Recently, Venture Handle was approached by the Marketing Head of a Series A-funded B2B SaaS venture with a unique situation.
Situation: The B2B SaaS company had done well up to the past couple of quarters, but suddenly cracks started to emerge while scaling. On one hand, sales team was struggling on conversions where SDRs were wasting a lot of time in closing. On another hand, the marketing team was gung-ho about the volume of leads. IT WAS A TUG-OF-WAR BETWEEN THE SALES AND MARKETING TEAMS. Something was amiss. We got into the trenches, On delving deeper we found where the issue lay. Problem was ICP or rather Poorly defined ICP.
Based on how we helped resolved the situation, I am sharing some of the insights for founders/teams in a similar fix. Hope this would help
Let’s talk about ICP - Ideal Customer Profile
What is it?
ICP is Ideal Customer Profile. It brings method to the madness- A method of identifying the perfect, high-value clients for your business.
Why is it needed?
A laundry list of client roster leads to waste of time and resources, without bringing in sufficient returns. Specifically when a company moving to scale it sales and marketing efforts.
Let’s take the example of Blackberry. One of the reasons why they failed, apart from lack of tech updates, was that they continuously targeted the wrong customer type. BlackBerry majorly focused on the richer section such as Celebrities, Businessmen and other rich administrators. But, as soon as iPhone sales increased, Blackberry lost its enormous target audience and importance in just a little period.
Furthermore, BlackBerry only focused on enterprise-level marketing and neglected the consumer portion.
How do you know if you need an ICP?
If your business is facing high Customer Acquisition Cost or the Conversion Funnel is not performing well despite your motivated sales rep team, or lack thereof, it’s time to consider developing an Ideal Customer Profile.
What would the end results look like if you implemented it?
A structured client roster curated based on key characteristics which are the best fit for your business. Basically, you will procure high LTV clients at lower CAC, ones that will achieve long-term benefits from your products or services, ergo, benefiting you.
Identify the problem that your product is trying to solve and who will benefit the most from your solutions.
For example, Venture Handle recently helped a Y-combinator backed AI based staffing platform to identify the problems that exist in the market, the solutions that they should ideally provide, and most importantly, the segment of industry which will benefit the most from their solutions.
Analyse your existing customer base using Data Analytics/ CRM
Use the following questions as an example to create the CRM model and gauge key characteristics:
How and where did they hear about your product or service?
Why did you choose their solution?
What pain points were they looking to resolve when they first purchased your solution? How was your solution able to resolve those particular issues?
What has led them to continue to use your solution?
Build a Common Persona
Tabulate the Characteristics of your best existing clients (the ones which fit right with the solutions that you provide). Score gives a good starting point here . You can correlate this data with the findings in the first step to find out how many of your existing clients are ideal for you.
Identify the Market Gaps
Time to look for your ideal match in the market now that you know what you are looking for in your customer. To make the search easier:
Do a Fitment Analysis with a Value Matrix to separate the sand from the grain. Sounds too complex, It’s not rather it is more about process. For example, here is an example of value matrix done for talent management firm
Identify the Marketing Channels most popular in the market, and how yours are compared to them. Change your tactics to stay updated with the latest. Hubspot provides a great example here
Find the Right Representatives
Identify the right client representatives to avoid the getting turned away for offering solutions to problems which they don’t even know about!
For example, in the case if you are a B2B Staffing Company doing an outreach to prospect, Who should the SDR reach out- HR Managers, Talent Acquisition Teams, Functional Leads or Business leads? The framework would identify the right personas withing an organization for SDRs to reach.
Review and Renew
The market keeps changing and so does the customer’s preference. It would be best to conduct a short review of the market every quarter to identify the changes needed to ICP.
Tools which can help you to keep updated with Market Trends are:
Semrush Market Explorer (.Trends) - creates a visual overview of the market trends in the selected country. (Paid)
Google Trends – Real time trending searches (Free)
Quora – Sneak-peak into the minds of your audience (Free)
Brand24 – Gives Insights on real-time conversations happening around your brand and your competitors on social media platforms. (Free for 14 days)
Attest – Survey-based Insight tool providing market trends, competition tracking and development of new products or services (Free for first survey)
Sample of ICP definition for Y combinator backed AI Hiring platform that Venture Handle worked to develop personas
Value management matrix for developing ICP for SaaS Talent Management Platform
Want an ICP done?
Venture Handle will give you customized insights on how to gain lifelong clients using unique ICPs.
What you’ll get:
Generate more and better leads (25% more)
Reduced Customer Churn by helping retain the best of the existing customers (by 7x)
Higher ROI on the marketing leads
Reduced time on converting lead (15%-20% faster)
Deep Insights about client personas Need something specific on ICP, Set up a free discovery call with Venture Handle Team