Do You See what ICP – with Jim Hopkins and Tory Kindlick

Speaker

Jim Hopkins is a Revenue Architect at Winning by Design. Jim is a San Francisco based Marketing specialist, with nearly 20 years of experience! He received an undergraduate degree from Brigham Young University, and completed a MBA from Arizona State University. Jim is exceptionally talented at helping companies apply scientific frameworks to help Sales, Marketing, and Customer Success teams achieve and maintain growth.

Tory Kindlick is the VP of Demand Generation at Refine Labs. He has 15 years of experience in marketing. Tory recieved his undergraduate degree from Gettysburg College, and recieved an MBA from Saint Joseph’s University. He is a leader in growth marketing, strategic vision, and process improvements. Additionally, Tory is a loving father, husband, and ice cream lover.

Quotes

“If we can continue to deliver impact to customers, they will continue to pay us, and they will continue to renew… Because recurring revenue is such an important part of business today, we need to make sure that we’re targeting the right companies, the right people, that we can deliver that recurring impact, too.” 

Key Points

• Growth is a result of recurring revenue. 
• Targeting your ICP is the fastest way to secure recurring revenue.  
• Account based strategy helps align companies and move them towards the accounts that are most likely to be customers.  
• ICP’s need to be defined in qualitative and quantitative measures.  
• ICP’s can change over time, just your company can change. You need to review and redefine your ICP regularly.  

Transcript

Jim Hopkins:
Hey, everybody, welcome to our session today. My name is Jim Hopkins. I’m from a company called Winning by Design. I’m a revenue architect there, and I’m joined by my friend Tory. Welcome, Tory.

Tory Kindlick:
Hey, what’s up, everybody? Tory Kindlick from Refine Labs. I am working with a number of B2B SaaS clients and helping them with some revenue generation content strategy, among a number of other things, but happy to be here with you all today.

Jim Hopkins:
Awesome. Thanks. Super glad you’re with me today. We’ll be talking today about ICP’s our session. Cornely titled What Do You See what? ICP So we’re going to talk about ICP’s, what they are, how to create them, Some tips that we’ve learned from, like Tory said, helping other B2B companies to define this a little better with strategy, with tactical recommendations.

So, hopefully you find some value from this session today. So the first question that I’ll dig into here or the first kind of topic is some of the shifts that have moved us more towards needing an ICP. Why is an ICP important today? We think there’s three fundamental shifts in modern B2B that have really necessitated a greater focus on ICP’s.

The first one is the shift towards recurring revenue, and I think a lot of us have felt this. If you’re the age that some of us are, you’ve seen the shift from maybe a traditional funnel, one that’s a little more transactional, that models acquisition a little more heavily and is focused on maybe what used to be more, kind of perpetual license software, as we used to call it, where you buy it once and you own it forever. And this, this funnel maybe models that a little more accurately, but we’ve moved into a different era where we’ve had subscriptions and recurring revenue in SaaS. And what this focused on again was, was volume a little more so and a maniacal focus on closing deals like that was the effort that really was produced here and now they’re, you know, kind of causing some silos where marketing works on their part of the funnel. Pipeline development or prospecting or sales development works on their part of the funnel, and sales works on their part of the funnel.

It just kind of gets past down and we expect a lot of kind of leakage in that funnel. But what we’ve seen as we’ve shifted towards this recurring revenue SaaS software subscription model – we’ve seen that the old first principle of growth being the result of winning more deals doesn’t really hold up anymore. And we have to kind of tip things on their side.

We have to move to a different model. The model that we see working really effectively is this bow tie model, and the bow tie takes into account that more kind of initial transactional phase of the process, the customer acquisition, but it also considers the customer expansion, the onboarding, the growth of the customer into that equation, what we typically call the customer success part of the journey.

And what we realize is that there’s a new first principle in order here. So growth is the result of recurring revenue. We want to get people that continue to recur as customers continue to renew. Otherwise, we’re not a healthy business. We end up spending more to acquire that customer that we get back in revenue or profit. So, recurring revenue has to be a part of the equation now, and recurring revenue is the result of recurring impact.

