#48: Redefining ICP: The Real Deal

Master go-to-market strategies by redefining your Ideal Customer Profile (ICP). Our latest episode challenges the traditional approaches to ICP and reveals how a nuanced understanding can transform your business success. With insights from industry professionals, we promise you’ll learn the importance of precise ICP alignment and how it serves as the backbone for effective market engagement. We introduce our GTM Pro Accelerator process, a powerful tool designed to fill the gaps in your current ICP strategy, ensuring your company targets the right audience with laser-focused precision.

Chapters

• 0:01 Importance of Ideal Customer Profile
• 7:32 Elements of Ideal Customer Profile
• 22:49 Developing and Implementing Ideal Customer Profiles

Transcript

Gary: 0:01

Welcome back pros, all right, okay, so we're going to talk about something near and dear to our hearts and happening in real time, and that is ideal customer profile. No, no eye rolling, this is the real deal is literally in the last 24 to 36 hours we've had completely random touch points or feedback on the importance of ideal customer profile, which, of course, we agree with. But one of them recently, a private equity group with which we work one of the partners in two situations has been pulled into more of a go-to-market function to step into the portfolio company and has been spending a lot of time there and recently responded as we were reaching out to see how things were going. He said I now understand why you guys spend so much time on ideal customer profile up front. It is literally everything. Another one Like it is literally everything. Another one literally. Also yesterday, connecting with a friend, a guy who has had several successful exits started a business, joined another one recently, private equity backed, recently had an exit and is now working with another set of investors to do their own investing. But a big part of that investment is helping management teams understand and he would call it around alignment, but he literally has said that alignment around ideal customer profile is critical.

Gary: 1:44

If you don't have it, everything else is harder, and we just this morning had a conversation with another prospective portfolio company where we reiterated that as well. As they're talking about what about other markets and new markets? And everything that you do and go to market hangs off of a solid ideal customer profile. I don't think anybody would really disagree with that.

Gary: 2:05

The challenge is, everybody thinks they have it and when put under the microscope of what that really means for those that are intellectually honest, there is a realization that actually maybe we don't have this. So the purpose of this conversation is to put some meat on how does one get to a rigorously defined ideal customer profile, and we we will go so far as to completely dismantle the portfolio, the customer portfolio to segment. That doesn't necessarily require that. So we're going to show you a shortcut to that that we're using in our um, what we call our GTM pro accelerator process. We're going to share that and talk through it, and this is something that you could use in your own company and actually do it pretty quickly. Um, so we'll dive into that process.

Andy: 2:58

We will actually share the questions that we have for that as well, so that you can see the beginning point, and then we'll talk through how that matriculates into some of these other steps, so that you can you can you know at least reverse engineer some of what we did and see how that might pertain to what you're doing.

Gary: 3:19

Yes, exactly. So let's see with that in mind. Uh, we'll go over here real quick the reason that ideal customer profile is so important and most of the time that we see, if you go Google it, look at it, there's. There are finished products, there are matrices, there are templates you can fill out, and a lot of times what happens is we fill those out with, honestly, without the rigor and and it's it's only as and. Then you fill it out and great, okay, now we have it. Now what?

Gary: 3:49

And the point is that, especially for companies in the lower middle market, the degree of specificity that is required in order for us to make sure that we are prioritizing our actions and aligning our resources appropriately is is intense.

Gary: 4:04

We need to be very specific so that we can do that and do that well. So to Andy's point one of the ways that we start that we would recommend is really to survey your team. There's a series of questions we can provide you these some will use here, but survey your team and ask them some questions, especially those that are selling, but certainly from a marketing perspective, a product perspective, a customer success perspective. Getting this multimodal feedback, if you will, is really helpful for two reasons One they are interacting with the customer on the front lines, so we'll be able to get some nuance that we wouldn't otherwise get if we boil it up at a high level, having a bunch of smart people sitting in a room sharing their opinions. And the other is that you will also see in the nuance the diversity of views, which isn't necessarily a good thing, because therein lies the challenge of getting to a tightly defined ideal customer profile.

