Closing Time

Who is Your Ideal Customer? Defining ICP and Aligning Go-To-Market Teams Around It

Every business has its “best” customers, aka those who see significant value from your products or services, become long-term repeat buyers, and advocate for your brand.

But when it comes to figuring out who those customers are and how to best serve them, alignment is key. 

Then, GTM leaders need to closely monitor sales metrics (such as ACV, churn, and NRR) to ensure your ICP is still relevant 6, 9, and 12 months down the road – which is especially challenging for high-growth companies looking to go upmarket.

In this episode of Closing Time, Insightly’s Chip House is joined by Brad Rosen of Sales Assembly to talk through defining ICP (ideal customer profile) and ensuring that it resonates across your organization.

Watch the video:
Key Moments:
Defining ICP for early-stage startups

At the initial stages of a startup, defining the ICP can be challenging because you may have a general idea of your target audience but lack actual customers to guide you. So, how can early-stage companies determine their ICP effectively?

Initially, the focus is on acquiring sales, generating revenue, and building a customer base while gathering valuable feedback. This allows you to understand what is working and what isn’t. Once you achieve some level of product-market fit and establish a foundation, you can start leveraging data to identify the customers your product resonates with. Analyzing factors like conversion rates within the sales funnel, customer spending patterns, and retention metrics become crucial.

While ICP is often associated with acquiring customers, it’s equally important to close the loop on retention metrics. Are you able to retain customers, upsell to them, and maximize their long-term value? Many products begin by targeting small and medium-sized businesses (SMBs) or the mid-market and gradually expand their reach to the enterprise segment, if feasible.

Regardless of who you target, you should always keep in mind one thing: delivering value to customers. Even in the early stages, understanding whether customers genuinely benefit from your product is fundamental. The ICP represents the intersection between those who desire your product and those it serves effectively, aligning your capabilities with their needs.

Three P's to consider

When defining your ICP, it’s important to consider the size and stage of the company, as well as the technographics, such as the tools they currently use. However, before defining your ICP, Brad shares three P’s that he recommends considering first: product, process, and people.

1. People. Assess the capabilities of your team members who are responsible for marketing and selling your product. If your previous sales efforts were focused on small and medium-sized businesses (SMBs) or mid-market clients, and now you wish to target higher mid-market or enterprise customers, it’s important to determine if your team has the necessary expertise and skills to execute effectively in that new market segment. If not, it may be necessary to reconsider your ICP or explore ways to enhance your team’s capabilities.

2. Process. Selling to different customer segments requires different approaches. If your previous sales process was transactional, where deals are closed quickly, transitioning to enterprise sales with longer cycles and involving multiple stakeholders demands a different approach. Evaluate if your existing processes align with the requirements of your desired ICP. If not, it may be necessary to refine your processes to effectively cater to the needs of larger customers.

3. Product. Does your product have the necessary features and scalability to meet the requirements of larger customers? While landing a large customer may seem enticing in terms of revenue, it’s essential to consider whether allocating extensive resources to serve that one customer would hinder your ability to support other areas of your business. Striking the right balance is crucial to ensure your product is aligned with your target market’s needs without sacrificing overall growth potential.

By addressing these three aspects – product, process, and people – you create a solid foundation for defining your ICP. Once these areas are aligned, you can then dive into data analysis. Explore which verticals and industries respond positively to your product, consider company size as a segmentation factor, and evaluate other factors such as revenue, number of employees, and software usage. These insights enable you to tailor your value proposition effectively.

Aligning go-to-market teams around ICP

There can sometimes be confusion between Total Addressable Market (TAM) and Ideal Customer Profile (ICP). TAM represents the theoretical audience that could potentially purchase a product, whereas ICP focuses on the customers who actually buy the product and derive value from it.

While TAM encompasses a vast market, it is unrealistic to expect to capture the entire market. Investors often deem TAM as irrelevant. Instead, it is more effective to identify a specific group of companies, whether it be 5,000, 10,000, or 50,000, that align well with the product and have demonstrated potential for success. This involves showcasing case studies and having a compelling narrative to engage with these target customers.

