Pete Kazanjy might be the top sales analytics expert on the planet.
He co-founded Atrium, a game-changing data-driven sales management SaaS company, and Modern Sales Pros, the world’s largest community for go-to-market leaders. He also wrote “Founding Sales,” the handbook for startup founders and sales newbies.
But Pete started as a product guy. When it came time to bring customers on board with his first B2B software company, TalentBin, Pete did what he now recommends every startup founder do: He rolled up his sleeves and learned to sell.
Pete’s tremendous success is largely thanks to his passion for analytics and a tireless commitment to systematizing his sales motions. And if there’s a single piece of advice he’d offer to anyone looking to improve their ability to sell a product, it’s to clearly and tightly define the product’s ideal customer profile.
The role of ideal customer profiles in B2B sales
Every B2B sales motion has two crucial target audiences: those of the company that’s going to buy the product, and those of the team that salespeople interact with to make the sale happen. As Pete explains, “...there's the characteristics of the account, which is the company that's going to buy, and then there's the characteristics of the human and the personas you're going to be interacting with.” Understanding who these people are is essential to gaining buy-in from the company.
An ideal customer profile, or ICP (in business, this also stands for the “ideal client profile”), is a well-honed description of these customer types. This consumer profile details the characteristics, needs, and behaviors of a product’s best customer, including their:
- Demographic
- Buying habits
- Pain points
- Motivations
Since the individuals needing your product or service may have no budgetary or purchasing decision-making power required to bring a company on board, the ideal customer may not actually be the end user. Pete’s rule of thumb for determining the right stakeholder is to find the person with the financial or labor resources required to resolve the end user’s pain points. These decision-makers are the ideal customer for B2B companies, and you can better understand this ideal customer base by creating buyer personas off your ICP research.
Discovering buyer personas
There’s some overlap between a buyer persona and an ICP in sales, but the terms aren’t interchangeable. A buyer persona is a fictional representation of a company’s ideal customer based on market research and psychographic data. It imagines the customer as a fully fleshed-out character, including their:
- Age
- Gender
- Marital status
- Job title
- Demographic
- Buying habits
- Goals
- Challenges
- Objections
Here are three key differences between ICPs and buyer personas:
- Scope. An ICP is a high-level description of the type of customers a company wants to attract, while a buyer persona is a detailed representation of an individual customer, or a fake person hypothetically purchasing the product.
- Data sources. Base ICPs on internal data and market research and a buyer persona on customer feedback and interviews.
- Focus. An ICP focuses on business needs and goals. A buyer persona focuses on customer needs and behavior.
After defining your ICP, you can create buyer personas to accurately target specific customers.
An ICP's sales and marketing strategy impact
Because salespeople generally interface with potential customers during business hours, even the most motivated seller has only 40–50 hours per week to chase leads and close deals. Every hour is precious.
A well-defined ICP gives sales teams a leg up. With a clear understanding of the audience you’re targeting, salespeople can identify their most valuable leads and focus their efforts on the people most likely to convert into customers.
But a good profile should also inform the lead generation portions of your account-based marketing (ABM) strategy. With the help of a strong ICP, marketing teams can craft messaging that resonates with the target audience’s needs and motivations. Their finely-tuned marketing efforts will move prospects down the sales pipeline, increasing engagement and attracting leads that the sales team can actually work with. With quality leads in hand, salespeople make better use of their time and drive more revenue for the business.
Pete's 5-step guide to defining an ICP
Pete’s approach to developing effective sales motions is a bit like product development: He recommends an iterative and reproducible process. If your tactics aren’t working, make calculated tweaks and test them, noting what works and what doesn’t. Once things finally click, package it all up into templates and collateral to create a sales cycle that scales as the company grows.
The same is true for ICP creation. Expect a bit of a learning curve in the beginning, and when you figure out what works, create your own ICP template that makes the process easier to reproduce each time a new product or service nears launch.
To start, follow these five steps to define an ICP:
- Analyze existing customers. Gather data on your current consumers, identifying and recording shared characteristics and behaviors.
- Conduct market research. Use market research to validate and refine the characteristics identified when analyzing current customer behavior.
- Identify pain points. Identify your ideal customer’s motivations and the pain points your product or service solves.
- Develop a narrative. Build a cohesive narrative that describes the ideal customer and their needs by answering the following questions:
- What’s the problem?
- Who has the problem?
- What are the costs associated with this problem?
- How do people currently solve this problem?
- Why do current solutions fail?
- What has changed that enables a new solution?
- How does the new solution work?
- Share the ICP. After defining your ICP, share it with the sales and marketing teams to align strategies.
Creating a human connection
Old-school sellers treat sales like a transactional process. But modern salespeople understand that focusing on closing deals erases the most important parts of the process — building relationships and helping people solve their problems.
An ICP is a critical tool for businesses looking to attract new customers and improve client retention because it helps you truly understand your target audience’s issues.
“Just be very, very, very crisp around who has your problem and why,” says Pete. “Being more crisp around that… is a great way of making sure you’re not wasting time on people who don’t have your problem...” By approaching sales with a genuine desire to solve an issue, salespeople build trust and rapport with their prospects, ultimately driving more business. It’s a win-win.
Take your sales strategy to the next level
Lenny’s Podcast features interviews with world-class product leaders and growth experts to uncover concrete and actionable advice that helps you launch your own product. Listen to the full interview with Pete Kazanjy for tips on defining your ICP and creating a sales process that works for your unique needs.
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