Companies spend valuable time and resources on finding and attracting new customers – with some SaaS companies spending more than 50 percent of revenue on sales and marketing. Casting this wide net may ensure that your company finds thousands of leads, but without a clear definition of your ideal customer, few of those leads are truly qualified and may never make it through your sales cycle. And those who do become customers may not be an ideal fit and end up churning out quickly.
So, how do effective companies mitigate their risk? By creating an Ideal Customer Profile (ICP).
Creating an ICP serves several purposes:
- It encourages an entire company to get involved in identifying the best prospects
- It requires using a single set of metrics to measure the attributes of an ideal customer
- It provides an opportunity to consistently dialogue with your customer base
Here are the the key components to constructing an effective ICP.
Ask for and mine your current customer feedback
The easiest and most accessible sources of information are your own customers, so ask for feedback on the entire sales and post-sale process. A good old-fashioned coffee or lunch or a brief phone call will allow you to listen and note what your customers really think and feel about your organization and its services, products and process.
Let data and analytics be your guide
While you can’t deny the power of a face to face meeting with customers, it always pays to comb through your data to discover which customers experienced smooth implementation and maintain high adoption. Even better, when social data is integrated into your existing CRM, it enriches your customer profiles and provides up-to-the-moment insights into your customer’s needs. Your entire organization benefits from this data which gives customer service, marketing and sales teams a dynamic, complete picture of individual customers.
Adopt a single set of metrics
When sales and marketing aren’t speaking the same language, the sales cycle can become complicated. But add in post-sale departments like customer success, and things can get downright ugly.
Make sure every team works together to agree on a single set of metrics that reveal how and when prospects are moving through the sales process, as well as the health of customers after the close. Constantly monitor ideal customer profiles and enable sales teams to prospect to audiences with the highest propensity to buy. Existing data from your CRM and other systems can serve as a roadmap to those metrics.
Faced with an increasingly savvy and connected base of customers, organizations have to think logically about using an ICP. This begins with listening to their core audience, recording their insights, constructing the ICP and then creating a sales process that works for the intended audience.