How To Build Your SaaS B2B Ideal Customer Profile
In a nutshell: geography, industry, company size, project size, and revenues are the 5 pillars you have to analyze and work on. As you can see, all of these criteria are about the company and not the individuals you’ll be working with. This is very important: because ICP is all about analyzing companies. When you switch from companies to individuals, you’re working on something different: your Buyer Persona. And that’s actually the step you should be working on as soon as you have defined your Ideal Customer Profile.
I’ll be writing about SaaS B2B Buyer Persona in a different article. For now, let’s dive into the importance of the ICP, and the 5 pillars you have to start from.
1. Geography
A lot of companies are global today. But geography is not only about the area that your service could potentially reach. Actually, this is mostly about the region that best recognizes the value of the service itself. For example, if you sell a CRM, or a Learning Management System, or even an eCommerce software, most likely you’re offering a service at a global level. But how reactive, interested and mature is the North American market if compared to the EMEA one? Even more: are you able to deliver the full end-to-end experience (from demos to implementation, not to mention customer support) in multiple languages? If not, you may want to optimize budget and bandwidth and focus on your core geographical region first. Localization of content (website, assets) and services can be very expensive, so try to understand if that’s your priority, before committing to something that time and budget-consuming.
2. Industry
Very important. Different industries come with a lot of specific regulations and laws. Is your service (or even your sales process) able to comply with those? Based on my experience, it’s not easy to sell to Public Administration or Government. Let alone the Military/Defense sector. Data hosting is a major concern for them, and their buying process can take years. Besides this kind of limitations, you should also understand what industry would a) be most interested and b) would benefit the most from the use of your product. Generally speaking, Software and IT companies are more tech-savvy, so it’s easier for them to understand the value behind the adoption of a SaaS B2B product.
3. Company Size
When you think about your product or service, you have to understand the company-size fit. What does that mean? Let’s think about CRM, for example. CRM could be useful for both small and large-sized companies. But of course, it would have to come with a totally different set of features. Would Marketo be great for a company with 50 employees? Maybe not. Also, try to understand how many people your customer will need in order to use and manage your service at its best. If a company is well structured, then it’s likely that they will have more people to allocate on this specific software/project. Otherwise, this could be just “too much” for them.
4. Project Size
This can be related to the company size, but not necessarily. In the Learning Management System environment, for example, the project size is very important. Even a small company could have a big project (>5000 users) if they are operating as a consultant. This is all about the number of final users involved in the project itself. Always keep an eye on this metric, because this will help you to identify the best fit for your software or service.
5. Revenues
When looking at revenues, you’re not just trying to understand how much money a company is making. What you’re actually trying to find out, is how much this company is likely to invest in your product. Are you selling them a productivity tool? Or something about R&D? Is your service about HR? Each company will be allocating a specific amount of money on each of these departments, also based on their revenues. By understanding this revenue/budget ratio, you’ll be able to properly focus on companies that can actually afford your service, and you won’t be wasting time (and money) by targeting the wrong buyers.
Building an Ideal Customer Profile is not easy, and for sure you won’t accomplish this project overnight. But the 5 criteria listed above will help you a lot. As I mentioned in my previous article, a good starting point could be the analysis of your customer base. By taking a look at the companies that are successfully using your service, you could actually be able to speed up the process and put this profile together in a more efficient way. But be careful: you always have to work on a relevant amount of data. Don’t just focus on the last 5-6 customers you acquired, or you’ll be doctoring results, with potentially disastrous consequences. Good marketing takes time: crunch your numbers, review results and involve as many departments as you can (marketing should in fact be working with sales, but also the customer support and the implementation teams).
Be resilient and never give up. By defining your Ideal Customer Profile based on these 5 criteria, you’ll be able to better focus your marketing efforts and dollars. You’ll be surprised by the amount of time and money you’ll save by stop targeting the wrong companies. As a result, your content marketing team will be more productive and focused. And your campaigns will have a better conversion rate, thanks to a more targeted/relevant advertising strategy.
