How to Create an Ideal Customer Profile In 5 Steps

Imagine going to bed with a pool of 60 million companies, each of which could be your first customer (that's the number of registered companies on LinkedIn now, by the way). You have better luck with finding that needle in the haystack everybody is talking about. I bet you are not having a good night's sleep.

What if you wake up with a new superpower—a crystal-clear vision of your best customers? Out of 60 million, you see 15 who stand out from the crowd and are ready to become raving fans of your product. That superpower is called the Ideal Customer Profile.

This article will cover what aspiring entrepreneurs, startup founders, and product leaders need to know about their Ideal Customer Profile (ICP) when spinning their new product. In addition to the detailed steps to build an ICP, we will outline why one needs an ICP first.

But first things first.

What is an Ideal Customer Profile (ICP)?

An Ideal Customer Profile is a detailed list of the characteristics of a company or a person who can get the most value out of your product and, in turn, provide the most value to your company.

You can think of doing an ICP as the work that police profilers do. They arrive at the crime scene and go backward to create a profile of the person who committed the crime.

In the product context, you imagine your product is successful (not a crime in any way!) and work backward to describe the type of customer that is most successful with your product and contributes the most to your company's success.

Key Components of an ICP

Before you sit down and create your ICP, you should be familiar with the various components you need. We can break down the ideal customer profile into multiple sections.

1. Demographics or Firmographics

If you are creating a profile for a person, you want to capture things like age, education, residency, gender, etc., it's essential to focus on characteristics that help you filter out the perfect customer from others and not just fill in all the properties for the sake of it.

Suppose you are creating a profile for a company. In that case, similar attributes fall in this category, like size (in terms of employees, revenue, number of people in specific roles, etc.), industry, location, years in business, and so on. Again, ask yourself - what are the things that help tell the ideal company to work with than all the others.

2. Needs and Pain Points

What does the person or company want to achieve? What are the friction points in solving that problem today? How critical is this outcome for them?

3. Behavioral Traits

Describe the buying behavior (product preferences, sales process, etc.), spending habits, and brand loyalty/vendor lockiness.

4. Customer Journey

What is the path the potential customer takes to solve the problem, and how far are they on that journey:

• Awareness: How do they discover solutions? Where do they look for relevant information?
• Consideration: What are the factors customers consider when making a buying decision?
• Decision: How is the final decision made, and what are the key stakeholders or influencers?

In a B2C context, many of these questions might be merged and blurry, while in a B2B company, they might be separate processes that take weeks and months to complete.

5. Preferred Channels and Content

What are the sources of information the customers use to inform their decisions? There are two factors to consider:

• The information medium: social media platforms, websites, blogs, user groups, etc.
• The type of information: blog posts, whitepapers, forums, videos, shorts, etc.

6. Competitive Landscape

What are the existing alternatives that the customers use today? These include:

• Direct competitors: products or services that are positioned similarly to yours.
• Indirect competitors: products or services that do not specifically target your audience, but your ICP hires them for the job-to-be-done.
• Key differentiators: what are the aspects of your product that make a difference for the ICP?

Is there a difference between a buyer persona and an ideal customer profile?

Having an Ideal Customer Profile (ICP) and a Buyer Persona can significantly enhance a business's strategic approach. While buyer personas provide detailed insights into specific types of customers, an ICP adds value by offering a broader, strategic view of the target market segments. If you want to learn more, you can go through our blog post covering the differences between ICP and Buyer Persona.

Key Benefits of Creating an ICP

A detailed description of the ideal company or person you are targeting can significantly streamline your marketing and sales efforts:

• The demographics or firmographic criteria of your target customers can be directly funneled as input criteria for your marketing campaigns. These will turn into your search filters. They can help you to narrow down the most promising leads to approach.
• Behavioral traits will inform how you structure your sales process to meet customers' expectations. Depending on your ICP, you may have to create a transactional, low-touch, one-time payment or a high-touch subscription-based sales process, for example. Picking the wrong option can put off your leads and push them to some of the alternatives.
• The customer journey, the preferred channels and content will help you understand the buying decision process. This will empower you create the environment where your customers are most predisposed to pick your product.

