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A Step-By-Step Guide to Creating your Ideal Customer Profile (ICP) for Your Digital Agency

If you are reading these lines, getting more clients is probably on your look. But the truth is not all clients are equal, nor are they as desirable for your business. But how to reach the right type of clients? Well, building an ideal consumer profile (ICP) helps you set clear aims and objectives and develop a right strategy that will help your business achieve its goals and target those clients that will bring the most value to your business and will help you build credibility within your sector. Sounds good right? Ok Let’s get our hands dirty.

But first What exactly is an Ideal consumer profile?

An ideal consumer profile (ICP) is description of the business, agency, or organization that gets value from your product or service, by grouping the desired characteristics of who you want your target consumer to be. It encompases aspects like industry type, size, profitability and attributes that describe who you want to do business with. It aims to identify who is most likely to become high-value customers and facilitate the segmentation of target accounts and go to market alignment.

In addition, It eases up prospecting and makes it more effective because you don’t have to evaluate every company one by one. Instead, you simply know that a company is a solid opportunity to move forward with if it matches your Ideal Customer Profile.   

Building an ICP is a complex strategic process that should be devoted effort and thought. It’s not just about profiling who you want as a consumer, but rather a process of self reflection and a revision of your current business practices to determine where you are and what you have to do to get to where you want your business to be.

Below is a step to step guide that will help you shape your ICP. Let's start:      

1. Define your product or service 

Before going on to decide who you want to sell your product or service, you need to revisit your actual offerings.

  • What does your product or service do. For example: “Our offer is developing mobile apps with premium customer care”
  • Do consumers want to purchase it?
  • How does it add value?  For example: Easy to use user interface with top-notch customer support
  • What do consumers value the most of your business? For example: Easy and interactive user experience.

If you cannot answer any of this questions you might want to go back and consider redesigning your offerings.


2. Define consumer needs

Consumers are looking for someone that can satisfy their needs. They usually know what they want, but they might not know how to get the best results.  In this way, an innovative product comes from the ability to bring consumers the right solution (and help them make the right choices) in a way that it  meets their needs (get more leads, better position themselves in the market or whatever they might be). The following might be useful things to have a look:    

  • Use available data to understand their needs. This can come from past projects, interviews with consumers, identifying a gap in the market, etc.
  • Interview consumers, ask them what problems have and what features they want.
  • How does your product satisfy their needs?
  • How is it different to other services offered in the market?
  • Research your competitors. What are people are already paying for that’s close to or tied to your product.
  • How can you add value to the current offers in the market? Why should they choose you over other service providers.

Remember that you should have an influence when clients are focusing on the wrong things. This is where you should come with alternatives that will help clients maximize value

For example Consumer Needs:

“Our customer needs a reliable developer to complete a project on time and without problems.”


3. Matching company values with consumer needs 

Consumers have different needs that might be similar amongst your potential clients. For example: a small software developer might be looking to target at clients that need a high quality website, where they can have full control, time sensitive development and redundancy.

Think about those and how you are going to deliver value in a way that satisfies those needs. Such as offering reliable development on high quality products, flexible working conditions and a great quality/price ratio. These values help the client meet their needs.

You should be concise and clear since clients usually know what they want and they are looking for a partner that deliver a solution that would meet their needs.


4. Use your existing consumer base to set base for your ideal consumer profiling 

Targeting huge accounts is something we all want to achieve. However we have to be realistic with our strategy and set attainable goals. In this way, some of your best customers might set off a good base to profile your ideal customer. Have a look at your existing consumer base and ask yourself the following questions:

  • What kind of consumers are using your product or service?
  • What’s their size?
  • Where are they located?
  • What kind of industry do they operate in?
  • What type of business they run? And what are their business’ characteristics?
  • Who are their customers?
  • How long do different types of your customers use your product or service on average?
  • What are they trying to achieve with your product or service?
  • Which of those companies would you assess as having the most success potential?

Make a list of your five best and your five worst customers and jog down aspects such as number of employees, annual revenue and psychographics (ethical and corporate values). Find common characteristics in your best customers and ask yourself if they fall into the Ideal consumer characteristic. What’s the percentage of your existing customer base that fall within the ideal range?

Based on your answers, group the ideal characteristics you want your customers to have (Size (number of employees and yearly revenue), budget, working environment, success rate, etc) Many entrepreneurs fail to be realistic when thinking about this. Focus on profiling clients that you can attainably reach to with a good objectives in mind. If you are looking for something else, rethink your product and marketing strategy to appeal to the right audience. We developed this excel template which is available for download for free.

Using your best customers to set base to profile your ideal customer might be a good idea. This is because it might help you develop a niche in your area of expertise and gain credibility within your sector. There is no point in targeting accounts that are definitely out of your reach or targeting people that are looking for something completely differently, when you are really good at something else!

