Ideal Customer Profile
Content:
The Ideal Customer Profile is an important concept in all sales and marketing activities.
- The Ideal Customer Profile - The 3 sets of profile criteria
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- Crossing the Chasm
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At TBK Consult we define the Ideal Customer Profile as:
The Ideal Customer Profile is a description of the type of client who has proven to derive most value from using our product or service relative to the effort it takes us to complete the sale.
Ideal Customer Profile
The Ideal Customer Profile
The TBK definition1 differs substantially from the “standard” definition in so far as the wording does not encompass concerns regarding budgets or active need. The TBK language seeks out the “objective” criteria, which make it possible to identify new clients, based on recognising characteristics shared with current clients who derive the most value from our product or services. We need to consider the cost of sales. Even though the larger enterprise customers would potentially derive dramatic value from our solution, the sales process may be too lengthy and too costly to achieve short-term revenue objectives. In addition, dealing with the political decision making systems at large corporations are a wellknown nightmare for smaller suppliers. The Ideal Customer Profile is used as the basis for defining your target audience: • •
Marketing messages are created for potential clients that fit within the parameters of the Ideal Customer Profile. Sales acquisition activities are based on lists of companies matching the Ideal Customer Profile.
The Ideal Customer Profile is a by-product of the definition of the Customer Value Proposition2.
The 3 sets of profile criteria The properties of the Ideal Customer Profile are divided into 3 sets of criteria:
Set 2 Set 1 Demographic properties are available in most prospect databases: • • • •
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• • • •
• Current solution environment (for example SAP, Microsoft, Info etc.) • Age of current solution • Expansion plans • Decision making structure • Decision making process • Characteristics of problem areas • Etc.
Set 3 Psychographics properties are related to the potential clients’ value and attitudes3, such as: • Ambition • Resistance to change • Openness to new technology • Quality Awareness • Cooperative spirit • Etc.
The standard definition talks about a customer who wants your product, a customer who has the ability to pay for your product and a customer who has the authority to purchase your product. As TBK is consulting with companies who sell high price technology solutions into a complex sales situation, the standard definition is not applicable. 2 Please see the TBK factsheet “Customer Value Proposition” (TBK-PFFS-002) 3 Please note that companies do not have values and attitudes, people have. You need to identify the decision centres and map the Psychographics properties of the people involved with the purchase of your solution. 1
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# of employees Annual revenue Industry Distance from you nearest sales/support representation International representation Location of headquarters Ownership Etc.
Sociographic properties are seldom available in commercially available databases:
Ideal Customer Profile
Crossing the Chasm
Although defining the Ideal Customer Profile is crucial to any marketing and sales activity it is particularly critical for new companies bringing solutions to the market and for established companies with successful solutions entering new international markets. The reason is simple. When acquiring solutions from new companies and especially when acquiring new solutions, the vast majority of your potential customers will look at your installed base. They seek comfort in the fact that there are already others with the same characteristics that have acquired the solution and are happy with it. This is called “risk mitigation” and is fundamental to the decision-making process.
Technology Enthusiasts
Visionaries
The Early Market
THE CHASM
This illustration is from the book “Crossing the Chasm” by the renowned author, Geoffrey A. Moore.
Pragmatists
Conservatives
Skeptics
The Mainstream Market
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The book deals with the challenge of bringing disruptive technology to the market. The principle, however, also applies to companies moving into markets where they are not yet known or established. Even though their technology is well tested and proven, customers in a new location will be sceptical and reluctant to be the first to take them on. Companies who have been very careful with targeting well-defined “Ideal Customers” will have a much easier time entering new markets. By leveraging relationships and experiences with the same segment in the new territory the threshold of resistance will be much lower.
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TBK-PFFS-003