For many years, sales and marketing teams have been searching for ways to connect with new and existing customers. Understanding what a customer needs and providing the right solutions are critical to any team's success.
Many companies are simply casting a wide net and hoping to connect with the right customers, while others have started using buyer personas and identifying their ideal customer profiles. Statistics show that using a buyer persona and understanding your ideal customer will increase sales by a significant percentage. There are many examples, like a case done by entrepreneur.com showing a company whose sales leads improved by 124%.
In this article, we're going to dive deeper and understand the differences between these concepts and the similarities. So please read on as we explore this essential topic.
What is an Ideal Customer Profile?
In one study, companies that used an ideal customer profile saw a 68% higher account win rate. This could mean an enormous difference between success and failure in sales and marketing.
Many companies who cold-call and cast a wide net in their marketing and sales departments are excited if one out of one hundred becomes a customer. But even when someone becomes a customer, how does a company know that they will be the right fit?
In some industries, the wrong customer can cost you more than in others. Team members could take time, resources, and personnel away from their priorities to deal with a customer. Too many issues like this could do long-term damage to any company. So how does creating an ideal customer profile help solve this issue?
An ideal customer profile (ICP) is a detailed description of your perfect customer, what they want, how to reach them, etc. It's a process that involves gathering information about your target audience and then segmenting them according to their common traits. This segmentation is what is going to help your team pinpoint the right solutions. It will also help you determine whether it is worth it for your company to invest in this customer.
So why should you use an ideal customer profile? Simply, it helps you focus on the right customers. An in-depth understanding of your ideal customer allows you to tailor your marketing efforts toward them more effectively. And, if done correctly, it will help you avoid wasting time and money on people who aren't going to buy from you.
An ideal customer profile should be created by conducting research into your target market. This research can include surveys, interviews, and focus groups with potential customers and non-customers alike. For example, if you are looking for customers for an online-only product you are selling, you'll want to ask the right questions as you gather information about prospects. Ask how often they shop online, how much money they spend when shopping online, and what products or services they are looking for. This will narrow the customers that may be a waste of time or resources and help you target and nurture leads that fit what you are looking for.
Once you gather this information, it needs to be organized to show how similar or different each person is from the other based on their answers. This will help you identify patterns in the data which show commonalities among certain types of people within your target audience – these are known as segments. Many tools will help you segment your audiences. Once you have all of this information, refining the communication methods with prospects is just as important.
What is a Buyer Persona?
Improved open rates and click rates in email campaigns, an increase in the effectiveness of your website, and doubling the effectiveness of targeted ads are just a few of the benefits of using a buyer persona.
Buyer personas are fictitious but realistic representations of your ideal customer. They are developed through research and analysis of the market, customers, and competition.
A buyer persona is an amalgamation of information about your target customers. They can be as detailed as you need them to create an accurate picture of who they are and what matters to them. A buyer persona will help you understand your customers, so you can tailor your marketing efforts to their needs and wants. It also means that when you're writing copy or creating content, you'll be speaking directly to those people rather than just making assumptions about them.
For example, if you are a company that sells outdoor apparel, you'd want to create a buyer persona. You can do this by simply creating an imaginary character whose values will help you make decisions in the future. If you want to sell more outdoor gear, you can create a persona for them. Ask yourself does this person like hiking, fishing, climbing, or all of the above. In this case, you'll make a decision. You can even give your persona a name. Let's say in this case it's Hiker Harry or Hiker Harriet. Hiker Harriet likes hiking during the summer and camping. In this case, this hiker persona will help you create new products and many other decisions for your outdoor apparel company.
This process will require some legwork and research, but it will help a company narrow things down and produce more likely convert content. This leads to increased sales and, most importantly, informed decision-making from your company and its employees. The term buyer persona is often overused and misused among marketers, but hopefully, this process outlined above can help you create more meaningful and insightful customer profiles for your business.
The Difference Between ICP and Buyers Persona
By now, you've met both customer profiles and buyer personas. While we're likely to use these terms interchangeably in the coming years, it's essential to remember how they differ.
In theory, ideal customer profiles are not entirely unlike buyer personas. Both are a way to analyze your target consumers' behavior to understand them better. This information is going to be vital for your marketing and sales teams. It will be the differentiator for you and your customers as well.
However, there is one key difference: while buyer personas focus on the needs and wants of individual people, ideal customer profiles are more focused on general traits and preferences. Perhaps it's best to view these two options as part of a spectrum – while buyer personas represent the two ends of that spectrum, each project will have its own specific needs and goals to determine where those ends fall.
Our case study with Walls.io shows positive results after the company implemented the ICP scoring model in their workflow. Overall, companies that create personas and profiles are just seeking to understand their buyers more.
If you're a small business or startup, it's essential to focus on what you do best and who your customers are. By doing this, you will be able to narrow down the audiences that would use your product the most, finding the audiences that will bring you the highest ROI on marketing activities. The more you know about your audience, the more you can personalize their experience and make them feel special. This is key to creating brand loyalty and building sales as a small business or startup.
Why Your Business Should Use Both ICP and Buyer Persona
Business owners need to use buyer personas as a tactic to keep the focus on how they can better meet the needs and wants of their customers. If you're too busy trying to make your product or service better, you can't be expected to give the same attention to your customers. That's where buyer personas come in.
By paying close attention to the needs of your target demographic, you can ensure that you're designing your product or service in a way that will resonate with them. You'll have their best interests in mind from start to finish. With this approach, it becomes easier for you to answer questions.
The key takeaway from this should be that businesses should always do their best to create ideal customer profiles or buyer personas.
- The first is that it will help you follow your target audience around the web and dip into every relevant place to learn about your customer.
- The second is that it will help you avoid focusing on irrelevant demographics and wasting money trying to reach people who will never be your customers.
It's a valuable exercise in business planning to think about your ideal customers and try your best to cater to them before they walk through your doors. Customer profiling is crucial whether you're a car dealership or an eCommerce business. However, all customer profiling isn't created equal, and you'll want to plan carefully before you get started.
How to Automate and Streamline ICPs & Buyer Personas Scoring
After you create your ICP or buyer persona, you will face the next challenge: how to quickly and accurately evaluate all your inbound leads? You have several options.
The typical inbound lead workflow is currently based on either manual lead scoring or automated lead scoring using such marketing tools as Salesforce, Hubspot or Marketo. But there are some problems with both of these approaches.
So, how to get the absolute maximum from ICP / Buyer Persona scoring?
This is where an automated AI-driven lead scoring system can assist. Instead of relying on the internal scoring model of your marketing tool, you set it up according to your individual preferences with the Altum Analytics solution. The platform does the rest for you, and you get the most detailed analysis of your inbound leads. And this, in turn, allows you to build a new, more efficient inbound lead workflow.
Altum Analytics provides the most advanced automated lead scoring platform on the market by using the power of AI. With our solution you'll get high-quality B2B firmographic data for your ICP or Buyer Persona model, an easy-to-use lead scoring builder, and also powerful reports. Also, Altum Analytics is сompatible with Hubspot, Marketo, and Salesforce.
You can try it for yourself! Sign up for a free 30-days trial or book a demo call now!