What Is An ICP (Ideal Customer Profile), & Why Is It Important?

What does the term “ICP” stand for in marketing? 

ICP stands for Ideal Customer Profile.

Many people assume that this is a description of anyone who could benefit from a business’ product or service. 

When I start working for a new marketing client, the first thing I ask them is to define their ICP, and most people do it by listing all the different types of customers that they service. 

However, your business’ ICP is a lot more specific than that. 

Think of it this way: Every business has imbalances. For example, 20% of your customers might provide 80% of your revenue. 10% of your customers could provide 90% of your headaches. 30% of your customers may take up 70% of your time. And so on and so forth.

An effective business capitalizes on those imbalances. 

Let’s remember, your ICP is your Ideal Customer Profile. That first word is the most important. 

Your Ideal Customer Profile is a description of your BEST customers. The 20% that drive 80% of your revenue. 

Too many business owners try to focus on being everything to everyone. You can generate a lot of revenue that way, but that’s not where the high profit margins are. More money just means more problems unless it comes with more profit. 

Think about your best customers. Your top 10-20%. Imagine how different your business would be if all of your customers were like them. 

That’s why defining our ICPs is absolutely critical for every business. Before you spend a penny on marketing you need to know who you are targeting – otherwise you are throwing money down the drain.

Now, imagine your worst customers. The 10-20% of your customer base that you lose money on when they shop with you – because they take up so much of your time or leave bad reviews or return too many items, etc. 

If you start marketing your business without first defining who you are targeting, you will quickly start bringing in more of those people. 

Why? Because the crappy customers are also the easiest to get. And with the way social media algorithms work these days, if you start targeting everyone, they will go after the lowest hanging fruit first. You’ll end up losing more money than you make. 

Take the time to define your Ideal Customer Profile before you launch your next marketing campaign. 

Figure out who your best customers are, and then figure out how to get more of them. Ignore everyone else. Even if you pay twice as much per customer, you’ll make more money and see healthier growth than if you target everyone.

Questions? Leave a comment and I’ll respond!