Andy: 5:04

Because therein lies the challenge of getting to a tightly defined ideal customer profile.

Andy: 5:07

Yeah, normally what we see in asking people about their ICP and that's a great place to start is kind of the firmographic view, kind of the standard like they are in this industry. They're this big, they have this many employees, this much revenue and so on. And then oftentimes what accompanies that is this notion of buyer personas. So that's typically the starting point, the buyer personas often being a fictitious view of a set of individuals who might be these buyers that have this problem that this product solves, and it kind of goes through like their bio, what they might look like literally if you walk by them on the street. Just a standard, you know that's a standard practice. We kind of flipped that on its ear where we still want to hear about the buying group. That's very important.

Andy: 5:59

But to Gary's point, when we ask these questions and you know, just having had a rep at this, a repetition of this we find that there is a great diversity of responses. But it's really how you interpret that. There's almost a layer down from what you hear and tuning in it's like tuning a radio into the frequency of what does that mean across the board? So when you hear something that may be said slightly different by, say, three different people answering a question. They are all saying the same thing there, and that's probably what we want to unpack a little bit here too.

Gary: 6:36

Yep, exactly. So, with that in mind, let's start with a few questions, and this is around the ideal customer profile. I'm not going to go through all of these, but this is a good one with which to start, and one of the important things that we try to do is ask it in a colloquial way, like not in an academic way, but just what are you feeling? So the first question we typically ask is, when talking to customers, what attributes, structure, situations, et cetera excite you because you know your solution is a fit and the timing is right. And so, when asked specifically to salespeople, that question enables them to channel situations they've recently had where they know oh, when I hear this, this and this, I know I'm going to be in a good spot.

Gary: 7:23

Like there's not going to be a lot of friction. They they quote get it. Yeah, that it's important to them and it's not a bad thing. But you'll mix and match signals from the individual buyer, the company dynamics, what solution they're using or not using, how advanced they may be. You know the level of importance that is perceived. Like you're kind of mixing and matching all of these things that are important in terms of a buyer making a decision and you're going to get it all in one answer.

Andy: 7:58

You want to get them talking about scenarios exactly what Gary just said. Sometimes those map to a use case. They definitely have those different attributes. They're talking about sometimes firmographics. They're talking about sometimes the buyer itself. They're sometimes talking about problems. They're sometimes talking about problems and impacts or negative impacts that something's having.

Gary: 8:22

That is the problem with most ICP processes is we go to the template and we're like here, fill in the template and if you don't just let them go, just you, you force a stream of thought that doesn't exist. They don't think that way. They're there, it's. It's much easier to have them live an experience and, and, almost like a documentary, just just play back the experience for me, what did you see and hear and and what did it look like and what are you looking for? Then we can take that.

Gary: 8:54

And that's the hard part actually is then taking that and putting it into some form of structure.

Gary: 8:58

And I think related to that actually is skipping around a little bit is then we always start with that question but then asking them okay, so now name some customers that you feel fit, that dynamic that are, the ICP attributes, that that you that are, that are ideal, whether it was the situation, whether it was the company, the buyer, whatever, whatever it was like, name a few situations and then also with prospects, and the reason we ask it at that point is that now we're starting to bring form in their minds around.

Gary: 9:34

What does that look like, like, what does good look like? And it's much easier to think about a specific company or a specific situation that you just got done describing versus doing it in the abstract. So that's I mean honestly from a company perspective. There's not much more to ask there because it's such an open-ended question by design that, to Andy's point, it does require a secondary amount of work to then parse through. What does all that mean? Like what is company, what is buyer, what is problem? But you get a lot of that and there's not much more to do from a company perspective.

Andy: 10:13

Yeah, I mean we try to categorize the problems in that manner, right. So the ideal customer profile, that's obviously a set of questions that that is what we're trying to get the responder to get rolling on. But to Gary's point a lot is often discussed there. It's not just the ideal customer could have a lot of different elements to it. Similar with the buyer role that's a set of questions focusing on the champion that you would be speaking with in a sales process. But again, in asking those things, you get other elements being discussed as well. All very healthy, all very good. Similar with the problem statement right, it is interesting.