If we can continue to deliver impact to customers, they will continue to pay us, they will continue to renew. And with so many choices out there today, if we don’t deliver recurring impact, they can move to a different competitor, a different solution, and they’ll stop paying us and we’ll be losing money potentially. So, because recurring revenue is such an important part of business today, we need to make sure that we’re targeting the right companies, the right people, that we can deliver that recurring impact, too.

If we’re bringing companies and customers into our customer community, that won’t renew, that won’t give us recurring revenue, then we’re really doing the business a disservice. So it’s not as much growth at all costs sell to everybody. You know, the FOMO, the fear of missing out kind of mentality where we have to close everything. It’s really about how do we identify the types of companies that will continue to be customers into the future, that will create a healthy business, that will create sustainable growth, and that we can deliver recurring impact for.

So that’s why an ICP is important for recurring revenue businesses, really all types of businesses, but especially for recurring revenue. And Tory is going to tell us about the second shift that he’s seen a lot of.

Yeah. So you can advance to the next slide, Jim. So the next foundational shift here is that buyers are more in control than they ever had been. And this is not something that is, let’s say, a new trend. This is something that has certainly been kind of happening more and more over the past, let’s say, ten years.

And so, one of the terms that you might have heard maybe you have is ‘dark social’, right? So what is dark social besides this kind of mysterious, provocative buzzword? Dark social really is an acknowledgment that much of the buying process is happening behind the scenes before sales and marketing are having a real impact on the purchase process.

Oftentimes a lot of the buying process itself is going to start by word of mouth in communities, slack channels, text messages with trusted friends or peers or colleagues. Not so much of the kind of traditional lead generation focused things that, you know, maybe had worked years ago. And so, with this foundational shift, with this acknowledgment that buying is happening behind the scenes in the background, and buyers are in much more control than they ever have been, obviously.

ICP’s play into this. Well, the main thing that you can do as a marketer, as a seller to acknowledge dark social and take advantage of this trend is to ensure that you’re creating content that is educational, helpful, relevant as possible to your ICP, to your target audience. And the best way to ensure that you’re creating relevant content is know your buyers inside and out.

And so, creating this ICP, this documentation, all of the information that we’re going to provide you with the how and the what in creating these ICP is going through these motions and creating this, you know, this, this ideal customer profile is going to be a great way to understand the type of content that is going to resonate with your buyers, so that you can create something that is going to survive this dark social foundational shift. It will be something that is shareable within these these these channels. And even if it’s not attributable, you can trust that if you are creating content relevant to your target audience that you know you are going to be able to make the right type of impact and at least try to help influence the narrative that is often taking place in these un-attributable channels and and communitie

Jim Hopkins:
Awesome. Yeah, totally agree. And I think of the idea that you can’t really speak to someone that you don’t know who they are. Right? Like you can’t really get their attention. You can’t develop a relationship if you don’t really know who they are. So the third shift that we’ve seen is that shift to an account based strategy.

You might have heard the term account based marketing, account based engagement, ABX, account based everything, whatever it might be. But we like the term an ‘account based strategy’ because it takes in really the whole revenue team, the whole go to market team, having a focus and an approach that’s more account based. Now in the past we, Tory kind of mentioned this, we might have had a little bit more of a focus on leads because leads created kind of the fuel for a lot of the new and fancy and cool tools that we had for automation and for email programs.

But again, that fed that kind of that transactional funnel model and it created those silos where, you know, leads were getting tossed over the fence and then trying to trying to work through them kind of in silos. In account based, what we moved to is more alignment across those revenue teams. And even in the customer success, how can we partner from the very beginning to create awareness with the right accounts that fit our ICP that we can deliver recurring impact too? And how can we help each other to create engagement, to create a great experience for those customers, to work with them, to reach them in dark social, to reach them in the channels that we own, the channels that we earn, and even the ones that we pay for. And then how can we move them along in them in an effective way through that journey of becoming a customer and expanding and becoming advocates for us?

So account based has shown a lot of great success in being able to do this – align companies and move them more towards the accounts that are most likely to be customers. Now, there’s pillars or foundational elements of account based strategy that we anchor on in our work with companies and helping them to move to this more account based view of the world.

And one of the fundamental pieces is a data foundation. That Data Foundation includes an ICP. An ICP, a central to account based strategy. You’ll hear that in the account base communities and circles and the technology vendors. They’ll they’ll hammer home the idea of having an ICP, knowing which accounts you should target, being able to understand that deeply with data, with, you know, qualitative understanding – we’ll talk more a little bit about that.

