B2B marketing has a new hype: account-based marketing (ABM).
Before going full-steam ahead, how do you maximise your chances of success? I’ll explain how defining and validating an Ideal Customer Profile (ICP) helps you zero-in on high-priority targets, focus your retargeting efforts, and weight budgets for the biggest impact.
By reading this article, you’ll learn:
- Why the ICP principle matters for your business growth
- How to define and validate your ICP effectively
- How your ICP impacts ABM activities to achieve better results
What is an ICP and why does it matter?
ICP stands for Ideal Customer Profile. This refers to a company or organisation, rather than an individual.
Businesses have their own understanding of who they’re selling to, although this isn’t always defined. Many have a minimum customer profile (MCP). This sets the minimum criteria for an acceptable customer. What’s the difference between this and an ICP?
Let’s say a B2B SaaS vendor is targeting retailers who spend budget on search marketing. They want to target the big guns, so the MCP is all retailers spending £1 million per year on search marketing. In this case, the ICP might be retailers spending at least £15 million per year on search marketing.
Why does it matter to differentiate these two?
Because, given the difference in value between these two prospects, it doesn’t make sense to invest the same time, energy, and money on winning the contract of the £1 million spender as you would on the £15 million spender. First you need to identify the biggest opportunities, and then weight the budget (i.e. persona development, remarketing bids, content creation, outreach, etc.) on the best targets.
However, the ICP isn’t just based on which customers you “want” as a business. It is based on which businesses will genuinely get the most value from your product or service. Defining an ICP will maximise acquisition and retention efficiency, and help you reduce churn with solid B2B customers who drive long-term revenue.
As Lincoln Murphy outlines in his very robust article on ICPs, an ideal customer must be ready (have a need), willing (keen to take action), and able (have the money and authority). They must have success potential, be efficient to acquire, and ripe for expansion. And finally, they should be potential advocates for your business.
Let’s look at how to define your ICP, and then I’ll explain how to apply this knowledge in ABM.
How to define and validate your ICPs
We were recently brought in to work with a business that had problems with its marketing engine. We realised pretty quickly that there were two problems:
- They were targeting everyone without differentiating their audience
- They started marketing without validating their product’s appeal to a specific persona
It’s clear that these errors could be costly over time. But how can they be avoided?
First, you need to establish your ICP with qualitative and quantitative analysis, and stop marketing on a hunch. Here’s my step-by-step guide to defining your ICP. It’ll differ to other examples, but it works…
Note: For this process, you’ll need to use some tools. The ones mentioned in these steps are some of our favourites, but there are alternatives available.
Step 1: Identify your best current customers
It starts at home. First, it’s time to look at existing customers and pick out the best. Your “best” customers might be selected based on something like Monthly Run Rate (MRR) or Lifetime Value (LTV). You’ll have your own parameters for measuring the most valuable contracts, no doubt.
Also read: How to calculate customer LTV
Step 2: Research current customers in more depth
Next, you need to pick out the common traits in your best customers. This will inform your ICP hypotheses, and allow you to narrow your focus.
For understanding existing customer data, we use a mix of research tools. Technographic information can be uncovered using BuiltWith, which is perfectly capable, or HG Insights, which is very comprehensive and specialised in technographic audience creation. Clearbit ICP will uncover firmographic information such as geography, employee count, etc. Crunchbase will tell us more about the financials.
This can be supported with qualitative assessments, questionnaires, surveys, and conversations. The conclusions are different for each business. But the outcome must be the same: to understand as much as humanly possible about your current best customers, and know the criteria that makes them the best.
Step 3: Segment your ideal customers
It’s possible, indeed probable, that you’ll have more than one ICP. Different businesses in different industries will need your product or service for different reasons… at different stages of growth. But don’t forget: this process is about narrowing your focus. Fight off the FOMO, and try not to have more than 2-3 ICP definitions with which to move forward.
Step 4: Build a list of similar companies
Now, you have created your ICP hypothesis/es. Using the enriched data, it’s time to build a list of similar companies. There are lots of tools that will help with this, but we tend to use Clearbit Prospector. Apply the relevant filters and search to uncover a list of businesses with the same firmographics and/or technographics. You’ll need to validate your ICPs through experiments (step 6), so this list should feature between 250-500 accounts as a minimum.
If there aren’t enough companies that fit the bill at this stage, it’s time to go back and reevaluate your ICP hypotheses.
