People like Hank Barnes, Scott Gillum, Ardath Albee, and Maureen Blandford are doing some great work in helping us rethink the question of “Who is our buyer?” In addition to helping us define our buyers in much richer terms, they are helping us think about how to incite them to buy.
For years, we’ve had concepts around “Ideal Customer Profiles” and “Personas.” We’ve characterized our customers with things like firmographics and demographics. We proudly say, “We sell to the financial services companies with more than 10K employees and assets under management exceeding $10B.” That helps us narrow our focus on customers that are likely to have a higher interest in our offerings. We know that we shouldn’t pursue manufacturing companies, healthcare, technology, professional services, CPG or other domains. We also know that we shouldn’t look at smaller, local, or most regional institutions.
We may even enrich that definition, but looking at segments in financial services, for example, does it include commercial, retail, insurance, investment, fintech, PE, VC, and other financial services companies?
Once we have defined the ICP, we focus on the personas within the company. These are, supposedly, the people most impacted by or interested in the issues we address. We may define those personas in terms of functions, for example, marketing, sales, finance, HR, development, manufacturing, or operations. We may further segment it based on role or title, for example, CFOs, Controllers, and so forth.
The thinking behind this traditional segmentation is to identify those people and organizations that are more likely to be interested in our products and solutions. (Notice, we are still focused on ourselves and what we are trying to achieve.)
But we are seeing how these traditional ways of defining our ICP and personas are failing us (I won’t even bother to address the large number of people and organizations who aren’t even defining ICPs and personas in these ways, for them the ICP and persona is anyone that fogs a mirror.).
We are learning there are a number of other dimensions to identifying customers that might have a need to buy.
First, we are seeing that while firmographics and demographics may be similar, the business maturity/operating style of organizations may be very different. For example, if we look at the classic Geoffrey Moore maturity curves, we can see our customers may be in very different spaces. For example, some may be innovators, some may be early adopters, some may be laggards.
While their firmographics and demographics may be similar, companies have very different operating styles, risk profiles, and willingness to change, based on where they are positioned in the business maturity curves. For example, some years ago, we were helping a client bring a dramatically new solution to the market. They had characterized their ICP to be multi-national retail banking leaders. But they were struggling to get traction. We determined the solution appealed to a certain sub-segment, it was institutions who could be characterized as innovators and early adopters. Once we started identifying those organizations that fit that profile (within the larger retail banking characteristic).
One thing Moore’s work has also taught us is that as our offerings mature (or the customer understanding of the problems mature), our ICP will change. Our old ICP may be less interested in our offerings. But organizations in the early and later majority may be at a point of readiness that makes them become our ICP. (There are interesting implications for our solution development strategies as customer understanding of the problems we solve matures. If we wish to keep Innovators and Early Adopters in our ICP, we have to be continuing to innovate and drive new thinking into the space.)
But there’s more……
We start to see there are behavioral characteristics, both organizationally and individually, that enable us to further refine our ICP and persona definitions. Cultures, values, belief systems can be important characteristics. Attitudes toward innovation and change, attitudes toward risk, mindsets all become dimensions of behavioral characteristics that help us better refine, defined, and engage the “right customers.” For example, from a firmographic/demographic perspective, enterprise software/technology companies fir our organization’s ICP. But within that, there are profound organizational personality differences. There are certain companies we actively pursue because they are a great fit with our company, and others we will not do business with–not because they are bad companies, but they have behavioral characteristics that are different from ours, making it difficult for us to maximize our ability to create value.
Just as organizations have behavioral characteristics that may be better aligned with ours and our solutions, the personas—people—in the organizations have behavioral characteristics. It’s useful to understand those, matching with those who might most value our engagement outreach. Alternatively, we can adapt our engagement strategies to better align with their behavioral characteristics.
Taking this approach to highly refined ICPs and personas, across multiple dimensions helps us narrow our focus on customer and prospects that are more likely to be a fit. As a sidenote, many of the emerging AI/ML tools help us more easily characterize these segments in very rich ways.
But just because we have narrowed things to organizations and individuals that are more likely to be the “right customer,” doesn’t mean they have a need to buy. Do they have a problem-one that we are the best in the world at solving? Do they recognize they have a problem? Do they feel compelled to address that problem and change?
But having a problem that you are compelled to solve, doesn’t necessarily mean the customer has a need to buy….
Enough for now, I’ll address these others in my next post.
