1CMO

Growth strategy | Advisory | Force multiplier

Ideal Client Profile (ICP)

There is No Excuse for Not Knowing Your Target

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“If you don’t know where you are going, any road will get you there.”

– Lewis Carroll

Two of the biggest mistakes I see leaders make when they are developing a strategic growth strategy involve the targeting of sales prospects.

The first mistake, and by far the most common, is simply not knowing who their target is.

The second, commonly found in early stage go-to-market organizations, is to assume everybody is a prospect.

The bad news: Many startups struggle with this, and it is sadly all too common for more established organizations as well.

The good news: It is not too difficult to develop a working definition for your organization.

Before diving into this topic, let’s start with a simple definition of “target market.”

Defining “Target Market”

Defining the target market for the products and/or services you are selling is a fundamental part of developing a strategic growth plan.

A quick online search will yield many definitions, here’s a pretty good one:

A target market is a group of customers within a business’s serviceable available market at which a business aims its marketing efforts and resources. A target market is a subset of the total market for a product or service.

Know Your Target

Developing an effective definition of your target market is one of the most significant, and often overlooked, leverage points in a go-to-market strategy.

What do I mean by “know your target”?

The logic behind this recommendation is straightforward – You need focus in order to be successful. Without focus, you will flounder in the marketplace and waste a lot of precious time and energy chasing bad deals.

Defining your target provides clarity for your team.

If you are very clear on your target then you also gain the luxury of focusing your limited marketing and sales resources solely on those targets. It is often just as powerful to know who is not a target, that way you can just ignore them.

Before getting in to details on “how” to develop a target market definition, let’s look at the other significant mistake many growth teams make.

“Everybody” is Not Your Market

It is very common in the startup world to hear excited company founders exclaim their market opportunity is almost infinite because “every company needs our solution.” (This is often supported by some lame back of the envelope math showing that they only need to convert 0.1% of the market in order to exceed their rosy sales projections!)

I have heard this many times from growth leaders and their sales teams.

Their enthusiasm and excitement is awesome.

As any venture capitalist or experienced investor will tell you, it is also very dangerous. Why?

Because, unless you have unlimited go-to-market resources, then every individual (for a B2C company) or every organization (for a B2B company) simply cannot be your target.

If everyone is your target, then your growth team will never gain the insights and experience they need to truly understand the prospect and deliver a meaningful value proposition.

You have to focus.

Ultimately, the life of your organization depends on it.

When times are great, many early stage organizations can get away with a loose or non-existent definition of their target market.

This kind of luck rarely lasts. It tends to get exposed by competition, exhausting the pool of early adopters, diminishing marketing ROI, or lack of sales skill.

Tips on Targeting

Most organizations find that they are able to create a working definition of their ideal target(s) with a small amount of effort. A great way to begin is with an analysis of your “best” existing customers, and using this as your starting place.

With a little more research, you can scan the broader marketplace to identify other logical segments that are also potential buyers for your products or services.

In marketing circles, this research is called segmentation, and the resulting definition is referred to as an Ideal Client Profile (ICP).

  • Knowing your market segmentation helps you prioritize opportunities and organize your go-to-market team and plans.
  • Knowing your ICP provides a great target for lead generation, it also helps you to refine the value proposition and messaging into tailored language that will appeal specifically to that ICP.

B2B sales organizations often choose to segment their market by readily available data points about their prospect organizations. This data can be publicly available, data you purchase, or data generated by your sales/marketing team. A few common examples:

  • Company size
  • Employee headcount
  • Annual revenue
  • Industry vertical
  • Geographic location or region

B2C companies may look at their potential buyer’s demographic data like age or sex, household income, home ownership, or geographic location.

Target or Die

For growth leaders and their go-to-market teams the imperative is clear: Know your target, or risk failure.

If you invest the time to segment your market and develop a clear profile of your ideal customer, then you will gain a huge advantage. Your marketing team will focus on generating more of the “right kind” of prospects, your sales team will close more deals, and the organization will grow.