How to Create an Ideal Customer Profile in 5 Steps

Assuming you are working on a new product, here are the steps you need to take to build your ICP.

Step 1: Analyze Customer Problem Validation Data

Dive into all the data you have from validating the customer problem fit. Data sources might include:

• customer problem interviews that you conducted
• customer problem discovery surveys
• existing information from real-world prospects interacting with your product (i.e., from private beta release)
• other sources of information you used during your research

If you use the Icanpreneur Platform during the customer problem validation process, you will have that information neatly stored in the platform.

Separate the customers that you consider to be ideal for you based on the following criteria:

• Customer-problem fit: The customer has 100% overlap of their problem and the problem you are solving
• Customer-message fit: You are in a position to reach out to the customer through one of their preferred channels. You know that the message will resonate entirely with them.
• Problem-solution fit: The product or service you offer solves the customer’s problem beyond their expectations.

Step 2: Identify Key Attributes

Find the characteristics that distinguish the ideal customers from the others. Maybe your product appeals to companies with less than 80 employees that don't have robust IT policies yet and value supreme UX experience. Or does your product have industry-specific compliances that are dealbreakers for customers in specific verticals?

Suppose you already have a considerable amount of behavioral data from real customers' interactions with your product. In that case, this data can be analyzed using data analytics tools and techniques that find the best predictors of a particular outcome (e.g., a customer subscribing to your product).

Step 3: Evaluate the Common Customer Problems and Pain Points

Looking at the group of representatives of your ideal customer, think about common trends in their problems and pains that arise. To build a product instead of a professional service type of business, there needs to be a common problem between the customers you are addressing.

Step 4: Define Your Unique Value Proposition

Once you know the problem your customers are experiencing, describe your proposal using your product and service and show them how you can help solve it. We created a detailed article on discovering your unique value proposition, which can help you in this process.

Step 5: Create the Ideal Customer Profile

You have to pick a way to describe and communicate your ICP. There are multiple options, and you can choose the one that works best for you:

• Text document
• Visual format (image, infographic, etc.)
• Tabular format - This is suitable if you are comparing multiple profiles and have a common set of characteristics
• Slides - Ideal when you will be presenting to other people or teams in your company. It will allow you to get in more details and context.

Ideal Customer Profiles should never be put to rest. Make sure you revisit and update them regularly based on the latest information you have acquired. Many of the assumptions you made when building the profile might not turn true when you go out to test with the market, and that's expected.

Ideal Customer Profile Example

Let's examine two examples of ICP for the same company. We picked Coursera because it has multiple go-to-market strategies, including B2B and B2C customers.

ICP of a Business Customer

The first profile is of a small-business company that uses Coursera as an employee benefit.

1. Firmographics

• Company Size
  10-50 employees

• Industry
  Technology, Marketing, or Professional Services

• Location
  Urban areas in North America or Europe

• Ownership
  Privately owned, focusing on growth and employee development

• Leadership
  Forward-thinking management committed to employee retention and upskilling

2. Psychographics

• Values
  Invests in employee growth, continuous learning, and professional advancement

• Culture
  Supportive work environment, innovation, and career progression

• Interests
  Professional development, competitive edge through skill enhancement, and employee satisfaction

3. Behavior and Traits

• Decision-Making
  Founder of the company is the main driver and the sole decision maker

• Technology Usage
  Uses digital tools for employee management and development

• Employee Engagement
  Interested in tools that increase engagement and productivity through learning opportunities

• Engagement with Coursera
  Regularly explores courses and programs aligning with company goals and employee needs

4. Problem and Pains

• Skill Gaps
  Employees need upskilling to stay current with industry trends and company growth

• Retention
  Struggles with retaining talent and providing meaningful benefits

• Budget Constraints
  Needs a cost-effective employee benefit with substantial value

• Professional Growth
  Difficulty offering diverse learning opportunities within a small business budget

5. Preferred Channels and Content Types

• LinkedIn
  Success Stories and Industry Insights related to employee development and Coursera benefits.

