Joe is newly single. He met his last girlfriend on an online dating site. So, he resurrected his ad, and the new quest began.
Except it was so much harder! He had plenty of dates; he just couldn’t quite connect with anyone. They were nice enough and pretty enough, but there was no chemistry. Like when he raved about his favorite musicians — Jane’s Addiction, Cake and Liz Phair — all of his potential sweethearts stared blankly.
“Uh, who?” they queried.
The problem was that Joe hadn’t been online since 2002, and he didn’t change what he was looking for since then, either. The women he really would have connected with were older, and maybe even divorced.
Joe’s market is no longer never-married and 21, even though he thought it was.
It’s Q4, do you know who your market is?
So it is with your marketplace. Nothing remains stagnant. That’s why it’s critical to make sure your market is still who you think it is.
How do you do this? Through developing an Ideal Customer Profile (ICP) and updating it at least every six months. An ICP is the foundation of your entire lead generation program. It enables you, through database analysis, to identify the people and businesses that will benefit your organization the most. It helps you narrow your lead generation universe and provide a standard against which you can prescreen opportunities.
Here are the steps to developing an ICP:
- Identify your five best customers
- Those who provide the most revenue and profit
- Those who are delightful to do business with
- Identify your five worst customers
- Those who give you the least revenue and profit
- Those who are challenging to do business with
- Create profiles for each and populate them with:
- Their SIC (Standard Industrial Classification) and/or NAICS (North American Industrial Classification) codes
- Annual revenue
- Number of employees
- The positions and roles of your key contacts
- The scope of the organization – local, regional, national, global
- Their business situation – are they a startup, mature, in growth or decline?
- Internal/and external factors affecting the company
- Psychographics, such as corporate values, culture and philosophy
- Trigger events that attracted them into your database in the first place.
Common trigger events include changes in:
- Buying processes, influencing roles and decision-making roles
- Analyze what they have in common:
- Your worst customers should look completely different than your best
- You should see a distinct picture of where your target market lies
Data analysis = Truth
Everyone has an opinion, which may or may not be accurate. An ICP created through thorough customer data analysis reveals the unvarnished truth. It is based on objective evidence of marketplace behavior, not on observations that can shift with every individual’s perspective.
The dangers of not having an accurate ICP: If your ICP isn’t spot on, your lead generation will be off and there will be no getting it on track. You could have the perfect channels and execution, but it won’t attract whom you want. Or, it will turn people off.
One MECLABS Research Partner related how it tripled its Google AdWords spend and doubled its digital marketing investment, but hadn’t reviewed its ICP in two years. The result: Its lead conversion decreased by 50%. The Research Partner’s marketplace had changed dramatically over the last two years, and it was targeting the wrong people. The company didn’t bother to look at the qualities of who has been attracted to them recently.
The benefits of having an accurate ICP: An accurate ICP can increase revenues without increasing budget.
Consider another Research Partner. The company wanted to increase its average sale, which had been about $60,000. We advised the team to develop a database of prospects that fit its ICP. We then conducted a lead generation campaign. In the first year of the new program, the average sale rose to $80,000, while revenue increased by 20%. The sales team focused on fewer opportunities, but these opportunities were of much higher quality. The team achieved more revenue without spending more money or more time. Learn more about that in my book, Lead Generation for the Complex Sale.
The upshot: An ICP ensures you take full advantage of the very best lead generation opportunities and never waste time, resources or energy settling for so-so ones.