Looking at the growth rate of the SaaS industry, you’d think that people are more than willing to spend money on software solutions that promise to make their everyday lives (and professional endeavors) easier. Not quite, though. Despite projections forecasting the total SaaS spend to reach $171.9 billion in 2022, most buyers still prefer free solutions. […]
What is an Ideal Customer Profile?
An Ideal Customer Profile (ICP) is a data-backed description of the pain points and firmographic characteristics that define your hypothetical ideal customer – the type of customer that would most benefit from the products and services that you provide.
For the purposes of creating an ICP, ideal customers may be defined as those who:
- Experience the pain point addressed by your product or service,
- Experience the pain point frequently, such that it has become a top-of-mind issue,
- Are actively searching for a solution to the pain point,
- Are prepared to adopt the right solution for the pain point, and
- Have the available budget and resources to pay for an implement your solution,
When these conditions are met, the ideal customer has demonstrated a business need for your solution, along with their readiness, willingness, and ability to make the purchase.
It’s also important that you can make a profit by selling to your ideal customer – that means that your anticipated customer lifetime value (LTV) for an ideal customer must be greater than the total customer acquisition cost (CAC).
For B2B SaaS companies pursuing an account-based marketing strategy, creating an ICP gives you the ability to effectively prioritize your sales efforts, allocating the greatest number of resources to winning the accounts that are most likely to benefit from doing business with you.
Targeting firms that fit your ideal customer profile is likely to result in shortened sales cycles, elevated rates of customer satisfaction and retention, and faster ARR growth for your business.