Developing an Ideal Customer Profile Will Help You Define Who Your Business Should Target
In this ongoing series of articles concerning the five-phased agile business operations system for startups, Business Operating Support System, of BOSS, I have discussed the various steps in the development of the North Star. A startup’s North Star is the definition of the desired business outcome of your startup which includes what you are selling, why you are selling it, who are you selling it to and how you will exit.
Briefly, BOSS is an agile operating system that incorporates ideas and best practiced from the most effective methodologies in business, software and manufacturing. It creates efficiencies through a structured approach with five phases that set the vision (or North Star), strategy, execution, standardization and business improvement processes needed achieve alignment on company objectives, goals and measurable results utilizing leading and lagging KPIs.
The first phase of BOSS, North Star, consist of the above mentioned steps; What, Why, Who and Exit. In this article, I’m going to focus developing your ideal customer profile which is a subsection of the Who stage.
The development of your North Star’s Ideal Customer Profile (ICP) will focus on creating a clear and concise picture of who you are selling too.
To start, in essence, an ideal customer profile is a description of the company, not the individual buyer or end user that is a perfect fit for your offering. In developing your ICP, you will take a look at company revenue, company size and number of employees, industry and vertical, size of customer base, technology in use, geography, ownership, customers, products sold.
The first step in developing your ICP is to take a look at existing customers who have found your offering to be a perfect solution to their problem. If you don’t yet have customers, take a look at your closest competitors’ the companies that have adopted their solution. Next, you will examine each of the above mentioned criteria of these customers.
Let’s look at an example. This is fairly generic but it speaks to the above mentioned metrics and helps paint a clear picture of the ideal customer so that product development, marketing and sales outreach are all aligned.
Our ideal client is a B2B SaaS company in the U.S. or Canada that has a customer service team of at least 10 people and annual recurring revenue of at least $20 million. Their customer base is made up of small and medium sized businesses that require significant hands-on training and support.
This straightforward statements gets to the heart of who your company should be talking to, which market segments to focus on and, in addition, addresses the customer needs which can them be fulfilled by your offering. It further addresses the Who, What and Why you developed earlier in the North Star phase of BOSS.
The North Star and its incorporated elements is, perhaps, the most important step in the development of the five phases of your BOSS process. The other four phases, Strategy, Execution, Standardization and Improvement are difficult to implement without the clear starting point developed in the North Star phase. Put simply, it’s very hard to navigate anywhere without a precise map and clear travel plans.