This is win-win-win.

– Onward

About the author: Kimball Norup is the founder of 1CMO Consulting, a business strategy and growth advisory firm based in Sonoma, California. To read prior articles, or sign up to receive future ones by email, click here.

The 10 Commandments of Effective Growth Strategy

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“Business principles are only as good as the practices that back them up.”

– Chip Conley

Developing effective growth strategy is never easy.

The good news: While it is difficult, it is not impossible.

Fortunately, there are a few time-tested and proven growth principles. If you follow them, they will reduce your up-front time and effort while significantly increasing the chances of success.

Over the span of many years in growth leadership and consulting roles, I have enjoyed great success by following these simple, yet powerful, fundamentals. Now you can too.

If you follow these guiding principles, in sequential order, you will have the building blocks to create an effective growth strategy for your organization.

The 10 Commandments

Most of us are aware of the Ten Commandments, the set of biblical principles relating to ethics and worship that play a fundamental role in Judaism and Christianity.

While not quite as enduring or carved in stone like the original Ten Commandments, I believe these ten growth strategy principles can be very useful and informative for leaders seeking to grow their organization.

Here they are:

1 – Know Who You Are

This growth strategy commandment is first for a reason.

Why? In order for effective strategic planning to take place, you have to know who you are. In this context, “you” is referring to the organization.

This is your starting point.

Knowing the Core Ideology (Mission, Values, and Purpose) of your organization, and ensuring they are in alignment with your product(s)/service(s) and brand, is crucial for effective growth strategy.

If these elements are not in alignment, your growth initiative is highly likely to fail before it ever gets to see the light of day.

2 – Know Where You Want to Go

Every leadership team has dreams and aspirations for where they want to take the organization. Knowing your Envisioned Future (Vision, and Long-term Goals) is vitally important for effective strategic planning and execution.

As the old saying goes, if you don’t know where you are going, then how will you know when you get there?

Having clarity around your desired future state will provide focus, inspiration, and a convenient measuring stick to track your progress.

3 – Have a Plan

Once you know your starting point, and your intended destination, you are then in an excellent position to plot out a path forward for the organization.

In strategic planning, I call this stage the growth strategy thesis.

It is the product of all your understanding, insight, and best thinking about how you will navigate the Strategic Gap that exists between where you are today and your destination.

Your growth strategy thesis and plan become the roadmap you will use to reach the long-term goals of the organization.

Why is it a thesis? Because it is your best guess as to the path forward. The truth is you will not know until you start executing. Your strategy thesis is what you and your team are going to follow until you learn otherwise from market feedback. Then you can listen and pivot as required in order to keep moving towards your long-term goals.

There are many distractions for growth leaders when creating a strategic plan. The most successful ones focus on the fundamentals first:

  • Vision before strategy.
  • Strategy before tactics.
  • Focus on the big rocks first, in priority order.
  • Walk before you run.

4 – Get Real

Growth leaders need to practice a special kind of honesty.

This involves much more than just being truthful in our business dealings. Growth leaders need to have radical candor in assessing their organization, its product(s)/service(s), competitors, and the marketplace.

I call this getting real.

It plays out like this: If you are not real about your organization and the environment, then you are very likely to be unpleasantly surprised in the future.

Many of us have been witness to this kind of dangerous thinking in the business world. A few common examples:

  • “We don’t have any competitors.”
  • “Our customers love us.”
  • “ACME Company isn’t anything to worry about.”
  • “Every company needs our solution.”
  • “Our Widget is better than anything else out there.”

Successful growth leaders start their journey with deep introspection about the organization and the solutions they deliver to the market. After this growth assessment, they will also spend a lot of time out in the market gaining better Situational Awareness about the market(s) where they compete.

This level of honesty is the most important part of strategic planning. You have to put everything (good, bad, and ugly) on the table so that you can objectively evaluate it and plan around it.