But really having that foundation makes everything more effective down the line. I’m able to align around those accounts, have a clear understanding of who they are, who I should target, having engagement that’s orchestrated. Tory talked about content messaging that’s aimed at the right accounts and then being able to measure and see, you know, the progress that I’m making against these specific accounts and making decisions and resourcing based on the accounts that I’m able to engage

So it all points back to that. ICP In my work with companies who are moving to this account based strategy, if we don’t get the ICP right, everything else kind of falls. So, really critical in account based strategy as well. And you might be interacting with all three of these shifts, you might just be interacting with one. Either way, if any of these things are touching you. If you’re a B2B company, they most likely are.

You need to really focus on ICP, make sure you work on documenting and getting an ICP. So we’re going to talk to you about the particulars of that and how you do it

Tory Kindlick:
All right. So, what is an ICP? Great question. And once you move out to the next slide here, Jim, where we’ve got this written out and defined. So, and ICP is this this mix of attributes, attributes, being demographics, firmographics, technigraphics, psychographics, any type of quantitative or qualitative data that= you can utilize to help you build a profile that’s going to help you understand not just who your customers could be, but who are your best fit customers. Who are the ones that are going to be the happiest that the solution that you have is going to really resolve the issues, the challenges that they go through from a day today basis, and the ones that are ultimately going to work with you for the longest period of time and effectively be the most profitable. So if you want to advance to the next slide, we can kind of dig into those attributes a little bit, right? So I mentioned the data, not just the quantitative data that can come from your CRM, your marketing automation platform, some type of external database.

But the qualitative data that comes from talking directly to your customers. It’s documented and well known, socialized throughout your organization, operationalized. So we’ll kind of get into some tips as far as how you should be thinking about utilizing an ICP within your CRM, and maybe even some of the scoring and prioritization that marketers and sellers are going to be using to understand where are these best fit customers.

Who should I be focusing on first? And obviously, there’s a lot of use cases around targeting for campaign development, campaign execution, and certainly from a reporting aspect as well. But, if you want to advance to the next slide, Jim, what it is not it is not your TAM, your total addressable market. So, the main thing to kind of consider here, right, is that you could market to your entire TAM, but you’re much better off focusing on a subset of that where, you know you can win, and you know you can provide legitimate value for your audience

And again, find those best fit customers that are going to stay with you for the longest period of time. So, you could certainly focus on your entire TAM, but that’s going to lead to a higher cost of acquisition. It’s going to lead to a lower LTV, lower lifetime value. And chances are you’re not going to be able to effectively and efficiently market to your entire TAM, whereas if you were to focus purely on your ICP and narrow that TAM in considerably, your cost of acquisition is going to go down, your LTV is going to go up, and you can feel confident that you’re going to be able to spend the right amount of time, resources, bandwidth, budget, finding those best fit customers and ensuring that you’re getting the people that are going to stay with you for the longest and get the most value out of engagements with you, your team, your product, your service. And so, I think, you know, really the question from here, Jim, right. We’ve defined it. We’ve talked about these kind of, you know, large macro shift

So how do you actually go about building an ICP? Why don’t you kind of dovetail into that from here

Jim Hopkins:
Yeah, absolutely. So a few steps we sit on a little bit already. Really, this takes two sides to make work. And there’s the quantitative and qualitative. So we’ll discuss that. We have a view of sort of the engine that you can use to kind of go into detail on creating your ICP. It starts really with that quantitative analysis using the data you have at your disposal.

And it is best done when you can take data from existing healthy customers, customers that you want to model from, you know, your best customers that have recurred, renewed over time, you’ve been able to deliver over impact to them, maybe the ones that have given you a case study and referred other clients to you. So take those.

Understand the core attributes of those customers, and then do some, you know, do some analysis on that data Look at the market, see how many cuts, how many accounts, how many people are out there like that. Really get a sense for what that ICP could be. What’s the kind of size of, in the scope of that ICP then what we want to do is shift to qualitative analysis.

