Ideal Customer Profile – Part 1: Introduction

10 minute read

In a world responding to the Mega Trends of Digital Transformation and Customer First, companies are under pressure to act strategically, collaborate proactively and respond quickly, earning their customer’s business month on month, time over time. Selecting companies for whom you can best deliver value makes that a lot easier. Over this series of posts I will suggest a framework that you might want to use to identify your Ideal Customer Profile.

In the same way that you qualify a sales opportunity you need to assess a company to clearly understand whether you can achieve the goal of delivering customer value while also uncovering a significant revenue opportunity. There are core elements that you should consider:

  • Firmographics: Is the company in our sweetspot?
  • Customer Business Problem: Are they likely to have problems that we can solve?
  • Positive Impact Potential: Are they likely to be successful with our product?

These three elements point to your Ideal Customer Profile, the creation of which all starts with understanding the value that you can deliver to your customer.

I like to start with the Customer Value Question:

What business problems does your customer have that you solve better than anyone else?

In order to answer that question, you first need to understand the profile of the customer that your business, its products, services, delivery and support capabilities have been designed to best serve. Because we also know this:

The impact on the customer of a bad buying decision is typically greater than the impact on a salesperson of a lost deal.

Defining your Ideal Customer Profile guides you to describe the customer that you can guide to make a good buying decision, when for that customer you can truthfully answer:

Yes, if I were that customer, in that account in that industry, with those business problems, then I would definitely want to buy what I have. It’s the best thing for them to do.

That’s the honest conversation that you want to be able to have with yourself about every customer, or account or department in an organization that you want to target. That’s the Truth Test.

No one really wants to sell something to someone if they think it is not needed. It’s harder to do that than sell to a real need that you can fulfill, and frankly it’s also the wrong thing to do. To know whether every account you target will allow you to pass the Trust Test, you need to have a deep appreciation for the type of customer who will really benefit from your product or service. You need to be clear on your Ideal Customer Profile to ensure that you are selling to a customer who you can guide to make a good buying decision. With that conviction in your back pocket, you’re going to have the courage to make bold statements, be strong in your presentation of value – knowing that: “Yes, if I were that customer, I would definitely want to buy what I have.”

Conviction is a wonderfully powerful asset; it puts steel in your spine and the confidence that you know that you are in fact acting in the customer’s best interests to help them make a good buying decision.

The FOMO Problem

There are two things a seller (or sales organization) can control:

  • Who they call on
  • What they say when they get there.

In many cases, the irrational fear of potential missed opportunities (FOMO – the fear of missing out) drives otherwise rational sales and marketing professionals to adopt a scattergun approach to target customer selection.

Effective selling is about quality not quantity. High quality customer engagement happens when you engage with fewer buyers, selected by profiling your target buyer, and assessing your offering from the customer’s perspective. If you are getting positive responses from only 10 percent of the targets you contact, you are wasting 90 percent of your time and have less resource available to add value to the customers that you can help. Spend the time on the right customers, by selecting them well, and you will need to contact fewer customers to get better results for both you and the customer.

Consider why sales transactions occur. A purchase is made when the buyer considers that the total cost expended is less than the total value received. The two easily identifiable aspects of this equation are ‘total cost’ and ‘value received.’

The total cost is a combination of the product price and the cost of the implementation of the product to meet the needs of the buyer.

Xerox and other copier vendors express their product cost, not as the capital expenditure of the equipment, but as the per-page cost for each copy. Buyers of software applications include the software license fee cost plus internal resource usage, to determine the total cost of ownership (TCO) of the software solution. Air travelers, when looking at budget airlines, factor in flexibility and the potential extra travel time and costs if the airline does not fly into a major airport. Total cost is one side of the equation.

However, deals are rarely won or lost exclusively on cost. Until value and pain exist in the mind of the buyer, any price is too high. Value is not just the list of product features and benefits. For every overt need stated by a buyer, there is pain and consequential impact if that need is not met, or the pain is not cured.