Gary: 11:03

It is interesting how it all intermingles right. When we talk about ideal and this is why it's so important we talk about ideal, customer profile, and you bring it down to the ground level, where the teams are interacting with customers whether they're ideal or not or prospective customers, they will mix together an individual, a department, a company, a current solution, a problem that they're having, because to them, all of those ingredients come together to in their mind like okay, when I see this basket of variables, I know that this is going to be a good deal, I'm going to be able to. My probability of success goes up, I know it's going to be a good fit, I know it's going to retain, like all of that. And so to Andy's point. That's why we then go into the buyer role, which is around the champion, which is now describing them like what is the common job title? What is they responsible for? How are they measured? You know, what external departments are they dependent on in order to be success? And part of now we're starting to get into is not just the dynamics of what this role is, but also what is required for success, like if we were going to come in and implement in this manner and they're reliant on these other departments. It could very well be that we are now reliant on those other departments and getting some visibility on that.

Gary: 12:26

That actually informs part of the sales process. A big one is external factors that are making their job harder. There's changes in technology, there's changes in market forces, there's changes in their competition, all of which are making their job harder, which is really important to know because that is a contributor to the pain. And then we actually have a couple of questions that we've asked in the past that we're probably not going to ask go forward because they're too nebulous. But you know, one of them is we're going to modify a little bit. What are they afraid of? Right, and this is where we get.

Gary: 13:06

This is why, ultimately, where ICP is manifests itself very quickly is in the process of discovery, and one of the most important aspects of discovery is to understand where the buyer is on the spectrum of getting to a confident decision.

Gary: 13:23

And so we need to understand what is happening in their organization, where some champions are very confident and some are less so.

Gary: 13:36

And so what are those conditions that we can understand that, but still, in this case we get another to Andy's point you'll get a mix of problem and pain and impact and individual characteristics and department dynamics and company dynamics by asking even those questions, because for most people on the front line it is, you know, the ideal customer is situational right and what we're trying to separate is there are attributes of a company that, regardless of the timing or situation, it's a matter of when, not if, we believe they can implement our solution because of the, because of the just the inherent dynamics of the company and the department and the team structure and the importance of our, of what they're trying to accomplish and how we can, how we can fit that.

Gary: 14:37

But not every company is going to be in a position, there's not going to be a critical event that's causing them to be in market. So that's where we start to layer in the timing aspect of it and we you'll often see people, specifically sellers and to some extent, customer success, especially if they're responsible for expansion that will lump in timing into ideal customer profile. Do the circumstances exist that allow us to go? Do that? Those are actually two separate things, because what we want to understand from a marketing perspective is we may not be able to see the circumstances or the timing of it. We can certainly speak to it, but we very clearly know which companies we need to go after, or even which departments or people at those companies, and that's what we want to try to separate here.

Andy: 15:29

Yeah, that's the thing I mean. It's almost like there's structure in how to ask these things. The responses are unstructured and you need to reconstruct that.

Gary: 15:41

I like that.

Andy: 15:45

That's kind of seemingly the process right. And then there's, to your point, there's also some just elements of that that are naturally going to be more structured. So like the nature of a company, the nature of those elements of firmographics, to some extent a buying process is going to have a lot of consistency to it. Where someone is, their level of experience is going to vary, but when you're mapping just like who's a good customer and then how do you sell to them, there's going to be consistency there.

Gary: 16:27

So it's kind of trying to take nebulous answers and reapply it. We see that's pretty common is seemingly structured responses that actually aren't when you peel them back a little bit. A great example is large enterprise. What does that mean? It's in the eye of the beholder. Or a great one is financial services in the eye of the beholder. Or a great one is financial services. What does? Are we talking about a 50 person regional insurance brokerage firm or are we talking about a global, you know, hundred thousand person financial advisory firm? They're both financial services, right.

Gary: 17:11

So that's when we get those answers that's, that's the, that's the next layer down, which is for and it's really important that we do that and and have some the ability to then support it across your sales team. That's not a bad thing because it actually reveals like we don't actually know or we have multiple potential product market fit, but now we need to go look at, well, how do they retain and expand and what's the cost to acquire those? So a lot of times or?

