Imagine two AI-first companies founded within the last five years but with starkly different approaches to their market. One has a broad Ideal Customer Profile and Ideal Customer Person (ICP and ICp) while the other has a tight focus.

Company A takes a “horizontal” approach. They believe their AI solution can benefit every large enterprise, targeting HR departments across various industries. Their persona is broad – any HR professional in any large company. This wide net seems promising at first, but it comes with challenges. While they’re landing some sales, their product requirements have become vast and scattered. Their win rate for prospects is under 10%, as they struggle to meet the diverse needs of different industries and company sizes.

In contrast, Company B has laser-focused on a specific function: sales. They sell directly to Sales Leaders in larger tech companies who are looking to improve their outbound win rates. Their product development is sharply focused on improving prospecting success, with integrations specifically designed for the tech stack of larger tech companies. The result? A win rate of over 25% – more than double that of Company A.

This tale of two AI companies illustrates a crucial lesson in the B2B tech world: the power of focus. By honing in on a specific Ideal Customer Profile (ICP) and Ideal Customer Persona (ICp), Company B has set itself up for more efficient growth and higher success rates.

 

Defining the Power Duo

Ideal Customer Profile (ICP) and Ideal Customer Persona (ICp)

Your ICP is the type of organization that’s the perfect fit for your solution. It’s the company that not only needs what you’re offering but also has the potential to become your best, most profitable customer.

The ICp, on the other hand, is your champion within that organization. This is the individual who not only sees the value in your solution but also has the capacity to drive decisions relatively quickly. They’re your internal advocate, the person who will champion your cause and push for adoption.

Together, ICP and ICp form a powerful combination that can supercharge your go-to-market strategy.

Why ICP and ICp Matter

Defining your ICP and ICp isn’t just a nice-to-have exercise – it’s critical for your success. Here’s why:

  1. Focused resource allocation: By knowing exactly who you’re targeting, you can allocate your limited resources more effectively.
  2. Improved product-market fit: Understanding your ideal customers helps you refine your product to meet their specific needs.
  3. Low or no friction customer discovery and acquisition integrated into your solution
  4. Enhanced marketing and sales efficiency: Targeted messaging resonates better, leading to higher conversion rates.
  5. Accelerated sales cycles: When you’re talking to the right person in the right organization, deals move faster.

Key Components of an Effective ICP

Your ICP should include, in prioritized emphasis, specifics about the following attributes of an organization:

  • Company size (revenue, employees)
  • Industry or vertical
  • Geographic location
  • Technology stack or infrastructure
  • Business model (B2B, B2C, etc.)
  • Growth stage or maturity
  • Budget or spending patterns
  • Organizational structure
  • Key business challenges or pain points
  • Regulatory or compliance requirements
  • Decision-making process
  • Existing solutions or alternatives in use

Key Components of a Quality ICp (Persona)

Your ICp should include, in prioritized emphasis, specifics about the following attributes of an individual person:

  • Demographics (age, gender, education, job title)
  • Role and responsibilities
  • Career goals and aspirations
  • Daily tasks and challenges
  • Decision-making authority
  • Information sources and preferences
  • Communication style and channels
  • Personal and professional motivations
  • Pain points and frustrations
  • Success metrics
  • Objections or concerns
  • Psychological attributes (risk tolerance, innovativeness)

Two Approaches to Focusing Your ICP and ICp

The choice depends on your product, your team’s expertise, and your market opportunities.

Market Driven ICP

Choose the biggest interesting market with a pressing problem you can solve 10x better.

Differentiation Driven ICP

Identify your unique capabilities and find a big enough market with a top-three problem you have a 10x better way to solve.

Success Stories: ICP and ICp in Action

Let’s look at some real-world examples:

  1. GitHub focused exclusively on the open source developer and their team’s need to easily check in and share code.
  2. Salesforce.com initially targeted sales leaders in smaller companies who needed a fast way to capture contacts in their pipeline and track opportunities to project revenues – when Siebel was too cumbersome and expensive to implement.
  3. Gainsight targeted the emerging leader of Customer Success for SaaS companies, recognizing that customer churn was kryptonite for SaaS companies with high acquisition costs.
  4. Marketo focused on the marketing operations person, building a strong community of marketing automation/marketing ops leaders.
  5. Clari targeted the emerging RevOps executive who needed better pipeline visibility and predictability.

The Criticality of Nailing the Specific User Persona

Developing an accurate ICp is crucial but challenging. It requires genuine prospect research to understand their priorities, ambitions, and concerns. Remember, it’s much easier to serve a persona you’ve been or know well, but be aware that your experience may not be the norm.

Efficient persona development techniques include prospect interviews, AI for synthetic profiles, generating targeted content, and creating interactive experiences such as roundtables, surveys, and quizzes to test interest and volume. Small events where prospects learn from you and can elect to go further as detailed in Oversubscribed, also help focus your ICP and ICp.

The key is to go slow to go fast. Develop a clear understanding of the persona and their top problems so that you can create a hypothetical value proposition to test. If it resonates (for example, if you sign a design partner), build the solution that differentiates you and solves the problem as it will evolve.

In the initial stage of a company or product, focus on one persona. This allows you to create a 10x solution to their problem, delight your customers, turn them into passionate advocates, and maximize customer acquisition efficiency. Adding a second persona has exponential costs throughout your organization.

When crafting your message, remember: keep it simple. Your message must be something your persona can easily repeat convincingly to others in their organization – the need and why your solution is the best.

Common Pitfalls to Avoid with ICP and ICp

When developing your ICP and ICp, watch out for these common mistakes:

  1. Fear of choosing: Not choosing is guaranteed failure. Choose, test, and adjust based on feedback.
  2. Misunderstanding buyer awareness: Buyers often don’t know they want something until they see it’s possible.
  3. Self-projection bias: Unless you represent the ICP and there are many buyers just like you, don’t assume you are your ICP.
  4. Overestimating buyer motivation: Buyers usually don’t want to buy something; they want to solve problems with minimal friction.
  5. Neglecting decision-making speed in ICp selection: Your champion needs to be able to drive decisions relatively quickly.

Tools and Resources

To help you develop your ICP and ICp, consider these resources:

  1. Disciplined Entrepreneurship” by Bill Aulet
  2. “The Mom Test” by Rob Fitzpatrick – this is my favorite basis for prospect discovery
  3. The GTM Flow Bullseye Method (see below)

The GTM Flow Bullseye Framework

The Bullseye Framework is particularly useful for ICP development:

  • History: Analyze past successful customers and their buying triggers
  • Alternatives: Understand the competitive landscape and your unique value proposition
  • Motivations: Identify buyer drivers and journey (consider the Gartner B2B Buying Journey)
  • Capability: Define organizational requirements and decision-making processes
  • Volume: Assess market size and growth potential

Expanding Beyond the Initial ICP and ICp

You may need to expand once you’ve gained momentum and success with your initial persona. Consider adjacencies that are influenced by and share needs and urgency like your original persona. This expansion should be deliberate within your existing customers and into adjacent markets.

Conclusion

Defining your ICP and ICp is not just an academic exercise – it’s a critical step in driving your B2B tech company’s success. By focusing your efforts on the right organizations and the right champions within them, you can accelerate your growth, improve your product-market fit, and increase your overall efficiency.

Remember: go slow to go fast. Invest the time to understand your ideal customers and their needs truly. Your future success depends on it.

Ready to define your power duo? Start by listing your most successful customers and identifying what makes them ideal. Your journey to more focused, efficient growth starts now.

Written in collaboration with Claude.ai 3.5 Sonnet. GTM Flow may generate affiliate revenues from links.