5. Narrow down your geography.

No doubt that globalization is a wonderful thing as it enables you to work with people from around the world with just a click. However, different people from different places have different cultures and different ways of doing business, making some locations more desirable to do business with.

  • List those and identify ways in which people in those locations like to be approached.
  • Consider appealing to markets that are similar and can be targeted with a single marketing strategy, such as in English speaking markets in the “West” to put an example.

Tasks. Now sit down and write 1,2 or 3 detailed locations that you want to target. Those may be cities, countries or general regions. If your business relies on face to face contact you might want to narrow to a feasible location range where you can travel regularly. However if you are a digital business you might try and target a few locations that have similar characteristics.


6. Jog down any specific attributes you want in your consumer.

Businesses have different needs, desires and aspirations, which you need to be clear on in order to work towards meeting objectives. Attributes are particular characteristics a business (or a set of businesses) might have that make them desirable to work with.

Based on where you want your business to head to, you might want to look to particular characteristics you want in your clients. These might include

  • Sq ize:
    • Yearly Revenue
    • # of employees
  • Psychographic characteristics (working culture and values)
  • Success potential. This is hard to measure, but basically how based on current results you can predict how successful they can be.
  • Pain points. These are problems they are having that its hurting their business performance. For example: a bad quality website, where its hard for consumers to navigate and retrieve information.

Example: A software developer start-up, willing to cater to small to medium size firms, with a yearly revenue of more than US$ 500,000 a year. The company can develop complex user interfaces that can perform diverse analytical functions, something which less experienced firms have trouble getting right.

It is important to have these in mind so that you place your efforts in targeting desired accounts. In addition narrowing down to particular types of business might help develop that niche that we were talking about earlier and work with businesses that require similar solutions.

Also list those things in which you can deliver value to your clients in a way in which they haven’t gained it before. For example, We have a client-management system like others don’t. Or We have processes for handling Change requests effortlessly and transparently. Our Designer is top notch UX person that does big bank stuff.

7. Industry type versus type of business

When defining your attributes you need to think about at your targeting strategy. Most businesses aim to target particular industries, however you should focus more in the type of business.

This is because businesses that share a specific set of similar characteristics are likely to share similar issues and require solutions that fall into our areas of expertise. For example, an app offering car sharing rides in Sofia might require similar work than a platform connecting video creators with potential sponsors. However we want to make sure the type of company, size and budget and requirements are similar.


8. Targeting the Most valuable clients

Experts recommend that you focus on those clients that bring the most value to your business. Since these are the ones that will help you grow and drive towards meeting your business objectives. Many businesses fall into the same loop of trying to appeal to everyone, rather than building your strategy in targeting those that will help your business go where you want to go.  Targeting the right accounts in the right way makes you have a greater impact at a lower cost.

It is important to remember ICP changes over time. Although most companies build a product with a particular customer in mind, who really uses the product is not necessarily known until it is released. It can be surprising. Therefore, it is important to refresh your ICP test hypothesis about your audience, identify trends and expand into new market segments.

Finally, it is important to clarify that there is no universal definition on how to build an ICP since it is based on your individual bases on what is best for your business and different people say you should include different things. But in order to keep things nice and easy here is a template we used for our sister company Hakomo, a premium software developer; tweaking some of the things above based on the characteristics of our business. You can do that too!


9. Example: Hakomo’s ICP

Client Needs

  • Reliable Development
  • Trustworthy technological partner
  • Consulting on Technical matters - teach you
  • Quality/Details/Design
  • Quality/Price ratio
  • Flexible, agile, no locking contracts
  • Full control
  • Security - computers, code, development
  • Time-sensitive development
  • Redundancy

General Characteristics

  • Industry (if relevant): We can serve anyone, but would prefer RE-related or Financial.
  • Size (people): 20< people
  • Yearly Revenue: > 4M
  • Profitability: 1M net profit
  • start product from scratch
  • Project management at our side
  • Long term deal (min 6 months, ideally no end)
  • They pay regularly (every month)
  • Pay invoices timely (ideally 10d, max 30d)

Attributes 

  • Connected & Willing to recommend
  • Flexible Thinking
  • Ethical (payments, no fights, no contract fuckups)
  • Time to closing - Be ready to close
  • Bad Current Situation - bad w or apps, no such
  • Be Willing to solve the problem
  • Able to solve problem

Geography 

  • Us: NY, SF
  • Uk: London
  • Nordic Countries
  • Western Europe

Channels

  • Google Adsense,
  • Paid promotions through social media
  • Blog posts (and content sharing through social media channels) 
  • networking, attending events and conferences 
  • referrals and connections 

We hope these guidelines help you get a clear idea on what you should include when building an ICP and that this helps you develop a niche, target the right accounts and grow your reach.     

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