So understand their psychographics like Tory talked about. We use a framework called “Spice” some of you may be familiar with. We want to look at the situation pain and the impacts that are really available to the customers that we want to target. And ideally coming from existing customers that have experienced pain when they first started talking to us, and that we’ve been able to deliver impact for, and what that impact was. The best way to do this is again to talk to those existing customers and have conversations

And then ultimately there’s some mechanics that we can use to enrich our account data base to do some scoring and prioritization. But really documenting and establishing that criteria, both quantitative and qualitative, is key. So just a really quick view at some of the templates that we use, some basic criteria like the core attributes, the core firmographics, if you will, of the companies that you would like to target .The geography, for instance, any additional attributes that may be custom, maybe something unique to the way that you do business that you want to look out for work with a customer here where you know, it’s like a value chain data point, a part of the distribution system that they work with. Technology is also a really key attribute that we can use to kind of differentiate and really pinpoint our ICP if they’re using a specific technology, like a specific CRM platform or marketing automation platform or ERP or whatever it might be. So documenting that is really important. This is also, you know, probably the basics.

You could go even deeper than this and add even more kind of profile attributes. Like to think about, you know, are they tech mature or tech laggards? Are they risk takers or risk averse? You could use some sliding scales here to kind of understand where they fall. This sort of starts to get into the qualitative, but then we do want to dove deeper into qualitative measures – Qualitative profiles

Their situation is is largely kind of the quantitative stuff that we’ve already discussed. So documenting that a little bit here. But then also, you know, what are the pains that they’re experiencing? This gets into, again, the psychographic elements. What impact are they looking for? What kind of benefits or results are they looking for when they solve that pain?

What are they hoping to get out of a solution? And this comes in two forms. It can be what we call emotional impact, and rational impact. Emotional benefits the person and specifically, you know, kind of the buyer’s or the personas that you’re working with. It benefits their lives, their day to day, their work life, their interactions with customers.

And then there’s rational impact that benefits the business primarily. So these tend to be the KPIs and the measurements that we might focus on, but we need to have both of those elements. We need to understand emotionally what we’re able to deliver for our customers and then rationally as well. We know humans make decisions emotionally and then justify them rationally.

So we have both of those pieces. And then critical events are there things that happen in their life that make that create urgency. A need to get a solution in place. And then what does a decision look like? Who are the people involved? What are the criteria? What are the decision process points that we need to consider? So thinking about all of this and then like I mentioned, talking to customers about it, validating it with customers who have experienced that journey.

And I promise you, even though you think you know what your customers went through, what pains they had, what impact they received, you will learn something through that process. Just talking to them, interviewing them, asking them the questions, having them reflect on that journey. It will teach you things that will be valuable for developing these profiles, but also for starting to develop messaging content, ways to target creative in your campaigns.

It will be super valuable. So I highly recommend going through the process of defining this, and then validating it with actual customers. Some other just really quick points as you’re going through the process of creating your ICP, it is important to get sales involved. We know that in account based strategy, specifically alignment is a big theme. But in every type of business, whether you’re doing account based or not, getting sales involved, getting their perspective from the front lines. What attributes work for them when they’re talking to customers? What customers tend to have really good conversations?

What do they see as commonalities in real life – like from the front lines? We also in all of this need to balance the the data that we’re collecting more kind of empirically versus the gut and intuition, you know, sometimes that we deal with when working with other types of teams or for field teams. So we need to balance that and make sure we’re checking that all the time.

But, we need to consider as we develop these ICP’s, it will potentially affect sales and how they go to market. So we need to involve them, help them have a sense of ownership of this, help them feel comfortable with the ICP and how it might affect their process. And then of course, once you’ve started to develop that ICP getting buy in from leadership, from broader teams that this will touch really the whole company. Ultimately, what you’re crafting here is the company’s charter for who will be our customers. So, everybody needs to have a stake in this. Everybody needs to be aligned on it. Leadership, most importantly, they need to be bought in and have their say on who the ICP should be. Sometimes they might have a sort of forward looking perspective, who we want to be our customers in the future.

We need to balance that as well. But the best thing you can do at this stage, and when you’re when you’re talking to leadership or working with leadership on ICP, is to craft something of a growth formula. You see the image I have here to the right. This takes in our bow tie in the different stages and conversion rates of the bow tie.

