What is an ideal customer profile?
An ideal customer profile hypothetically describes the kind of company that, if they purchase your products and/or services, would bring the most value to your business. It is exclusively used by business-to-business (B2B) companies.
If you want a more in-depth understanding of this topic, check out the FAQ section below:
Question #1: How do I define an ideal customer profile?
To define an ideal customer profile, you need to use something called firmographics, which include things such as:
- The company’s primary pain points
- The company’s size
- The company’s revenue
- The industry or industries in which this company operates in
- The location at which this company operates in
Again, the goal here is to identify the kind of companies that would bring in the most returns to your business if you manage to close them as clients—which, in most cases, satisfy the following conditions:
- They have quick and successful sales cycles
- They have great customer retention rates
- They have a high number of potential evangelists for your brand
Question #2: Why do I need to define an ideal customer profile?
The main reason you need to define an ideal customer profile is that selling to everyone interested in your products and/or services is a great way to spend serious time and money for mediocre returns.
A global brand that has already been in business for decades, for example, would, in most cases, be much better to sell to than a one-year-old startup with limited resources. Both would cost time and money to acquire and retain, but the size of each transaction with the former would most likely be significantly bigger than the latter—and there is no guarantee that the startup would stay in business long enough for you to actually profit from them.
Question #3: What is the difference between an ideal customer profile and a buyer persona?
The biggest difference between an ideal customer profile and a buyer persona is that while the former considers the company as a whole, the latter is more focused on the type of people in the said company who are involved in making purchasing decisions.
The goal of a buyer persona is to hypothetically identify everyone you need to reach out and pitch to in your target company to close the company as a whole. To define it, you will need to use firmographics such as:
- The person’s primary pain points
- The person’s role and seniority
- The person’s income
Let us take a closer look at each one:
First, by understanding the primary pain points of the person you have to sell to, you will be able to craft a significantly more effective pitch. All you have to do is angle it in a way that directly addresses the person’s biggest challenges.
Second, by understanding the different roles and seniority levels of the people you have to sell to, you will know not only who to prioritise, but also how to pitch to each one of them. The goal is to close as many of the top decision-makers in the company as possible because they will most likely have the final say in purchasing decisions as well.
Finally, you also need to take into account the income of each person you have to sell to because it may affect how they react to your pricing.
For example, if you have to sell a relatively expensive product or service to someone who does not have an exceptionally sizable income, it might help to highlight the benefits and potential returns more instead of just mentioning your prices on their own.
Question #4: What is the difference between an ideal customer profile and a target market?
The biggest difference between an ideal customer and a target market is that while the former is used by B2B businesses, the latter is more suited to business-to-consumer (B2C) transactions. They work pretty much in the same way—but target very different types of clients—and share the same goal: to identify the types of customers that would bring the best value to a business.
You can check this article from Marketing Systems By Design for more ideas on Ideal Customer Profile.