Step 5: Determine the importance of personas
Buyer personas are important, but B2B marketers can lean too heavily on them. In truth, most B2B advertising options don’t allow for persona-level targeting. Account-level is far more feasible.
Also, the persona bottleneck can prevent the agile testing of ICP hypotheses. Ultimately, you want to prove that an ICP has legs. By investing lots of time in building intricate buyer personas, you’re using time and energy that can be better spent gathering insights on ICPs via experiments.
Get the basics right: job title, seniority, and pain points. These should naturally be taken into account, especially if you define diverse ICPs. Determine whether you need to go deeper, or whether this knowledge will guide your initial experiments well enough. Usually, you’ll be looking for decision-makers and their immediate circle of team members. This is often sufficient to get started with B2B targeting.
Step 6: Validate your ICPs
This is the most critical step of the process. Once you’ve gone through the definition process, you need to validate that the ICP is legitimate. Just because you’ve defined it, doesn’t mean that they have the need state or that they’re really the most ideal customer for your product or service. So, next you need to run experiments to get more insight before you scale up activities.
These experiments can be based on snail mail, display ads, LinkedIn outreach campaigns, cold emailing, or any other appropriate tactic. Test each ICP subset for a defined timescale. We usually work on two sprints monthly, over a 90-day period. Experiments are typically based on channel prioritisation, hitting a specific enriched cohort of 250-500 accounts as a minimum.
Validation isn’t singular; the process is based on a number of “green light factors” and is ultimately at your discretion. But before scaling up resources, building detailed personas, and investing cash in lots of content and media, you should look to acquire sales-qualified leads (SQLs) and/or signed contracts from each specific ICP target. If results compare favourably against non-ICP, this is a signal to move forward.
Scaling up: How ICPs improve your ABM results
Account-based marketing is about sniping the accounts that matter. Defining and validating an ICP ensures that you can do this. But which marketing tactics does it open up for B2B organisations?
Firstly – and perhaps most simply – it allows for focused outreach. Whether it be by LinkedIn messaging or email, you’ve now got a list of ideal customers to contact; via Clearbit’s enriched data. This outreach can be conducted manually or it can be automated, depending on your resources and technology setup.
One of our clients defines their ICP as social media influencers with 100,000 Instagram followers or 500,000 YouTube subscribers. Their software is perfect for helping influencers monetise content channels. We segmented influencers who met this criteria into different publisher types, and reached out with a hyper-specific email to help them visualise the value of our client’s solution.
We didn’t look for “influencer marketing” or “social media influencer” as an interest, but we went deep into who specifically we wanted to serve, and which messages would resonate. This increased the volume of sales qualified leads (SQLs) significantly, and reduced the cost per qualified lead by 70%.
But alongside outreach, your ICP definition also feeds more advanced marketing (and remarketing) tactics…
Another Kurve client has a very clear technographic and firmographic preference. Their ideal customer is an eCommerce store built on a specific platform, selling merch in Europe and the USA only. We drive traffic through paid search, organic search, paid social, and organic social. Anonymous website visitors are automatically enriched by Clearbit, which is hooked up to Google Analytics and an audience goal.
Users who match the ICP criteria are retargeted with predefined creatives via paid social and Google Display Ads. Conversion data (sales and installs) is then used to populate lookalike audiences in Facebook, which in turn provides fresh audiences for sustainable paid traffic acquisition.
The depth and complexity of your retargeting depends on your business, audience, and resources. But ultimately, the goal is to nurture priority prospects with compelling USPs, value propositions, and offers. Creatives will direct these people back to a personalised landing page or a custom user journey.
Another cool tactic is to customise chatbot functionality. For website visitors that fit the ICP parameters, a chatbot (using Drift, for example) can automatically connect the user to a real-life account executive. Those who don’t fit the mould may get a more generic automated experience. This prioritises the team’s time, making sure that potential high-value accounts get the most attention.
ABM is about being precise, targeted, and focused. And in general, growth marketing is about doubling-down on the most efficient ways to acquire and retain customers. As marketers, we need to minimise wasted budget and zero-in on the prospects that are most valuable to our business.
ABM focuses our B2B marketing on specific accounts. These accounts should be your ideal customers. This methodical approach will ensure more effective targeting, and a better return on investment. As we’ve seen, an ICP will help specific marketing tactics, but it’s also a broader business exercise. On a higher level, it will help refine brand positioning and prioritise the focus of your sales team.
Kurve will help you define your ICP and apply this knowledge for maximum impact. If you’d like to know more about our ABM capabilities, get in touch today.
Phone: +44 207 097 5139