Regarding “happy ears” or the eagerness to expand the ICP, it can be seen across both sales and marketing teams. However, it is crucial to involve revenue operations and other stakeholders to ensure alignment. Marketing should generate leads that have a high potential for conversion and retention, while sales should focus on closing deals with customers who align with the ICP. All three departments—sales, marketing, and revenue operations—should work together toward the common goal of long-term revenue generation.

To achieve this alignment, consider factors such as the speed of customer acquisition, deal sizes, and the long-term spending potential of customers. Churning through customers due to a misalignment with the product’s fit wastes resources and creates future problems. The ideal customer profile should be a shared understanding among the departments, with a continuous feedback loop in place. Sales feedback to marketing can influence adjustments to filters and criteria for the ICP, ensuring a more accurate and effective targeting strategy. Customer Success (CS) teams can also provide valuable insights into customers’ use cases, allowing for further refinement of the ICP. Marketers should actively engage with sales and CS teams to understand customer pain points, motivations, and needs. By gaining insights directly from prospects and customers, marketers can craft compelling messaging that resonates with their specific requirements.

For smaller and growing companies, the ICP will evolve over time as the organization hires more team members and adapts its goals and objectives. As companies move upmarket, their expectations and understanding of the ICP will shift. Different teams, such as SMB and enterprise-focused teams, may have distinct ICPs tailored to their target customer segments.

Conducting customer and market research

When it comes to building an Ideal Customer Profile (ICP), there are various effective methods beyond customer interviews, sales rep insights, and surveys. One valuable approach is leveraging data. Analyzing your closed-won deals and retained business can reveal patterns and objective insights into what is working well. By examining the data, you can identify successful sales funnels and customer characteristics to inform your ICP.

However, don’t focus solely on the positive outcomes – exploring closed lost opportunities can be just as insightful. Understanding why certain deals didn’t work out and whether those issues are fixable can provide valuable information for refining your ICP. It allows you to assess if your product is suitable for those accounts or if adjustments are needed to resonate better with potential customers.

Data analysis should encompass not only the customers who effectively use your product but also those who demonstrate high levels of utilization, renewals, and a propensity to purchase upsells or additional seats. These positive indicators serve as objective measures to identify characteristics that align with your ICP.

Benefits of staying industry-focused

Aligning with one specific industry enables conversations, referrals, and cross-pollination to occur more naturally. It becomes easier for people within the industry to discuss certain products, including yours, within their networks.

Buyers today seek industry-level proof points to validate a solution’s effectiveness. They want to know if you have solved similar problems for others in their industry or with similar roles. Having success stories that cater to their specific needs and challenges helps build credibility and trust during their research and evaluation process. You capture their attention and generate interest by highlighting how their competitors are gaining an advantage using your product or solution. It prompts them to wonder, “What are they doing? How is it working?”

In B2B SaaS, professionals often move between companies and roles. This presents an opportunity as some of your best customers may come from this carryover effect. When individuals transition to a new company, they bring along the tools and experiences they value. Focusing on a specific industry increases the likelihood of this snowball effect, where your product becomes a trusted and preferred choice as professionals switch jobs and advocate for your solution.

Additionally, industries often share common technology stacks. This is an important consideration in today’s landscape, where integrations and data interoperability are more prevalent than ever before. By focusing on a specific industry, you can explore how your product integrates with other tools commonly used in that industry. This allows you to highlight seamless integrations, data synergy, and the benefits of leveraging multiple tools together. For example, Insightly CRM users integrate more with QuickBooks Online than any other platform. They’re able to automatically generate invoices, sync customer data, and manage accounting records without having to leave their CRM. By understanding the industry’s tech stack and specific needs, you can tailor your value proposition accordingly.