Customers value vendors in a multitude of ways. You have features and capabilities customers don’t care about or put on their purchase decision criteria. Just because Microsoft Excel has the Kurt function to enable you to establish the kurtosis (the sharpness of the peak of a frequency distribution curve) doesn’t mean that most users care about it. (In fact that is probably true for about 90 percent of the 461 functions that Excel 2013 supports.) People still buy Excel for several other reasons.

Some things your product does, or how it operates, users will find irritating, but not terminally so. I like to use WordPress for my personal blog at, though some days the performance is not what I would like it to be – but I still use it and pay for it because it allows me to build and manage my website very easily.

There are basic features or capabilities in the product that you provide that are expected as table stakes. If you are selling a car, the buyer expects it to have four wheels, reasonable fuel economy, and seatbelts. Online hosting suppliers are required to provide a secure, reliable hosting infrastructure that doesn‘t fail. These are the basic capabilities – your price of entry – that are assumed by the prospective buyer. You don’t get any credit for these fundamental features.

Then there are the few specific needs that the customer cares about deeply. If you can satisfy those requirements with your complete solution, the customer sees real value and cares less about the competitor’s feature-laden ‘über-product.’ If you understand and can focus on the value that you can uniquely and competitively deliver – from the customer’s perspective – then the profile of customer to whom you deliver that value will self-suggest. As you redesign your efforts to make it as easy as possible for a customer to buy, you must consider the specific profile of that customer – your Ideal Customer Profile. Otherwise, you will fail to meet his exacting needs.

Choosing who not to do business with is as important and sometimes easier than choosing those with whom you should engage. Where prospective customers operate in markets that require all products or services used to be available in the local language and your product is English language only – move on to the next account. Don‘t be swayed by the future possible foreign-language capabilities that you might deliver in the next few years. There are probably sufficient customers elsewhere who can operate in English only. If customers are married to traditional practices and your offering promises advantage through discontinuous innovation – look elsewhere. If your product is leading edge, your customer must fit the profile of an early adopter; so you should prioritize companies whose outlook maps to the early adopter profile.

Value must be expressed and value expression implies that you understand the position you want to occupy in the mind of the buyer. Positioning is not about you, your product or your company, but about the place in the customer’s mind that you want to inhabit. If, from the broad expanse of the world’s companies, you have selected your customer targets well – customers chosen to meet the inherent value of your product, and pruned by profile to meet the competitive advantage you bring – then your positioning should self-suggest. It will encompass an expression of value that sets you apart as the preferred supplier or customer partner. And this is where well-directed, strategic marketing travels side-by-side with effective selling. The determination of what specific value you can provide to a customer better than anyone else is the one silver bullet that is crucial to the sales role. Successful companies are not concerned about marketing activity to win marketing awards; they are focused on providing a compelling expression of value that helps them win sales with customers who fit their Ideal Customer Profile.

Coupled with your unique differentiated value, clearly understood and articulated, this consistent approach can be the catalyst for unparalleled revenue acceleration in your chosen market. You won’t always get the deal – but you can rest assured that you will be in the right place, at the right time, with the right offering, more of the time.

Selecting your target customer with restraint and accuracy will shorten your sales cycle. Your time is spent where it counts. Disciplined customer selection will increase the ROI for sales effort, reduce the marketing and support expenditure associated with the sale and, as a result, deliver greater profits. A single professional salesperson will be more effective addressing a market or territory armed with a well-aimed rifle, than an army of marketing folks wielding shotguns.

How can you apply your solution to a customer’s problem, unless you have focused on the needs of that specific customer? It’s not possible.

Is it more likely that you will succeed if you identify the ideal candidate, before you start your selling exercise? Without question!

Therefore you need to understand the profile of the customer to whom you can uniquely and competitively deliver the most positive impact; concentrating your efforts on those customers whose needs mirror the advantages and benefits you offer. This is your ‘sweetspot’ or your Ideal Customer Profile.

I describe this more fully in my book Digital Sales Transformation in a Customer First World.

In the next post I will describe the first steps to Create Your Ideal Customer Profile.

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