Andy: 17:47

disagreement on vertical. Right To your point.

Andy: 17:50

Disagreement on vertical might mean that the real reason is a layer deeper, right, we call like level one, which would be observable versus the less observable, that something in the use case has a commonality to it that cuts across those verticals. So people are like, yep, this is my vertical. But really, when they see, when they get excited, so that's that's the question we ask right, when you get excited, they actually it isn't the vertical, it's something a layer deeper that they see, or that they suspect, because, because of the way that you know, because of the industry, that, um, prospects in that, that that's what they're really getting excited about, right, and that's what? That that's what needs to be teased out.

Gary: 18:39

And and that is important for two reasons. One, um, the the reason we separate those attributes into observable and, you know, non-observable, if you will, or dynamics, is clearly the observable. We can go out and use a variety of data sources or processes, or proxies to those, to proactively identify which companies meet these attributes Right. And then, even at the department level, there's some observable department level things that we can look at as well. Do they or do they not have an HR department? Do they have at least five people in that department, right? Whatever those dynamics can be?

Gary: 19:21

But, to Andy's point, the real power in understanding fit is in the stuff that is often not observable. That requires a conversation, which is where discovery comes in. Having said that, the discovery conversation, when we list out those non-observable attributes or the dynamics around the company, around the department and the interaction of the department with other departments in the company, the thing that they're trying to accomplish, the job to be done, and then what it is they're using today or what is their existing process, those kind of four things come together to create the dynamics, become a standard by which our team in discovery can compare against. Like, how to think of it as a spectrum, how do you map up against these things and I begin to understand how great of a fit you are. And I begin to understand how great of a fit you are. It also is an amazing source of information for our mid to low funnel marketing information, because we are describing those situations and that's where we build really powerful use cases and case studies around that.

Andy: 20:31

Because they're inextricably intertwined. The problem you solve equates to your ideal customer, so like they're one in the same, you started talking about another thing that we like to affectionately refer to as fishing with the right lure. Right so in the bottom of the funnel, that problem solved for that specific ideal customer. If you speak to that through use cases and case studies and speak very specifically about how that problem is solved for somebody in their situation, that's kind of fishing with the right lure and that, you know, given the right context, given the right depth and clarity with which you convey that, and in the right venue, can really get somebody over the over the fence of um, you know, being in your prospect pool versus now they're an option.

Gary: 21:26

Andy, you brought up a really good point, which is that the conditions and the problem are inextricably linked. The conditions are what create the problem right, and so that's why understanding those conditions is so important is that, if you think about it from a discovery standpoint again, we're giving our team of particularly sellers, but in every case, a rubric by which to assess a fit on conditions. And if I do that and I see a really tight fit, I can actually predict the problems that they're likely to have and therefore be more advisory in our discussion. You know, you're probably, when we talk to companies that have these dynamics, they're probably feeling these things, and that is a major aspect of getting to decision. Confidence is you're actually helping them better define the problem. They may be coming to you with symptoms and we need to unveil it and say, well, this is really what's going on under the hood and this is why you're having those issues, and that's obviously how we can connect our product to the problem and that's where impact is created. And also the aspect of fishing with the right lure. Now we're in a situation where we can, from a marketing perspective, you think about it in a use case, case data. What have you? We can describe those conditions Like there are a company in, and it doesn't necessarily even need to be by industry.

Gary: 22:49

There are a company that have a distributed workforce that this department is responsible for supporting them here, here and here. They have this number of installed devices and they have this technology stack, and the combination of things are creating these problems that they need to manage too. Then we can go into the various ways that they're solving those problems. What's the solution? Landscape and all of those fall short in some way, and here's how we come together to fix those. That's far more powerful than here's a logo. That did this thing and you know they implemented our solution and got a 30% X. It's like, well, because you went from, they had a problem and they got an outcome. You didn't tell me how they got there. Right, huge difference, and that's a huge difference, and that's why, when we go through the process of these dynamics, you can see how it trickles down to so many other components of the go-to-market engine.

