One of the biggest mistakes companies can make is to try and be all things to all people, going after all possible customers out of fear to miss out on revenue opportunities. Among all possible prospects, some companies are a better fit for a vendor's solution and have more to gain by purchasing it than other customers. They are more likely to pay a premium and prefer the vendor over less ideal competitors. This translates into higher closing rates and higher lifetime customer value. The increase in revenue from focusing on ideal target segments often far outweighs the loss in revenue from abandoning less ideal segments.
But how do you identify your ideal customers? The concept of the Ideal Customer Profile (ICP) is designed to help marketers identify the attributes ideal customers have in common that separate them from other less profitable segments. Attributes used for segmentation include demographics such as industry and company size, psychological characteristics such as technology adoption patterns (innovators, early adopters, early majority, etc.) as well as trigger events such as the hire of a new chief executive or approaching compliance deadlines for regulatory legislation. In part 3 of his lead generation checklist, Brian Carroll explains how to develop and itensify your ideal customer profile. Check it out.
