Vocab for Marketers: What is an Ideal Customer Profile (ICP)?

Definition

An ideal customer profile (ICP) represents the characteristics and behaviors of the optimal (or most valuable) customer that aligns with a business’s products or services. Once established, an ICP serves as the single source of truth that companies refer to when evaluating prospects, and creating sales and marketing collateral. 

Some of the attributes companies use when creating their ICP include: 

  • Budget, revenue, or company size: What’s the price range a customer would pay for your product or service? Is your brand best for mom-and-pop shops and startups, or are you able to provide solutions for enterprise-level companies?

     

  • Sector: Which industries do you serve, and are there any you don’t want to serve?

     

  • Location: Are there counties, cities, states, regions, or countries where you don’t sell? What about where you do sell?

     

  • Legality: Are there legal constraints you need to keep in mind for your customer base, such as age or government regulations?

     

  • Product or service limitations: Do you have standard service level agreements (SLAs) regarding your company’s response times, and can you meet faster response demands? Can only a certain group of people use your product or service?

How Marketers Use ICPs

Marketers use ICPs as a framework to ensure alignment across the organization. Establishing the ICP helps to define the problems your company is solving for, match your product or service offerings with customer requirements, and guide future updates. 

For example, let’s say you’re an eCommerce shoe brand specializing in footwear for nurses, and you’ve established a presence in the market over the past few years. Your sales are down, so you’ve decided to create a data-driven ICP so you know how to tailor your marketing and sales efforts most effectively. You sit down with the stakeholders on your team to decide the following:

  1. Budget, revenue, company size
    • The price range a customer is willing to pay for one pair of shoes is $70-$100
    • The customer makes an annual individual income of $65,000-$120,000

       

  2. Sector: The ideal customer works in hospitals or a healthcare setting

     

  3. Location: We only sell products to customers located in the contiguous United States, which excludes Alaska and Hawaii

     

  4. Legality: The customer only purchases work shoes that follow Protective Footwear Standards

     

  5. Product or service limitations: The shopper expects our customer service team to address and respond to email requests within 24 hours

After creating and obtaining approval for the ideal customer profile from all stakeholders in your organization, you can then develop specific buyer personas that fit within your ICP.

Additional Resources

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