• Email Marketing
  Newsletters featuring Course Recommendations and Updates on Employee Benefits.

• Webinars
  Live Q&A Sessions and Informative Workshops on how Coursera can be used for professional development and upskilling.

6. Unique Value Proposition

• Flexible Learning
  On-demand, flexible courses that fit employees' schedules and career goals

• Wide Range of Courses
  Diverse catalog of courses and specializations relevant to various roles

• Cost-Effective
  Affordable employee benefits with high value that support professional development

• Increased Engagement:
  Enhances employee satisfaction and retention by investing in their growth and providing career advancement opportunities

ICP of a Consumer Customer

The second example is of an individual using Coursera to acquire a master's degree for upskilling purposes.

1. Demographics

• Age
  30-40 years old

• Occupation
  Mid-level professional in the tech industry

• Residency
  Urban areas in the United States

• Education
  Bachelor's degree in a related field (e.g., Computer Science, Information Technology)

2. Psychographics

• Values and Beliefs
  Values continuous learning and personal growth, believes in the power of education to advance career prospects

• Lifestyle
  Balances a busy professional life with personal commitments, values work-life balance

• Interests and Hobbies
  Enjoys reading tech blogs, participating in coding boot camps, attending industry conferences, and engaging in online learning communities

• Personality Traits
  Ambitious, proactive, self-disciplined, and highly motivated

3. Behavior and Traits

• Learning Behavior
  Prefers flexible learning schedules that can fit around work and family commitments, enjoys self-paced courses with the option of live sessions for interaction

• Technology Usage
  Regularly uses technology for both work and personal development, comfortable with online platforms and digital tools

• Decision-Making Process
  Researches thoroughly before making a decision, values recommendations from peers and online reviews, looks for programs with strong industry recognition and accreditation

• Engagement
  Actively engages with online learning platforms, participates in forums and discussion groups, seeks feedback and networking opportunities

4. Problem and Pains

• Career Stagnation
  Feels stuck in their current role without opportunities for advancement due to lack of advanced qualifications

• Work-Life Balance
  Struggles to find time for traditional in-person education due to professional and personal responsibilities

• Financial Constraints
  Needs an affordable education option that does not require taking on significant debt or sacrificing current income

• Skill Gaps
  Recognizes the need to acquire advanced skills and knowledge to stay competitive in the rapidly evolving tech industry

5. Preferred Channels and Content Types

• LinkedIn
  How-To Guides with walkthrough instructions. Case Studies revealing industry insights.

• Email Marketing
  Newsletters with course updates and success stories.

• Webinars
  Live sessions on online education and career advancement.

6. Unique Value Proposition

• Flexibility
  Coursera offers flexible learning schedules and self-paced courses that allow individuals to balance their studies with work and family commitments.

• Affordability
  The platform provides an affordable path to a master’s degree with financial aid options and the ability to pay per course.

• Quality and Recognition
  Partners with top universities and institutions, ensuring the degree is recognized and respected within the industry.

• Career Advancement
  Coursera equips individuals with the advanced skills and knowledge to move into higher-level positions, offering specialized courses aligned with industry demands.

• Networking Opportunities
  Access to a global community of learners and professionals, offering valuable networking and collaboration opportunities.

Conclusion

By understanding your ideal customers' key attributes, pain points, and unique value propositions, you can tailor your marketing efforts to attract the right prospects. This targeted approach leads to higher conversion rates, better resource allocation, and more effective marketing strategies.

Use the five steps outlined in this guide to create your Ideal Customer Profile and target the right companies today. Remember, a well-defined ICP is a powerful tool for achieving your business goals and driving long-term success.