But ultimately we want to understand – what will it take at each stage to convert a single deal? What what inputs are required for a deal to happen? And, can we with our ICP, can we create enough momentum through that customer acquisition process to be able to hit our goals. This will help us understand a is the ICP big enough is it realistic.

Maybe it needs to be smaller, or maybe it can be smaller. We could focus on a smaller subset of customers. Or, do we need to focus on optimizing our process? Do we need to improve conversion rates from MQL to SQL, or do we need to improve closing skills or whatever it might be? We need to identify the areas where we need to improve because once we’ve locked in our ICP, those are the companies we’re going to focus on and we don’t want to be bringing in a bunch of volume to make up for the numbers that we have to hit

Because we started off with this certain ICP that ends up just kind of ruining the whole point, ruining our system and making the business unhealthy. The other thing I like to do is create a memorable name for our I have seen this bear fruits and you think it’s a small thing, but it really does give the team like it says here a banner to fly. If we say the Acme 3000. This is our ICP, the Acme 3000. We can use this internally as lingo when we have questions about who we’re targeting, we have questions about who we’re reaching out to or selling to. When we want to go to an event, we ask, ‘are the Acme 3000’ there or how many of the ‘Acme 3000 are at’?

That event helps us make decisions, helps us in measurement as well. When we reflect back on the quarter, how many of the Acme 3000 did we turn into customers this quarter? So I think it’s a great tool. It’s a great way. I’m a marketer, I like to brand things, so creating a brand for your ICP, I think is a cool way to go about it.

Next, Tory is going to talk about what if you had multiple ICP.

Tory Kindlick:
Yeah, and by the way, I like the Prestige Worldwide brand better, but that’s just me. There we go. All right. Here’s a scenario that you might have found yourself in as a marketer, right? As Jim just mentioned, you built this ICP, you have socialized it with the sales team, with the leadership team, and all of a sudden your ICP is going from one ICP to two ICP’s to three or four.

You’ve got multiple ICP’s, but you’ve got a limited amount of bandwidth, you’ve got a limited amount of budget. And so ultimately what you need to do is you need to figure out a starting point, where do you want to dedicate the most amount of your time and energy, and what maybe can take a back seat, or figure out if you can maybe handle a little bit later on in the year?

So what you see on the screen in front of you here – this came from a conversation that I was having with my colleague, Allison Lohman. She was reading the Alan Demi’s book, “The One Page Marketing Plan.” And sometimes there is so much beauty and simplicity. And so what this this PVP index that I’m showing on the screen here is all about is basically it’s a way that you can quantify very quickly which of your ICP’s should be the one that you prioritize and go after the first based on giving a basically a grade from 1 to 10 for the personal fulfillment, how much you enjoy working with this type of customer, the value, how much does this particular market segment value your work, your your solution, your service, and then the profitability, which of course is going to be extremely important as well. You know, how profitable are you with this particular segment? And so what you’ll come out with is, is a score that’s going to help you figure out where you can place your bets, where you want to focus your your time, where you want to dive in to first, because that ultimately is going to be the most impactful group.

And so, you know, many of us are going to be in situations where we have to figure out how we market to multiple ICPs. What you don’t want to do is try to market to all of them at the same time, because you run the risk of saying nothing, and marketing to nobody. Whereas if you figure out ways that you can break apart your ICP into subsegments and develop campaigns and messaging for each one of them, that’s going to be a better approach, that’s going to yield better results.And you can eventually hit all of them, but you have to start somewhere. And so this is a great way to figure out exactly where to start, and a really easy way to do it. Okay, so how do you use it? I’ll move through this one pretty quickly here, just because I know we’re probably running up on on time here for our session.

But couple that I want to call out right campaigns in targeting. This is my favorite place to use an ICP. Of course, there’s the obvious building out demographic targeting like within your paid media programs, but having that centralized profile that you can share with your team as you’re building out campaigns, as you’re maybe onboarding new people or bringing on agencies that are going to help having those that ICP documented is really going to help with a lot of your campaigns and targeting. To the same extent, content creation you can almost kind of bucket these is one in the same the campaigns, the targeting the content the better you know your customers, what they care about, the pains that they have and where you’re going to have the most success, the better that you can create content. And then, you know, the last point I’ll call out here is, is right within your CRM or your marketing automation platform. So the operationalizing and the the finding that source of truth that that scoring matrix, that prioritization, really finding a way to make it clear for everybody who touches your CRM – sales, marketing, operations – that it’s easy for them to ID your best fit customers.