Andy: 23:45

Yeah, and we and like we think that's at a premium now more than ever, going from. You know we do this thing and somebody got XYZ ROI 10X time save whatever. We see a lot of time savings Versus the process, the scenario walking people through. That.

Gary: 24:06

That makes a big difference and we think that's making an even bigger difference nowadays more than ever yeah, well, because the risk appetite to try new things is lower than it's ever been, the risk of doing that is higher than ever, and because in so many cases there, these are not discrete little systems. They're all interconnected, and so the tolerance for a project not working is lower than it's ever been, and so it's therefore in order for me to get to some degree of confidence. I need to see not just is the product going to work, yes or no, but what went into the process of getting from A to B. How did I get my team ready? How do I implement? What does the data implementation or integration process actually look like? And a lot of times we leave that too much of a mystery.

Andy: 25:01

Yeah, and that's the two for one. In describing the core problem, the better description you get on the core problem, you obviously can apply that to your ICP, but it has huge implications on go-to-market, as you can imagine.

Gary: 25:16

Yeah. So once we have these attributes that we walk through and again, we don't want to gloss over that it does take work to do this right. It's one thing to get people's feedback on it, and one thing we don't necessarily want to. Well, we definitely do not want to do this right. It's one thing to get people's feedback on it, and one thing we don't necessarily want to. What we definitely do not want to do is have, as we often say, an ICP formed on weak data and strong opinions. But in the absence of a full teardown of the portfolio and looking at acquisition costs and retention patterns and expansion and expansion, things like that costs and retention patterns and expansion and expansion, things like that you can very quickly get a long way down the road on at least getting to a common understanding of what that is through this process. But once you get these unstructured responses, it takes work from someone the team, perhaps in product marketing, perhaps your revenue leader, perhaps a sales leader to take these unstructured responses and put some structure to them, to get to a set of attributes that make sense, right? So if we say industry financial services as an example is not an acceptable answer, right? We need to be more specific than that. But what we then do is, with these attributes we've defined what they are. Now, instead of just having a one answer, we actually put them into zones and the three zones are a great way to think about it as really our primary target, and this is the thing on which our whole company is going to be focused. And from our perspective, if you think about the dynamics, the company, our product, is literally built to solve problems for these kinds of companies, these situations. That's our target. It's a matter of when, not if right, when, they can use our, so that, taking the timing thing out of it, but if you look like this, then it's just a matter of time. You should be using our solution. Then there's the middle bucket, the B grade, if you will.

Gary: 27:18

That's opportunistic and that is there. There's something that isn't a great fit. Maybe it's a tangential industry, maybe it's a little bit too big, um, maybe the department structure is a little bit different, but there's something in there that you know, if I have a strong champion and I have this, you know this, this, this problem to impact connection that, then maybe that makes sense and we can use that, but we're not going to actually devote our revenue engine to go get those situations right. That's more opportunistic. And then, equally importantly, that almost nobody does is what are we going to say no to? And that is so important because we can't necessarily control what comes into our engine, whether it's through outbound or inbound or what have you. And if?

Gary: 28:09

If that ends up in our process, we could very easily burn a lot of calories from a sales perspective because, let's face it, all revenue is good revenue when you're trying to meet your quota and but then we're going to pay the price. The price because it's going to contort us from a process perspective. Those are the ones that are typically the most difficult. The minute they go to onboarding. They're going to be the noisiest, the loudest, the retention profile is horrific. They chew up a lot of resources. We're just better off saying no to that.

Gary: 28:41

So we need to know that before we get into the process, because if we, for whatever reason, have a mismatch between the message we're sending out into the market and what we want to see, and we're seeing more of those come through and we see win rates decline, then the knee jerk reaction is to look to the individual sellers.

Gary: 29:02

I'm like, well, what's going on there. Why is the win rate declining? Well, if it's declining because we're seeing a bunch of C grade stuff come in, I'm like, well, that's, that's not a seller problem. They're actually doing what they're supposed to be doing, which is not spending time there. So that's why the, the gradients, if you will, the ICP, are so important. And again, it doesn't necessarily require a robust analysis of the portfolio, but it does require some intellectual honesty in terms of where that really, and most of the time you need somebody on the team or a third party like us to be a moderator, to call you out on it and say hold on, we're getting too broad here. Because that is the biggest risk we have is, the more we open the aperture, the more watered down everything else becomes, the less impact it has out on the market.