Do not try to put lipstick on a pig…that generally only makes things worse.

Get real. If your product or service is crap, fix it. If you do not have the right team, make a change.

5 – Know Your Target (Market)

In addition to having clarity around long-term organizational goals, growth strategists also must strive to gain clarity around the target market for their solutions.

This often begins with market segmentation and analysis. Then, thinking deeply about where the organization can effectively compete and win.

These insights are often documented in the form of personas and an ideal client profile (ICP in growth parlance). Having consensus on this information is crucial in order for go-to-market teams to be able to do their jobs.

With personas and ICPs, marketing teams can define positioning and messaging, and develop appropriate lead generation campaigns. Sales teams can identify qualified prospects and know how best to close sales.

6 – Understand Your Buyer’s Journey

Knowing your target is not enough.

An equally important, and often overlooked, part of understanding your target market is to understand how prospects buy. This so-called “buyer’s journey” is the key to unlocking the puzzle of how to gain more sales, quicker.

Most go-to-market (GTM) organizations get this completely wrong.

Their mistake is to think that the prospects they have identified as ideal targets will fall into line and proceed stage-by-stage through the sales funnel that the sales organization has carefully designed. This is hardly ever how it happens in the wild.

Buyers are doing their own research, developing their own solutions, and working through internal approvals all outside of the view of sellers. In fact‚ Gartner research finds that when B2B buyers are considering a purchase‚ they spend only 17% of that time meeting with potential suppliers.

They are on their own buyer’s journey.

Smart sellers attempt to understand as much as possible about this journey, and then line up their sales process with the buyer’s buying process.

An important takeaway: Marketing enables sales. If you understand the buyer’s journey, you can then map the right marketing activities, educational content, and sales activities, to help coach and move the buyer along their buyer’s journey.

7 – Define Your Unique Selling Proposition

There are many ways to define value for a customer. However, one thing is true: If your prospect does not find value in what you are trying to sell them, they will not buy. Period.

In growth strategy, this is called a unique selling proposition (USP) – a clear statement that describes the benefit of your product or service, how you solve your customer’s needs and what distinguishes you from the competition.

Developing this can be a powerful sales tool. The absolute best sales superpower is to be unique. If there is no comparison, then you are free to compete on providing the best value for the client.

As one of my wise marketing mentors once shared with me, “an ounce of different is worth a pound of same.”

8 – Know Your Route(s) to Market

A crucial part of every growth plan is to know and understand your route(s) to market.

An organization can consider many different sales channels as part of their growth strategy. Selling directly into their target market(s), whether it is B2B or B2C, is the most common. Other channels include partners, wholesale, retail, OEM, etc.

Knowing your route to market is a fundamental requirement in order to define effective growth strategy.

In the earlier Buyer’s Journey commandment, I shared that marketing enables sales. Ensuring that marketing and sales are in alignment, and working in concert, is crucially important no matter what channel(s) you ultimately decide to use.

9 – Build a Scalable GTM Infrastructure

The ninth commandment is about building a solid foundation for growth.

We all know that you need a strong foundation in order to construct an enduring building. It is the same for organizations.

The GTM infrastructure for the organization includes people, process, technology, and data/analytics. Growth leaders must ensure the GTM infrastructure is both capable and scalable.

In the growth mix, technology can be a force multiplier if the core GTM tech stack (website, CRM, marketing automation, social media) are integrated. The goal of every growth leader is to make sure that marketing, sales, and client success are all working together effectively.

An added bonus to tech integration is that is allows us to measure everything. The ability to track and measure key metrics allows growth leaders to build a predictable revenue model, gain clarity on marketing ROI, and ultimately make intelligent decisions on how to optimize and grow the business.

10 – Develop a Balanced Marketing Plan

In order to grow the business, it is vital to have a balanced marketing plan. A consistent cadence of outbound and inbound tactics will help drive growth.

It is worth repeating this important concept: Marketing enables sales.

