The Science Behind Developing an Ideal Customer Profile

The Science Behind Developing an Ideal Customer Profile

August 3, 2021

Whether you are selling to businesses or individual consumers, having a deep understanding of who you are targeting is integral to any sales process.

However, this is much easier said than done.

For start-ups and those in emerging markets, there's no playbook or persona to reference for new customer acquisition. The best thing you have at the start of your journey is a highly educated guess.

As a result, the "perfect user" for most new businesses is a stock image of some random happy person in a sales or marketing slideshow with some traits listed out.

So where do you get started?

What Problem are you Solving?

Even before researching competition, you should rethink the actual problem you are solving for. Not only, "what problem are we trying to solve?" but also "who is solving the problem?" and "who are we solving the problem for?".

Upon analysis, it may become evident you are solving a problem for an emerging market. This could indicate the issue you are solving for has yet to come forth, or that demand isn't there yet.

However, this isn't a terrible thing as you can guide your strategy to an educational approach to show why your solution matters.

Next comes the question, "what are my competitors solving for?". This will answer what problems they solve for as well as the ones they don't.

Your opportunity will arise from the problems they don't solve for, guiding your product strategy as well as sales and marketing.

If competitors solve 80% of a problem, focus on how you can you solve for remaining 20%.


Understand Your Industry

understand your industry

The next step in developing your ideal customer profile is to understand where your product stands amidst the competition. This is where you can start getting more technical than conceptual.

Developing battle cards and researching every possible competitor will help you see where your business fits in the competitive landscape.

First, start mapping out information for each identified competitor such as strengths, weaknesses pricing model, customers, reviews, and employee count. The more data you are able to collect, the more you'll be able to understand about who you are selling to.

Customer success stories are another a great place to look. Any case study published by your competitor is a low-hanging opportunity to see what areas they excel or lack in. Specifically, look at the metrics which were cited as the areas of improvement.

Another thing you can do to gain insights is completing an SEO competitive analysis. Tools such as SEMrush and Ahrefs can help monitor competitor's organic keywords, backlinks, related content, and pay-per-click keywords. Having a grasp on this information can help guide your future SEO and content strategy.

Once you have an idea of where you fit in the competitive landscape, then you can start putting together the image of what your ideal customer looks like.

What makes up an ideal customer profile?

An ideal customer profile, or ICP, is a term that has many interpretations in the world of sales and marketing. An ICP is really just a fictional account that would create the greatest mutually beneficial value. They would cost almost nothing to acquire, have a high lifetime value, and very low likelihood of churning.

While all of these metrics vary by industry, here are three simple concepts to reference:

1. Customer acquisition cost

This is simply how much it costs to gain a customer. Customer acquisition cost ranges from $7 in the Travel industry on the low end to upwards of $395 in the Tech/Software industry.

2. Customer lifetime value

Customer lifetime value, on the other hand, is the net profit generated from a given customer. According to BDC, as a general rule of thumb, your customer lifetime value should be roughly 2.5-3 times their acquisition cost. For instance, if you profit around $100 from a specific customer, it shouldn't cost you more than $40 to acquire them.

3. Churn rate

Lastly, churn is the average rate at which customers unsubscribe or stop doing business with a company. Zuora’s 2019 Subscription Economy Index reports average churn rates across a number of industries, ranging from Business Services on the low end (16.2%) to Media on the high end (37.1%).

Understanding just these three metrics within your business will help hone in your ideal customer profile. However, in the groundwork stage of building a company, this data will have to be approximated from future financial plans (balance sheets & cash flow projections for instance).

As you acquire more customers, the whole picture will start coming together.

Goals, challenges, and characteristics

Fortunately, there's a less quantitative part to developing your ideal customer profile that revolves around goals, challenges, and characteristics. Every potential customer has unique criteria for why they would make a purchase of your product or services. At the core, it's really just providing more value than the monetary amount they pay you. While the specificities for need will arise within each account, generally speaking there will be overlap with the goals, challenges, and characteristics.