A great customer is somebody who buys your product, gets value from it, and stays with you for the long term. We’re going to talk all about defining your ideal customer profile in today’s episode of Closing Time. Thanks for tuning in to Closing Time the show for Go to Market Leaders. I’m Chip House, the CMO at Insightly CRM, and I’m joined today by Brad Rosen, president of Sales Assembly. Welcome to the show, Brad.. Great to be here. Thanks for having me on. Yeah, absolutely. So, hey, before we launch in, Brad, can you tell me more about Sales Assembly and what you guys do? Yeah, we do elevated learning and development for go to market teams. So we’ve recognized that a lot of folks that are going to market typically train their teams on their product and their process. And a lot of times there are foundational skill gaps that are really hard to train. Because you don’t have the resources and potentially even the expertise in-house to train across your whole go to market teams, things like BDR, AE, CSM, RevOps, and being able to do that well. And so we really fill those skill gaps and make sure that folks have the foundations they need to be effective at their roles. Yeah, it makes a ton of sense. And so you’re a perfect person to have this discussion with, frankly, because we at Insightly, we talk a lot about alignment between sales and marketing. And, you know, if you asked me what is one of the first things that you need to do when you’re working with your sales counterparts, if you’re in a marketing role and it’s define who you sell to, right? And be crystal, crystal clear about your ideal customer profile or your ICP. Early on at a company, like if you’re in a startup, this may be difficult because you don’t you have an idea of you who you sell to maybe, but you don’t have any customers to go on. So what are some of the methods that you’ve seen work for early stage companies for defining the ICP? Yeah, I think really early on you’re just trying to, like you said, get some sales in the door, get some revenue, make sure that you’re building a customer base and also getting that feedback from those customers. Like what’s working, what’s not. And then when you start to have some of that product market fit, you have a little bit of foundation, Then I think you really need to start to look at some of the data and understand, okay, here’s some of the customers that this is working for. Why is it working and how can we replicate that across different verticals, different companies, sizes, different industries, things like that. And so we want to look at things like how quickly are they able to buy so conversions within the funnel,. How much are they spending? And then also like are we retaining those customers? A lot of times we think about ICP as far as like signing up customers, but we also need to close that loop on the retention metrics and are we able to upsell them and kind of the NRR focus to make sure that long term we’re seeing the most value out of those customers? And I also think that like when we say ideal, that’s kind of an interesting word, right? Like ideally I’d be selling $10 million deals to Salesforce. Right? Right. But we’re not there yet. So there’s kind of this process to getting there. If you do believe that you’re an enterprise product, you may start just selling to the enterprise, but you have to have different expectations and some more ramp time to get there. Many other products typically start in the SMB and mid-market and then work their way up to the enterprise if they want to and they can. Yeah. So I mean, you said a couple of things there and one piece of that I think is super important is, do they get value out of your product? Right? And if you’re early stage, you might not know that, but that truly is the ideal customer profile. It’s sort of the match of who wants your product and it actually serves them well. You’re capability with their needs. And so, you know, early on you may not know that. I mean, we’re. I guess, lucky enough, we’ve been in the CRM market for over ten years. Right. And so we have a large number of customers that use the product, and we have a pretty good idea for who gets value from our platform. And so we try to speak to them. When you’re working with a new company, what are the top things you think about relative to ICP? Is it the size of the company? Is it the stage of the company? Is it maybe the technographics, like what tools they own? All those things seem important to me. Yeah, they absolutely are. And I think one thing you touched on it that’s super important is like, are these folks seeing value from your product? Because typically what happens early on in a company, we call up our old friends, our old coworkers, folks we know, maybe who we worked with in the past and they typically become our first customers, right? Not just like they’re doing it as a favor, but it’s more like they’re folks you know. And so as we know, those sales cycles can be much shorter. And so is someone signing up and seeing value because you have a good relationship with them or because they actually love your product and it’s perfect for their company and they’re seeing value because relationships don’t scale, unfortunately. I mean, they do to some extent, but like ultimately you’re going to have to get outside of your relationship bubble to be able to grow your company. And so actually digging into these are good customers because they love our product is super important. And then when we get to the idea around, what are the