How Do You Create an Ideal Customer Profile?
A new prospecting agency starts on Monday and asks for your ideal customer profile, so marketing fills in its template in an afternoon with an industry list, an employee range, a revenue band and three job titles. A month later the agency is booking meetings with companies that match every line, and your most experienced salesperson is turning half of them down for reasons the template never asked about, so it's worth going back to the start: how do you create an ideal customer profile?
To create an ideal customer profile, rank your existing customers by lifetime gross profit after the cost to win, write down the traits your best customers share, and name the traits of poor fits so sales and marketing can turn them away.
Most ideal customer profiles go wrong at the first step, because they start from a template instead of your own customer list, so the sections below start there.
How Do You Create an Ideal Customer Profile, Step by Step?
You create an ideal customer profile by working from your own customers' profit figures toward a short written description, then testing it with the people who sell, because your records already show who buys, what they pay and how long they stay.
- Rank your existing customers by lifetime gross profit after the cost to win, using two or three years of history if you have it. How to calculate customer profitability shows the calculation.
- Group them into the buyer types your sales team already recognizes and compare the groups, which how to segment B2B customers covers in detail, so you know which group the profile should describe.
- Go through the accounts in the top group one by one, noting the kind of company, who signed, what they bought first and what was happening in their business when they first called.
- Write down what most of them share, keeping only the traits sales could confirm early in a first conversation.
- Study the bottom of the list and the deals sales walked away from, and write down the traits of poor fits.
- Read the draft to your best salesperson and ask whether they'd recognize this buyer within the first few minutes of a call, then rewrite it in their words.
- Agree on it with sales and add it to the CRM as a field every lead gets marked against: fit, poor fit or unclear.
The IMPACT Prospect step walks through the same process. If you're entering a market where you have no customers yet, market research and conversations with likely buyers stand in for the first three steps, and the profile stays a working guess until your first customers' numbers come in.
What Is the Difference Between an Ideal Customer Profile and a Buyer Persona?
An ideal customer profile describes the company worth winning and the situation that makes it ready to buy, while a buyer persona describes the person inside that company: what they're responsible for, what worries them and how they decide. In B2B the profile comes first, because a well-drawn persona at the wrong kind of company still produces leads you can't profit from.
Ideal customer profile and buyer persona compared
| Compared on | Ideal customer profile | Buyer persona |
|---|---|---|
| Describes | The account | The person you talk to |
| Answers | Which companies are worth our budget? | What does this person need to hear? |
| Used for | Targeting, qualifying and saying no | Messaging, content and sales conversations |
In ProfitPaths® we write the two as one short description of the buyer we call the IMPACT Prospect, which is what the industry calls an ideal customer profile with the person and the poor fits written in. If you only have time for one, write the profile, because a persona with a stock photo and an invented name won't help sales qualify a lead.
What Should an Ideal Customer Profile Include?
An ideal customer profile should name four things: the kind of company, the person you talk to, the situation that makes them ready to buy and the signs of a poor fit. Each line should earn its place by explaining why that buyer is worth more to you, which is where template profiles built only on firmographics (industry, headcount, revenue band) fall short.
ExampleA commercial HVAC contractor's profile, and the ranking behind it
The example we follow across the site is a commercial HVAC contractor doing about $40 million a year, whose most profitable offering is a yearly maintenance agreement priced at $12,000 per building. Ranked by lifetime gross profit after the cost to win, one buyer type comes out far ahead.
Its written description of the top group: “Property managers and facilities directors at firms managing two or more commercial buildings within our service area, usually with HVAC equipment more than ten years old and no single service contract covering all their properties. Poor fit: tenants who don't control the building's systems, and any buyer who requires a public bid.”
- Property management firms
- $89,760
- Owner-occupied businesses
- $19,200
- Schools and public bids
- $6,400
Property management firms cost the most to win and still come out roughly 14× ahead of public-bid customers.
Most lines of that description trace back to what a customer is worth:
Why each line of the contractor's description is there
| Line in the description | Why it's there |
|---|---|
| Firms managing two or more commercial buildings | The agreement is priced per building, so a firm with several buildings under contract is a much bigger customer. |
| Property managers and facilities directors | Their firms want one contractor they can trust across every building and care more about response time than about shaving the price. |
| Equipment more than ten years old | Older equipment eventually needs replacing, which is where the contractor's installation work comes from. |
| Poor fit: tenants | They don't control the building's systems, so they can't sign the agreement. |
| Poor fit: public bids | Thin bid margins and a rebid every few years leave the least profit of any buyer type. |
The description has no employee count or revenue band, because for a contractor paid per building, the number of buildings a firm manages says far more about its worth than its headcount. A trait belongs in your profile when it changes what a customer is worth or whether you can win them, and sales can confirm it early in a conversation.
How Do You Use an Ideal Customer Profile in Targeting and Qualification?
Marketing uses the company and person lines of an ideal customer profile to decide where the budget goes and what the copy says, and sales uses the situation and poor-fit lines to qualify each lead early, so both teams judge every lead against the same standard.
- Targeting: choose keywords, job titles, account lists and partners by whether they reach the companies the profile names.
- Messaging: say on the page who the offer is for and who it isn't, so poor fits turn away before they cost sales any time.
- The offer and the form: build the offer around what the profile's buyer wants, and ask for the facts that confirm fit; how to generate high-quality leads shows how the contractor's form does this.
- Qualification: sales checks the situation and the poor-fit signs on the first call, and marks every lead as a fit, a poor fit or unclear.
- Measurement: judge marketing on fit leads, and tell the ad platforms which leads were fits, because in client accounts we've seen optimizing on a qualified-lead event instead of every form fill change who the platform finds.
ExampleWhere the contractor's profile sends its marketing
The contractor's channels are chosen to reach the property managers and facilities directors its profile names: Google search, LinkedIn targeted by job title, direct outreach to about 60 named firms, and the local building owners' association.
The poor-fit line matters as much as the rest because it lets marketing and sales say no on purpose, even to buyers who are easy to reach, like the contractor's public-bid customers, which were the easiest to find and the least profitable.
When Does an Ideal Customer Profile Go Wrong?
An ideal customer profile goes wrong when it describes the customers you wish you had instead of the ones that earn you the most, when it's too wide to rule anyone out, or when nobody checks it after it's written.
- It's built from a template and wishful thinking. A profile assembled from the industries you'd like to win has nothing tying it to profit, so its leads can match every line and still close rarely or pay back slowly.
- It ranks customers by revenue or deal size. The contractor's public-bid contracts were larger per year than a single-building agreement and worth the least over the relationship, because thin margins and rebids ate the difference.
- It has no poor-fit line, so every borderline lead turns into an argument between marketing and sales instead of a quick decision.
- It's so wide that nobody is ruled out, which you can test by asking whether it would have turned away any of last quarter's leads.
- It's never checked again, even though a new offering, a price change or a new market can change who's worth the most, so rerun the ranking when any of those change.
A profile matters less when every buyer is worth about the same to you, and it should stay loose while you have only a handful of customers, since an average drawn from a few accounts can't carry much weight.
Where to Start With Your Own Customer List
Pull last year's customers with revenue, margin and start dates, and rank them by lifetime gross profit after the cost to win before you open any template. The IMPACT Prospect step takes you from that ranking to a written description, with an IMPACT scorer and a lifetime value comparison prefilled with the contractor's numbers so you can put in your own.
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