01 Mar How to Create an Ideal Customer Profile
Any company, no matter the size, should create an ideal customer profile. This is to ensure that the sales and marketing teams are working together to target the right market and turn more leads into sales. A customer profile can also be used by product teams to test whether they’re satisfying their customers’ needs by including the right features in their products or services, and then to make any necessary improvements. An ideal customer profile can even help a business to anticipate problems that may arise in the future so they can work on preventative solutions.
An ideal customer profile is a detailed description of a business’s ideal customer, containing everything it needs to know about who it should be targeting. It’s usually based on data from existing customers and will typically include personal details, such as their location and budget, the type of business they’re in and how they can benefit from the product or service that’s being sold.
With a B2B (business to business) company, the ideal customer profile will be a description of the type of company that’s likely to buy the business’s products or services. Whereas, B2C (business to consumer) companies will usually paint a picture of an individual customer.
Ideal customer profiles vary from company to company, and can be tailored to suit the needs of each individual business. You can even create multiple personas, depending on your business needs.
How do you create an ideal customer profile?
To create an ideal customer profile, first you should make a list of your existing customers and identify their traits, before speaking to them to find out how much value they get from your product or service.
Then you need to compare your customers, considering data like their location and budget and noting down any common attributes they have, and then create a behavioural profile based on their similarities.
Once you’ve created your ideal customer profile, you should have a clear picture of who your target market is, what their needs are and how you can convert more leads. Continue reading for more information on how to do this.
What are the benefits of having an ideal customer profile?
As a member of the sales team, it’s essential that you use your time effectively to convert as many leads as possible, instead of wasting time and resources chasing prospects who are unlikely to turn into paying customers. The best way for businesses to ensure their sales team is doing this, is to create an ideal customer profile, so they can identify the likelihood of a potential sale.
By focusing your efforts on the type of companies or people that are most likely to buy from you, you’re more likely to convert. Having an ideal customer profile will also encourage customer loyalty, as you’ll have a clearer idea of who you’re serving and how you can help them. It’s much easier to keep an existing customer than gain a new one, so you should make the effort to cut customer churn wherever you can.
This also applies to the marketing team. If their marketing strategy includes running a generic advertising campaign aimed at the mass market instead of its typical customers, the campaign is likely to be expensive and less effective. Customers are more likely to engage with specific adverts on platforms they use regularly, which means you will get a much better return on investment.
What’s more, creating an ideal customer profile isn’t just for your sales and marketing teams. The whole company should be made aware of who it is they’re targeting, to ensure that everyone is on the same page.
When should I create my customer profile?
It makes sense to create your ideal customer profile as soon as possible, so that you don’t waste time on futile leads. It can even be part of your company’s business plan, as it shows potential investors that you have a deep understanding of your target market.
A step-by-step guide to creating a customer profile
How to create this profile is up to each business, but to give you an idea of what to include, below is a step-by-step guide, which you can use as an ideal customer profile template.
Remember, though, that each company is different, so you can add or remove anything to suit your specific business.
Step one: Make a list of your best customers
First, make a list of your ten best customers. This isn’t always an easy thing to do, but when deciding who your best customers are, you might want to consider the following:
- The shortest sales cycle
- The lowest customer acquisition cost
- The highest customer satisfaction
- The largest number of renewals
- The most up-sells and expansions
- The most referrals
This is easier to do if you’re an established business. If not, you can make an educated guess based on whatever data you can gather about your current market or you can work on your prospecting to gain new customers.
Step two: Identify the desired traits
Your ideal customers should:
- Be in a position to buy your product or service
- Have the skills it takes to utilise your product or service to its full potential
- Be profitable enough not to cut corners
- Be planning to expand, giving you the opportunity to renew and upsell
- Have contacts in the industry, so they can recommend you to other prospects
Now, you should prioritise the ones that really matter. When doing this, it’s worth noting that your biggest customers aren’t always the best ones when it comes to creating your ideal customer profile. This is because a customer profile is only useful if you can use it to find other, similar prospects. An atypical customer is unlikely to be helpful with this process.
Step three: Research your market
The next thing you should do is find out why your best customers are the best.
Start by working out how much value your customers are getting from your product or service. Rather than making assumptions about the value you’re giving them, you should ask them directly via phone or email, or as part of a survey.
Some of the questions you could ask are:
- What return do you get on our product or service?
- What can we do to increase your satisfaction with our product or service?
- What are the best and worst features of the product or service we sell?
- Do you feel our product or service fulfils its promise?
A good way of getting your customers to talk to you is to demonstrate the value they’ll get from participating. If you say that the purpose of the interview is to improve the quality of service they get, they’re more likely to want to speak to you, as they’ll feel empowered by their influence as existing customers.
While interviewing your customers, you should also be asking yourself some of the following questions:
- How big is their company?
- Where are they based?
- What’s their budget?
- What problem is your product or service solving for them?
Step four: Compare your customers
Once you have a solid understanding of your best customers, you need to work out what they all have in common. It could be that they vary greatly in size, but they’re all in the same industry. Or they may all be based in a similar location – by the coast, for example.
You might find it helpful, at this stage, to look at data on customers you didn’t manage to close successfully. If you see traits that don’t match up with your existing customers, it’s a good indication that your ideal customer profile will work properly.
Step five: Build a behavioural profile
At this stage in the process, you should have all the data you need to create your ideal customer profile.
The way in which you collate your data is entirely up to you. But some of the basics that are usually included on an ideal customer profile are as follows:
B2C companies include demographics, such as age, gender, job title and income.
Firmographics are similar to demographics, but they refer to organisations rather than individual people.
B2B companies include firmographics, such as company revenue, company industry, budget, the number of employees, company location and organisation type.
These are the psychological traits that reveal a customer’s buying journey, such as goals, interests, values, hobbies and lifestyle choices. They’re more likely to be included on a B2C company’s ideal customer profile, than a B2B one.
These include the typical challenges a customer might face, making it easier to empathise with them and tailor marketing plans or sales pitches accordingly.
Products or services they already use
Including competitors is helpful as it encourages businesses to think about how they can convince customers to switch to their product or service instead.
How they like to be contacted
This ensures that time and resources aren’t wasted on chasing a response that will never come.
When considering which platforms they use, it’s also worth considering the type of advertising they engage with, so you don’t waste money on campaigns that won’t convert.
An ideal customer profile is a detailed description of a business’s ideal customer, containing data like their location and budget, the type of business they’re in and how they can benefit from the product or service that’s being sold.
Every company should have an ideal customer profile, so that their sales, marketing and product teams are aligned.
The benefits of having an ideal customer profile are that you’re less likely to waste time chasing futile leads, you’ll understand your customer better so you can turn more leads into sales, it encourages customer loyalty, your advertising will be more targeted and you can anticipate future problems and work to prevent them.
To create an ideal customer profile, first you should make a list of your existing customers. Then you need to identify their traits, before speaking to them to find out how much value they get from your product or service. The next thing to do is to compare your customers, considering data like their size, location and budget and noting down any common attributes they have. Finally, you can create a behavioural profile based on their similarities.
How you collate your data is entirely up to you, but some of the things you might want to include on your ideal customer profile are: Demographics and psychographics if you’re a B2C company, firmographics, if you’re a B2B company, pain points, the products or services they already use and how they like to be contacted.