things we should look at for ICP,. I think of like three things. The three P’s actually is like the first is people. Who are the people on your team that are actually going to market? And if you’ve been selling an SMB mid-market transactional sale and you say, Well, you know what, my ICP is actually higher mid-market or enterprise, do you have the people to even go execute on that? If not, then you have to have a different discussion, right? Like is that the ICP you want to go after or do we need a change the people? The second would be the process. Same principle. If we’re selling a transactional sale, it’s very different than going to the enterprise and talking about security or talking about multiple stakeholders and the longer sales cycles. Do we have that process in place to actually drive towards that ICP? And then the last would be product, right? Do we have the product to support larger customers and are we going to waste all of our resources trying to service this one really large customer? Because it sounds good and you get a lot of revenue out of it? Or is that going to drain our resources from everything else that we’re trying to do? So I would look at those three things and then go back to, okay, once we’ve nailed those three, we’re in a place to actually drive towards what we believe is our ICP. Then we can start to look at the data and say, Are there different verticals and industries that are that are working well? Is there a company size, is usually a good way to split it out. And then are there other things that we can look at as far as revenue or number of employees, potentially other softwares that they’re using? And so we’re able to tack on our value proposition based on those things. As you pointed out aspirationally, you probably want to sell to everybody, right? And you especially want to sell big deals to large companies, but you might not have the right people, the right process, right product, to get there. And so really, it’s about alignment for again, for who you serve and who gets value. So I when I think about this, I feel like there’s some confusion out there between total addressable market and ideal customer profile. I feel like somebody is maybe getting hung up on that a little bit. So, you know, of course it’s another acronym, TAM, right? So TAM is really the theoretical audience maybe for who could buy your product, but ICP has more to do with who actually buys it and who actually gets something out of it. Is it sales or marketing that most often gets happy ears and wants to extend the ICP? Well, I think that’s interesting because, right TAM is just so large. Like in theory we could capture all of this. But yeah, as an, as you know, any investor would tell you that TAM is kind of irrelevant. Like you can’t capture a full market, that’s not realistic. I think the key is thinking about what’s actually a group of folks, you know, whether that’s 5000, 10,000, 50,000, whatever a group of companies that we believe are a good fit for our product at this time. And we have demonstrable ways to show that and prove that. We have case studies. We have a good story to tell, and then we can figure out exactly how to go after those people. And when you say who gets happy ears,. I think anybody would take, marketing would take a lead, and sales would take a sale. But I do think that that’s where things like revenue operations and other folks need to come in to make sure that we’re aligning all of those trains of thought. So marketing should only be bringing in leads that we believe we can sell and retain, and sales should only be selling deals that we believe we can retain. And so it should be all three departments that are thinking about the same thing, and that’s long term revenue. And so what does that mean? How quickly can we sign them up? How much can we sign them up for? And how much are they going to continue to spend year over year? Because as we know, if we’re just churning through customers, because we’re signing them up on the front end, but they’re not a good fit for our product. That is a bad use of resources and will cause problems down the road. So hopefully you can have alignment between the three departments as to what that ideal customer profile is. And then you’re getting feedback, right? Sales is coming back to marketing and saying, We said it was this, but this is what we’re hearing from the market. We may want to adjust these filters. Maybe let’s instead of saying we’ll go up to 5000 people, lets only go up to 2000 because we’re finding that the sales cycles are too long. Maybe CS on the back end is saying we thought that this was a good use case for these types of companies, but in reality they have another use case that’s better for them. So let’s adjust our filters. So the feedback loop I think is important, especially as you said, for smaller growing companies. This is going to change as you hire more folks as your goals and your objectives change for your company. Like you said, you’ll probably start to move upmarket and you just have to change your expectations and your understanding of what that ICP is because one group may have one ICP and another may have another, right? So if we have a SMB team and an enterprise team, they have different ideal customer profiles that they’re trying to bring in. Yeah, it makes sense.. And that’s the thing. I mean, with sales teams, you’re talking to prospects and customers all the time. So is the CS team, and I think some marketers forget that they need to talk to their sales