help in achieving them? Come up with a plan that will help your buyer persona reach their goals, and explain how your product can help them succeed.