Maybe there’s some type of custom object, some type of, you know, scoring model that you’re using, but ensuring that it is being utilized within all of these different databases in an easy way that you can report out on and that you can update from time to time. That’s really what you’re looking for here. And so with that, why don’t you move on to the last section here, which is how do you maintain this on an ongoing basis?

So I think the – on the left side of the screen, right, the ongoing maintenance, this is kind of going to be the daily and weekly things, not quite as prescriptive, but things that you want to keep in the back of your head, keep in mind. Right. But ultimately, you need to have systems in place that might be something as simple as the checkboxes or custom fields that I mentioned in your CRM that are going to help you identify which accounts are your your ideal customers are your ideal fit.

And it makes it easier to move accounts in and out of that, that kind of, you know, that ICP. So the quarterly refresh though is something that obviously you’re going to do every couple of months. Quarterly I think is a good rule of thumb. And so one thing that, you know, we work on with our clients is on a quarterly basis is conducting a win-loss analysis.

This is a great way to surface recent trends within your business that might help you influence some of the changes to your ICP. Maybe you’re seeing different sub-industries that are all of a sudden starting to engage more with your sales team or with your marketing campaigns. Or maybe alternatively, you’re seeing an area that you thought was a sweet spot previously that all of a sudden you’re getting less engagement and maybe isn’t as profitable or you don’t have the same solutions previously that that you do now.

And so, you know, understanding how these trends are occurring, analyzing the data and figuring out good ways to move accounts in and out of your ICP, you know, that’s something that you want to do every couple of months. And then let’s say the six month to annual cadence, this is going to be much more comprehensive and formal, right? So maybe there is additional customer interviews that you conduct. Maybe there’s some surveying of the marketplace.

But really, you want to factor in your your annual goals, your expansion targets, and how these play into your your marketing and sales efforts. And then figure out, all right, what does this mean for my ICP, does it need to evolve how regularly, does it need to evolve. What do we need to do in terms of moving accounts in and out and really, you know, getting much more formalized and systematized with this approach, you know, on the on the 6 to 12 month basis.

And so, Jim, why don’t you wrap things up?

Jim Hopkins:
Yeah, awesome advice. And I think we’ve covered a lot of ground. There’s a lot more we could have fit into this short time. But, if you’ve made it this far, hopefully the summary helps. I guess the TLDR we usually include upfront, but we save it for the end. Ultimately though, we talked about a TAM being different than ICP. ICP being the ideal we want to get to a total addressable market is great.

You know, sometimes we want this huge total addressable market. Really though, we want to focus on our ICP who are the customers we can actually sell to and who can we market to, and really get their attention of in the short term? Really, if you don’t have a well-documented ICP, if it’s not aligned and socialized and everybody’s aware of it, get it ASAP. We promise it’ll it’ll provide benefits. And then do the work to, to explore and validate quantitative and qualitative factors of ICP.

Make sure you have both sides of that coin. The qualitative one being the one that sometimes gets overlooked, or maybe assumed, and not validated with customer interviews. So go back and hopefully we’ve provided some ideas for templates and tools that you can use and then operationalizing the ICP in systems and programs, the things that Tory outlined just recently there, and of course don’t let it stagnate.

CP’s evolve just like businesses do. Companies evolve. The companies that you’re targeting evolve and they change, so your ICP needs to evolve as well. You need to take that quarterly, annually and even in real time approach to making sure your ICP is solid. So with that, we thank you for your time. We hope this has been helpful.

We hope you see what ICP and thanks Tory to you for all your knowledge, we appreciate it. Please feel free to follow us on LinkedIn or or reach out if you have questions. Tory, thanks again. Any parting words?

Tory Kindlick:
Parting words? Yeah, not all revenue is good revenue. So make sure that you’re going through this ICP exercise. Figure out who your best customers are. Your sales marketing the rest of your company is is going to benefit from it in both the short, intermediate and long term. And so best of luck. And yeah, feel free to reach out with any any questions.

Jim Hopkins:
Awesome. Thanks, everybody.