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Today's marketers are under immense pressure to deliver real results, but they face significant headwinds that make it more difficult than ever to build cost-effective, scalable marketing strategies tied to revenue.

For instance, customer acquisition costs (CAC) rose 60% between 2015 and 2019, and have continued to climb since then.

In addition to rising costs, Google, Apple, and Facebook have introduced new privacy changes, such as iOS 14.5's blocking of IDFA identifier in 2021 and Chrome's plan to phase out third-party cookies in 2023, making attribution and tying marketing investments to revenue more challenging.

In such an environment, marketing teams need to adjust their approach and strategy to hit their goals. Building a predictable and efficient marketing engine means lowering acquisition costs, establishing transparent systems, and orienting around metrics that are directly linked to revenue.

To do so, marketers should put their most valuable customers at the center of their work: They need a well-defined, data-driven ideal customer profile (ICP).

Let's look at how ICPs can help focus marketing programs on the customers and activities that deliver the most significant ROI.

Why Marketers Need to Develop an Ideal Customer Profile

As a refresher, an ideal customer profile is a description—or archetype—of the companies that would realize the most value from a product or solution, and in turn, become the most valuable type of customer for a business. It is defined by a combination of company attributes, such as industry, geographic location (country or region), company size (number of employees), business model (SaaS, B2B vs. B2C, etc.), estimated annual revenue, Alexa rank, and technology used (Salesforce, Marketo, Segment, Drift, etc.).

Because most companies' goals are tied to revenue, their definitions of an "ideal customer" will also often include other factors:

  • Monthly recurring revenue (MRR): Income generated each month
  • Lifetime value (LTV): A prediction of the net profit attributed to an ongoing relationship between customer and product
  • Annual contract value (ACV): The total amount of revenue from a contract over the course of a year
  • Upsell potential: Whether a customer will purchase additional offerings

In short, a fully fleshed-out ICP will help define not only which customers are a good initial fit for your product but also which are likely to produce the most revenue over time.

How an Ideal Customer Profile Can Drive Real Results for Marketers

If you are like most marketers, you have created at least a high-level view of your ICP to focus your funnel, but there's a good chance it just lives on a slide somewhere.

To realize the benefits of an ICP, marketers need to activate it across the funnel to create demand, convert intent, and prioritize pipeline. In practice, that means working with Sales and Ops to drive revenue, not just leads.

By activating your ICP across your marketing activities, you can focus on go-to-market efforts that have a high ROI, including the following:

  • Lead qualification. Adjust your lead scoring models to prioritize your ICPs. That means sending more of your ideal customers through to your sales reps so they convert more of the prospects that matter most, tracking which leads are the "best fit" for follow-on campaigns, and prioritizing leads that not only match an ICP but also demonstrate high intent. For instance, if prospects are suddenly reading about a particular product or visiting the pricing page, they are showing high intent and are more likely to convert.
  • Advertising. Change your Facebook ad targeting to focus on firmographic traits (company type, employee count, funding amount, etc.) that match your ICP, so the people seeing the ads are those that are most likely to purchase from you. That can involve using a prospect tool to import ICP lists into Facebook or using those firmographic traits to guide selections in Facebook's native targeting controls.
  • Demand generation. Try testing new experiences in content and landing pages and the info you collect on lead forms. To do so requires researching what topics an ICP cares about, developing messaging based on that information, and personalizing interactions across touchpoints. It can look like changing website calls to action and images or adding personalization to emails to cater to ICPs.
  • Product road map. Figure out the essential features a product is missing to meet the needs of your ICPs, and prioritize maintenance and improvement of the features that ICPs rely on most.

What Lies Beyond Your Current Ideal Customer Profile

Although focusing on audiences that match your ICP should be your top priority, it's also important to remember your other audiences. Yes, the ICP represents the best fit, but there will be other prospects who will also be a good fit.

To illustrate the point, picture a target with the bullseye representing your strategic ICP (or best fit). Most of your resources should be focused on those accounts; they are the ones that will provide the most value. The next ring in the target is your opportunistic ICP (or good fit). Those accounts aren't as good of a fit as those in the bullseye, but they're still worth considering if they come inbound. The key is to not invest expensive outbound resources on such accounts.

That brings us to the outer ring: the accounts you want to avoid for various reasons (they have requirements that your product doesn't satisfy, the cost of sale and service is too high, they pull you in a direction that is inconsistent with your strategy, and so on). Those accounts are, arguably, the most important to identify so you don't waste precious resources on them.

Another important consideration is that you'll need to keep your ICPs dynamic, meaning you update your ICPs, ensuring they evolve over time as you learn more about your customers and change how you define "best fit" prospects. By clearly identifying the accounts you will target and the ones you will avoid—and updating your target along the way—you can better align your go-to-market teams around the shared objective of driving more revenue.

* * *

Once you truly understand your most valuable customers (or your ICP), you can build a systematic, focused approach to reaching and closing prospects that will deliver the greatest ROI.

Gone are the days of growth at all costs: Smart marketers will let their ICP drive and focus their marketing programs, creating a better pipeline for healthier revenue and faster growth.

More Resources on Ideal Customer Profiles

Who Is Your Ideal Customer? Three Simple Ways to Find Your Target Market

What Are You Going to Do About Your Outdated B2B Buyer Personas?

How to Use Data to Reveal Your Brightest Star Customers

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image of Kevin Tate

Kevin Tate is the CMO at Clearbit, where he helps reach B2B companies that are trying to better understand their customers and optimize their digital funnel.

LinkedIn: Kevin Tate