team, talk to their CS team, talk to customers to really, truly understand what makes them tick, what are their pain points, how to speak in a language that is compelling to their specific need set. And so, you know, what other ways do you go about building this ICP other than maybe talking to customers, talking to sales reps, doing surveys? I mean, what have you seen work well? Definitely data, look back at your close won business, look back at your retained business that’s renewing and see if you can find patterns. Right. That’s typically the best way because then it’s a little more objective, to use the data just to say this is what’s working and let’s lean into those funnels and yes, definitely talking to customers but also talking to the market. Maybe prospects, like closed lost opportunities are also a wonderful place to gather information, like why didn’t this work? And is that fixable to where we want to keep this as our ICP or did we miss something when we were trying to drill into these types of accounts and where our products not applicable, it’s not resonating, whatever it may be. So don’t just focus on the good. Also focus on some of those things that aren’t working and then try to understand if it’s possible to fix those and keep leaning in from an ICP perspective. Yeah, it makes good sense. So you’re going to look at the data and what are the characteristics of the customers that are using your product and using it effectively and renewing with you. And maybe you have high levels of utilization or are more likely to buy some of the upsells or more seats. I mean, there’s all sorts of those positive indicators I would assume that can be measured objectively. By the way, your case studies resonate a lot more when they’re of the same industry. They’re competitors, right? If I’m cold outbound reaching you and I can mention your competitors using something to give them an advantage over you. You may not buy, but you’re probably going to at least listen. Yeah, let me just say like,. Oh my God, what are they doing? How is it working? Those are powerful, right? Those stories. And maybe it’s not a direct competitor and maybe just somebody in the industry, those are very applicable. And so it also makes the sales easier. Another thing is that typically people move jobs from one company to the next, right? Especially like B2B SaaS, they’re consistently moving roles and companies and a lot of times some of our best customers come from carryover, right? They go from one company to the next and they bring along the tools that they’re familiar with and have a lot of really good experience with. We see a lot of that at Sales Assembly. A lot of our folks go to the next company, bring us along because they really want to build a foundation of training and development. And so, you know, if you’re focused on one specific industry, it’s much easier to get the snowball rolling. People moving from job to job, people talking, having conversations about certain products, hopefully yours in your ICP. But if you are doing one in medical and one in finance and one in government, it’s harder for that cross-pollination to occur. Yeah, it makes sense. I mean, the way buyers buy now, they’re looking for those industry level or persona level kind of proof points. Have you solved my problem for somebody who’s like me? Whether they’re a competitor or not, that’s part of their research that they’re going to do. Right. Exactly. And so, yeah, is it like me?. But no, no, no. I have this special case.. It’s like, yeah, no, we know. We understand that this other customer did as well and we solve for it by doing these things. Also, a lot of times in the industry is they share a lot of the same tech stack, which is a big thing that we look at today. How do different tools integrate?. How do they talk together? How do we pull the data from multiple tools? Now we’re talking about obviously like AI and ChatGPT, so like are there ways that that could benefit from having use cases across different industries? So we think of integrations. A lot of folks up in the same industries use the same tools. And so now we can talk to that tool, said integrations, how people are using them together. So again, like you said, people folks like me, in many respects, it’s really something that’s going to help to drive business. So any final thoughts on ICP, Brad? I would say continue to get out there, especially as you’re building your business. Use the data so that it’s much more objective than, well, I think that these customers are seeing value and then experimentation. If you’re looking to get into a new market, don’t go spending millions of dollars on your marketing and hiring, you know, five or ten reps right off the bat. Put a tiger team out there, put a little bit of, kind of marketing and maybe one or two reps and a BDR and see what kind of traction you get and then go from there. So, you know, dip your toe in the water before you jump into the pool. Yeah. Great sage advice, Brad. I really appreciate your expertise on this topic. Thanks again. Yeah, thanks for having me, Chip. Great chat with you. Yeah, absolutely. And hopefully we’ll have you back in the future. And to all of you at home, thanks so much for joining us and we’ll see you next time.

You may also like:

See all episodes
7 Types of Go-to-Market Strategies: Creating a Winning GTM Plan for Your Business
Using Digital Marketing to Launch an Account-Based Marketing (ABM) Strategy
The 5-step RevOps Model for High-Growth Teams (Revenue Operations)