Marketing is an expense. For many organizations, it is one of the largest budget line items. However, with the proper metrics and accountability in place, it should also demonstrate enough ROI to justify the cost.

Unfortunately, marketing is often viewed as a one-time event. In order to drive consistent growth, you have to commit to an ongoing go-to-market process and a long-term plan. An intelligent balance of marketing tactics, consistently executed, is always the best path forward.

Avoid spreading your marketing efforts too thinly – if you are budget challenged it is much better to do fewer things, but do them well. You can invest more in marketing as your grow.

Go Forth and Conquer

Remember, there is no silver bullet for growth.

Growth leaders can dramatically improve their odds of success by embracing the wisdom of these 10 growth commandments and making sure the right team is in place. Some may find value in engaging a CMO to guide them on their journey.

-Onward

Six Business Growth Superpowers

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Leaders who want to drive growth for their organization have an almost limitless number of strategies and tactics at their disposal.

This virtually unlimited choice can be overwhelming for many. Reaching the point of paralysis for some.

Fortunately, I have found that a few “macro” strategies consistently rise to the top. These proven approaches have nearly universal applicability. Regardless of your industry, size, or growth challenge, deploying these strategies will create a solid foundation for growth. When you get them right, they become success enablers for more specific tactics and strategies to follow.

I call them the six business growth superpowers.

Here they are:

#1 – Have a Plan

This will sound crazy, but to get started on your growth journey it is important to first define the growth you want to achieve for your organization and have a basic idea of how you might try to accomplish it.

Such simple advice, yet very few follow it. Most people just dive right in, and start firing away. This “ready, fire, aim” approach often results in failure, wasted time and resources.

A better approach is to spend a little time to develop a basic plan of attack. This includes a quick survey of your strengths and weaknesses, and an assessment of the market(s) where you compete.

This important groundwork will provide direction and focus for you, and your team.

It does not have to be perfect. In fact, I can promise you it probably never will be. That is okay, because you will quickly learn and refine your approach based on real-world feedback from your market.

As part of your plan, you should also set a target. This definition of what you want to achieve will become your guiding “North Star” as you move forward in developing a more comprehensive growth strategy and plan, and will help you to measure progress along the way.

The great news is you do not need all the answers to get started. Pick a direction. Any direction, even if proven wrong, is better than no direction at all. You will quickly learn what works, and pivot away from what does not.

Ultimately, the power of having a plan for growth is it helps to prevent tactical and reactive thinking. Instead of “shooting from the hip” at every real or perceived opportunity that comes into your field of vision, you can selectively focus on those that are in alignment with what you are trying to achieve and likely to deliver positive results.

Considering if something brings you closer to your growth goal, allows you to be proactive instead of reactive.

#2 – Know Your Value

Many company leaders who are seeking growth do not understand what makes their organization special or unique in the marketplace.

This absolute cardinal sin will effectively prevent any effective marketing or sales from taking place.

If you cannot clearly articulate what makes your product(s) and/or service(s) different or demonstrably better than your competition, then how can you expect to be successful?

It is important to remember that your prospects always have many options, including the dreaded “no decision”. To grow you must always be connecting the dots between your unique solution, and your buyer’s pain, problem, or potential opportunity.

This is where sales happen, and client loyalty is born.

#3 – Understand Your Buyer

Once you understand and can clearly articulate your value proposition, you need to answer an important question: For whom?

By definition, in order to grow you are going to need to sell something. There are only 4 basic approaches to increase sales.

Regardless of which one, or combination of these strategies you choose, you will need to know who your buyer is.

The best way to define this is to think about what your Ideal Client Profile (ICP) looks like. For B2B sales, this means what industries, sizes of companies, and geographies are the perfect match for what you are selling? Also, within each of these organizations, who are you selling to? Create a profile (persona) that defines each individual.

The final step in understanding your future client is to create a model of your buyer’s journey. What triggers their need? How do they search for you? Decide to buy? How can you help them?