What will your product or service help accomplish for your customer? Potential customers will certainly have their own ideas regarding this and you need to be ready to fulfill their objectives. An onboarding specialist or your sales team need to be ready to communicate this efficiently.

When you are starting your journey as a new business, you may not even have a sales organization...and that's fine! As long as someone is in charge of working with your first few customers to understand how they will use your product or service, that's just as beneficial.

This person simply needs to absorb everything this new customer has to say about your solution. Product tours should be performed in a fashion where the onboarding specialist or account manager is asking the majority of the questions.

Initially, your new customer might not even know what goal they are trying to accomplish with your product. This is why staying in-touch on a daily basis can help guide them to this target.

At the end of every quarter, it would even be wise to schedule a meeting with them to see how they're doing and challenges they're facing. Investing in a tool like Amplitude can provide analytics of how your customers are using your product.

Not to mention, sourcing new business through your existing customer network is an effective pipeline generation strategy. You rarely end up with clients who don't fit your ideal customer profile (ICP). So, offering your customers an incentive for referrals is a powerful inside sales strategy.



Once you understand what your customers are trying to achieve, then you can start identifying challenges that arise from their interaction with your product or solution. What are the blockers that stand in the way of achieving their goals?

Learning the tech stack of each customer isn't easy by no means. Yet the more you customers you talk to, the more well-rounded you will become in understanding the internal processes of your clientele. Questions you once had to consult others about will be pulled right from the top of your head.

Once you develop a cadence for how to help each customer achieve their goals and clear recurring obstacles, then you can start listing characteristics that would make up your ideal customer.



Understanding the characteristics who's using your product the most will help develop a more targeted approach when going after future customers.

Note attributes such as the number of employees, their geographic location, estimated revenue, what technologies they're using, who they're selling to, and other such details.

It will likely take a while until you start seeing repetitive traits amongst your customers. When you do see one emerge, prioritize this characteristic above the rest. Three small real estate brokerage firms? That's not a coincidence! Guide your future strategy to target this audience.Pattern overlap is the name of the game here.

Buyer Persona versus ICP

While an ICP is a fictional description of the account you are targeting, a buyer persona is the semi-fictional character of the human who would buy from you.

In B2B sales for instance, within your ICP, you could have multiple buyer personas that all play a unique role within the buying committee.

Buyer personas generally go into much more detail about what this person's everyday life looks like - some even talk about what their life outside of work might be like.

While this is helpful information, you really need to understand the motives behind each buyer persona more than anything.

What Motivates Each Buyer?

Each buyer within an account will have different goals. For sales people, that could be hitting numbers. For marketers, maybe driving a certain amount of leads to sales.

Executives or the product team might have different goals revolving around ensuring a certain number of customers are actually using the product.

Regardless of the motive for each buyer persona, understanding how they work together is even more critical.

This is why sales usually deals with new business for most companies as their goals loop back into that of executives or the product team.

You Will Never Achieve Perfection

Understanding the ICP and buyer personas are important, yet you will never achieve perfection for either. By continually updating each, you will only refine your sales and marketing processes for the better.

Don't be discouraged if your customers seemingly have nothing in common. Eventually you will recognize a pattern that you can leverage when targeting new accounts.

Patty DuChene
Patty DuChene

Patricia DuChene (also known as Pat, Patti, Patty, Tricia, and PD) is the Vice President of Sales at Postal, an Offline Marketing Automation platform that generates leads, increases sales, and improves customer retention. Prior to joining Postal, Patricia was the Vice President of Int'l Sales & Managing Director for a work management software company called Wrike, where she built out client facing teams in Dublin IRE, Melbourne AU Tokyo JP, and Kyiv UA. A native of the 805, she was thrilled to join the Postal team with the promise of delivering an authentic, scalable engagement platform in San Luis Obispo. She is a passionate advocate for women in technology and takes an active approach when encouraging women to consider careers in technology. When she isn't in the office, Patricia can be found hiking with her husband and princess pug, Hammond von Schnitzel.

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Want to increase your marketing spend ROI by +19%?
That's what Postal clients achieve on average after 3 months using the platform.
Increase My Marketing Spend ROI