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Defining Your Ideal Customer Profile

Many software companies fall into the trap of not defining their ideal customer profile. While it may be true that your product is a good fit for a variety of customers, it’s important to begin with a very specific target. Once you’ve nailed down your customer and figured out how to sell to them effectively, other customer segments will follow.

What is an ideal customer profile?

An ideal customer profile is a set of characteristics that, in a B2B software company’s case, define the type of company that gains the most value from your product. If you’re already started marketing and selling, you can use your current findings to develop your profile.

Use these findings to inform your ideal customer profile:

  • Who are your best current customers?
    • By renewal rate?
    • By referral rate or NPS score?
  • What problems did your product or service solve for your current customers?
  • Why did your current customers choose your product over competitors’ products?
  • What was the sales cycle for your best current customers? Did they inbound? What was the lead source?
  • What do your current customers have in common?
  • What don’t your current customers have in common?
  • What do the customers who have churned have in common?

Tips for creating your customer profile

1. Keep it narrow

It’s important to make sure your customer profile isn’t too broad or vague. Focus in on a type of company that will get the most value from your product. This allows you to target your marketing to a consolidated group of customers who are most likely to want to buy your product.

2. Define your value proposition

Defining a clear value proposition is another important part of developing your ideal customer profile. In the excitement of starting a company, founders can get caught up on what they like about their product, as opposed to the real value it provides customers. Developing a value proposition early on avoids this risk and helps you better target customers down the line.

Use a proven framework like this one from Strategyzer:

3. Interview companies in your ideal customer profile

Once you’ve developed what you believe to be your customer profile, confirm it. Speak to companies that fall in this profile to ensure you’ve identified the right customer segment and value proposition.

4. Flesh out your ideal customer profile

Once you have a good idea of your ideal customer, create a detailed description that anyone in your company can look to. This should include information on company demographics, needs, behaviors, skills, and industries. You should also know your ideal customer’s pain points, needs, and value add of your product in depth.

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