How to create and use an Ideal Customer Profile (ICP)

Bram de Bruijn

ICP stands for Ideal Customer Profile. An ICP is a description of the ideal customer that a business wants to target with its products or services. It is a detailed description of the characteristics of the customer who is most likely to benefit from the business’s offerings, and who is most likely to become a loyal, long-term customer. It is an important baseline to understand where we have a good product market fit and where we have potential market gaps. It’s a description of a company, not the individual buyer or end user. 

A good product market fit is defined as a particular space where we can successfully sell over and over into the same space with minimal tweaking of the product, a space where we can fulfill our customers’ business outcomes, and where we can make customers and users satisfied when using the product. 

The ICP is used as the foundation to decide which priorities need to be set to unlock specific geographies, verticals, or a specific size of customers. Everyone needs to understand that if we engage customers where we do not have a good fit, we run the risk of not having a successful implementation, unhappy customers, and potential churn. In a nutshell, a well-defined ICP will guide the entire business on where to focus (and where not to focus), by defining where we can be successful as a company. 

The positive impact of a well-defined Ideal Customer Profile

A well-defined ICP alignment should have a positive impact throughout the business. It should lower the cost of sales, shorten the sales cycle, and lead to less churn. It should also lead to higher win rates, higher user and customer satisfaction, and higher renewals. You can find more details in the figure below:

Diagram showing the positive impact of ICP alignment on business metrics. Improved ICP alignment reduces cost of sales, sales cycle, churn, and boosts renewals, customer satisfaction, and win rate. Misalignment increases sales cycle, cost, churn, and reduces renewals and satisfaction.

ICP use per department

  • Marketing: The ICP is input to see where focus can be applied, e.g. in terms of targeting verticals. 
  • Sales: The current ICP will function as a qualification tool for opportunities.
  • Delivery: The list of use cases can be used as an explicit check to ensure that we do not get into use cases we do not cover
  • Product & engineering: A way to set priorities and efforts in discovery and delivery of new functionality, i.e. when do we say “no” vs “yes”. 

Definition Product Market Fit (PMF)

Product-market fit is the degree to which a product or service satisfies the needs and desires of a target market. It is achieved when a company has developed a product that effectively addresses a significant problem or demand within a specific market segment and demonstrates strong customer interest, engagement, and satisfaction. Sometimes we encounter customers that are not a 100% fit but an almost fit. 

The qualifiers below can help in defining a PMF category.  

Table displaying ICP qualifiers. Green signifies a 'good fit,' with characteristics like high customer satisfaction and growth. Orange indicates a 'medium fit,' highlighting potential risks during project implementation. Red represents a 'poor fit,' posing high risks of project failure and customer churn.

Dimensions and Qualifiers

In a complex environment such as Security and SaaS, there are several dimensions to consider when determining when a prospect/customer is a “good fit” vs a ‘’medium fit’’ and a “bad fit”. We know from experience that in general, customers may have a good fit in a country and vertical, but because of the use cases that the prospect/ customer is trying to solve with a solution, it’s simply not a good match. 

Dimensions to use are: Geography (country or region), Vertical, Company Size, Cultural fit, Company maturity, Company phase, Technical fit, Company ambitions. 

To put those dimensions into practice we’ve plotted them on Beyond Products: 

Table explaining ICP dimensions. It covers criteria such as geography, vertical, company size, cultural fit, company maturity, technical fit, and use cases, showing how each factor influences the ideal customer profile.

Discover the power of perfect alignment with your ideal customer! Understand where your business has the best Product Market Fit and mitigate risks with a sharply defined ICP. We can help you with that

CTA: Get in touch with us

Bram de Bruijn

Bram drives sustainable growth and an efficient marketing machine with his expertise in commercial strategies and scalable solutions, backed by his (cyber)security background.