Why Your Startup Only Has Mediocre Clients (And How To Land Your First Unicorn)

If you don’t create an Ideal Client Profile (ICP) for your startup or tech company, your sales and marketing efforts will probably fail.

Your marketing will fall flat or under-perform because your messaging doesn’t perfectly resonate with any of the multiple audiences you’re reaching. You’ll fill your sales pipeline with unqualified opportunities and waste everyone’s time.

HipLead - Running Fail

In order to sell successfully, it’s crucial to define exactly who needs your product the most and to focus your sales efforts on companies who fit that criteria.

This article will show you how to build your ICP and give you real examples of ICPs for well-known startups.

So what is an Ideal Client Profile?

Your ICP is a quantifiable definition of your target audience. Which just means you define your ideal client in terms of objective parameters like the following:

HipLead - Sourcing Criteria

It’s the analytical equivalent of what marketers would call your customer avatar, and you use it to help identify which trees to bark up.

Building an ICP like this gives your startup a quantifiable way to predict how your relationships with other companies will turn out.

From a sales perspective: You’ll know exactly who you’re targeting. You’ll be able to create more focused content for your ideal client.

“By understanding how your ideal client makes [purchase] decisions, what sources they ask for recommendations and how they find an agency partner, you can mold your sales process to your prospects.
This will help you to better understand when a proposal is actually necessary, what type of nurturing campaigns you should set up, what information the prospect needs and when, and how often you should communicate with the potential client.” (Source: HubSpot)

You’ll also have a better sense of your sales cycle, your close rates and will do a better job forecasting revenue and closed deals.

From a customer retention perspective: If you understand which types of companies get the most value from your product, you’ll be able to demonstrate ROI easier and your clients will be more likely to renew.

From a customer success perspective: It’s been shown time and time again that 20% of our clients are responsible for 80% of our issues. If you build a tight ICP you can ensure that your company operates smoothly, by avoiding the types of clients who cause the most problems for your operations team and targeting your ideal clients instead.

So How Do I Build An ICP?

If you already have clients, you would build your ICP as follows:

  • Step #1: List out the specifics of your top 10 clients. See what they have in common to identify trends.
  • Step #2: Check your CRM. List out the specifics of opportunities that converted to deals, and of clients who renewed their contracts or purchased repeatedly.
  • Step #3: Look at your past email campaigns and identify the sub-audiences that responded with the highest interest. What did their parameters look like?
  • Step #4: Apart from seeing which deals have been successful, it’s also important to look at the unsuccessful ones. How do their parameters compare?
  • Step #5: Identify the clients that express a high level of interest during marketing and sales steps (even if they don’t close). Talk to sales and see which clients they think are likely to close. Also work with your customer success team to identify which customers are easy to work with and which ones create problems.

Note: If you’re missing some of the above-listed ICP data on your clients and opportunities, make sure you fill in the blanks before you analyze everything. Here’s how HipLead can enrich your data for you. The more data points you can pull, the easier it will be to find your ideal clients.

What if I don’t have enough clients yet?

If you’re an early-stage startup you’ll want to zoom in on your Ideal Client Profile as quickly as you can. It’ll take a bit of trial and error because you haven’t collected enough data yet, but the following is good starting point.

Start by asking this question: “Who has the most pain that I can solve?”

Do you know anyone like that? Try to convince them to buy. Then use trial and error to find the group of companies (grouped by the above ICP parameters), and the contacts at those companies who:

  1. Feel the most pain around what your product or service solves
  2. Are likely to become your client
  3. Are likely to buy from you repeatedly or renew their contract

This will be your Ideal Client Profile.

Note that you’ll have to monitor your ICP constantly and update it where necessary. This is a never-ending process of minor iterations, though it shouldn’t change too fundamentally unless you change your business.

Real-World ICP Examples

Below are some examples of pain identification on some well-known startups, to help you find your starting point.

Example 1: Gusto

Pain point solved: Running payroll sucks when you're not a payroll expert. Gusto makes it easy and intuitive.

Who feels that pain the most? Owners of small businesses with a few employees. They're already spread thin doing their regular jobs and are less likely to be able to afford someone to manage payroll for them.

Example 2: BaseCRM

Pain point solved: Field sales reps (who mostly use their smartphones) have different, specific needs that are overlooked by traditional CRMs. Most CRMs are designed with desktops in mind, for inside sales reps, but BaseCRM is #1 rated mobile sales app.

Who feels that pain the most? Sales managers and sales reps at companies with a large outside sales force that's always on the move.

Example 3: HipLead

Pain point solved: It’s expensive and time-consuming for companies to have their sales reps searching for their own leads. HipLead provides fast, high-quality lead lists, so reps can close more deals instead of wasting their time building lists.

Who feels that pain the most? Sales and Marketing leaders at B2B companies with an inside sales team, especially those selling to mid-market.

Don’t Miss Out On Your Ideal Client

HipLead - Runner and The Devil

Startups tend to think that if they focus on only one type of customer, they’ll miss out on all the rest. But the truth is this:

If you don’t focus on your ideal client you risk ending up without clients, or with clients that you don’t want. (Source: Lincoln Murphy)

So take the time to analyze your data and build out your ICP. It’ll give you the advantage of knowing which companies are most likely to buy, which ones will make the best clients, and which ones you should avoid.

It’s about being shrewd and cutting out the companies who are not near-perfect fits for your startup. It doesn’t mean that you CAN’T sell to those companies, but you have to understand that they aren’t your target market.

HipLead can help you close more deals through outbound. If you have any questions, use the below form to request a meeting with our team. We’re based in San Francisco.

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