Andy: 30:04

And we've said that before that that's pretty common with founders to want to be a lot of things to a lot of people, to a lot of companies, right Like we solve all these things, and that's oftentimes reflected on the product roadmap a little bit and certainly reflected in a company's homepage, for example. We do these things. It's a pretty broad statement. The know the headline on that homepage tries to cater to a broad swath and that's something we would. You know. We implore people to avoid that temptation to try and be more specific about who and what in that context.

Gary: 30:47

And probably part of the reason that ICP-like projects either stay confined to a department level or really never get off the ground to begin with is that they often end there. They end with a document that says this is our ICP and we're supposed to reference it from there, and then everybody goes back to their day job and we forget about it. So that is what you know. The next step, then, is to find a place where you can operationalize this. One of the things that we do at Yield Group through GTM Pro is one of the best places we see this being able to put to work is actually in your discovery process, because your discovery process with that lens actually tells you what is the fit, what is the buyer's level of confidence, what are the situations, what is the you know who are the players involved. It actually helps us very smartly move forward in the sales process proactively, more as a buyer advocate, a buyer enabler of the buyer, than as a seller, and so that's where we spend time. But you could easily spend time on. Let's talk about what our set of low funnel marketing content is going to be around this. Uh, what is our you know set of campaigns going to be around this. What? How does this affect onboarding for customer success? But find a place to put this to work, because then, and only then, does it start to actually have an impact on your business, versus just hey, this is a great process. We have clarity here, because the reality is your team is going to, your team is undergoing a constant state of change. Right, the we're going to have some people leave, we're going to have new people come in. Things are going to change in the world and the market and people are going to just naturally drift away from these things if it's not front and center in the middle of your revenue engine all the time. So find a place to put it to work. So there you have it Ideal customer profile in three easy steps. No, it's not that easy, but we will share. So we're pulling these kind of resources together. So stay tuned. Um, actually, on GTM pro, we're going to open source all of this through through this process. It is it is not yet ready for prime time, um, in terms of you know, uh, kind of the do it yourself approach, but um, we will share some of these resources and uh, this is absolutely something you can walk through on your own and that this was intended to be a guide around that. So I hope you found it helpful.

Gary: 33:44

Again, it's easy to get lost in what seems to be a theoretical exercise in ideal customer profile, but it really is the. We say this over and over again it is the keystone of go to market. So if you think about the curved bridge, the keystone is the stone right, smack dab in the middle that keeps the whole thing standing up, both from one side coming, so the think about it, from awareness all the way through demand capture, from, uh, from the discovery process all the way through. You know that ideal customer profile sets the middle of that and informs everything. So you know, move forward with a scientific approach and again, it doesn't have to be drowning in data to do this and get started and do it well, and there you go. Hey, next week we're really excited about this. So we've talked about this before. We've been spending some time Speaking of discovery, we've been spending some time in the buyer enablement slash digital sales room space and very quickly discovered that there are a lot of different approaches here, especially with AI.

Gary: 34:57

With AI, and the reason we latched onto this is that this is the vehicle that a sound discovery process actually takes life for the buyer right. We often refer to a discovery process where we're capturing that information and then we're sticking it into fields in our CRM, but that doesn't necessarily help the buyer. Well, there's a big movement right now and it's been underway for a while, but it's really started to reach a groundswell, largely because of the way the buying process has changed is to flip it outside in and actually help the buyer buy. And the discovery, the discovery process, is a key. That's where the rubber meets the road in terms of making that happen. So we're going to spend some time exploring a space with some founders who have been working in this space for a long time and have a variety of different approaches, and that's going to start next week. So we're really excited about that. So stay tuned. So we'll see you back next week. By the way, today is Halloween. Happy Halloween, enjoy, stay safe until next week. Go be a pro Bye.