A great way to really understand your buyer is to think about their “job to be done” – What are they responsible for? What keeps them up at night? How can you help them to be successful?

The answers to these important questions will help you to tailor your value proposition message and close more deals.

Most go-to-market organizations focus only on making a sale. Unfortunately, too few organizations have a focus on client success. To drive growth, keep your eye on your buyer. Help to make them successful from the time they are a prospect to the time they are a client. You will sell more, and grow quicker.

#4 – Make It Easy

The “secret sauce” of high growth companies is a relentless focus on their clients.

The smart ones also think deeply about their process to gain new clients. They focus on optimizing the marketing and sales process, and making the buyer experience easier and more attractive for prospects.

This go-to-market mindset requires you to ask questions and translate the answers into a better understanding of the typical buyer’s journey and making every step as easy and frictionless as possible.

How can you make it easy for customers to buy from you? A few proven suggestions:

  • Educate them on how to buy your product or service. What are the key elements they should consider? Where have others failed?
  • Provide them with insights that help them to do their jobs better.
  • Walk them through a typical buying process, what should they expect moving forward?

Many growth leaders forget that sales is a two-way dance. Yes, you need to focus on making it easy for your buyer. However, what about the seller? Smart GTM organizations also try to make it easy on their sales team. Some ideas:

  • Revisit your sales process. Can you economize any steps? Are there selling tools (case studies, calculators, etc) that can help your sales team to be more effective?
  • Review your pricing and contracting process. Can you make it easier for your sales team to generate quotes?
  • Can you standardize as much of your contracting and approvals process as possible. Not only will your sales team appreciate the reduction in “thrash”, so will your prospects!

When you get it right, the go-to-market process becomes a virtuous cycle:

  • GTM Strategy enables effective marketing.
  • Marketing enables sales.
  • Sales enables client success.
  • Client success enables retention, expansion, referrals, and new growth!

#5 – Embrace VUCA

If the year 2020 has taught us anything it is that we live in stressful and rapidly changing world.

There is simply no escape from the many powerful VUCA forces in every industry and market across the globe. We must all get comfortable with VUCA, and learn how to quickly make decisions with less than perfect information.

Since we know they exist, and are not going away anytime soon, there is no excuse for not understanding and embracing these forces so that you can effectively counter them. There are many proven approaches for dealing with VUCA. Understanding your market, and developing a deep situational awareness is an important first step.

Perhaps the best strategy for dealing with the change and uncertainty in your market is to embrace it. Instead of allowing the market to dictate change, be proactive and lead the market. Be a catalyst for change. Adaptability is the antidote. Without it you are dead.

#6 – Take Action

Along with unpredictable VUCA forces, almost every organization is experiencing a faster pace of play in their market.

Everything from product lifecycles, to time to market, to delivery expectations, to innovations are accelerating. These trends are driven by technology, globalization, and aggressive competitors…all things out of our direct control. However, that does not mean we cannot manage them.

Organizations must learn how to accommodate this new faster pace. As referenced above, removing friction is certainly part of the answer. So is focusing on agility. Constantly pushing for doing things quicker, and better, at a lower cost.

What should growth leaders do? For starters, get out of the building, and into the market. They must also encourage their teams to embrace the ethos of MFGSD. By taking action and pushing through more cycles, you will gain the benefit of more learning opportunities!

To Infinity, and Beyond!

Any business growth problem or opportunity often has many different possible solutions to consider. Evaluating this vast “toolbox” of options is certainly part of the challenge (and for practitioners, part of the fun!) in developing and executing growth strategy.

There are many risks to avoid. Perhaps the most glaring is diving in without any direction or plan.

Knowing where you are today, and where you want to go tomorrow, is very powerful.

Developing a growth strategy and a resulting plan forces you to think deeply about your business, your operating environment, and the opportunities in front of you. With clarity around your value and your buyers, you can focus on selling more and leading the market instead of being a victim to external forces.

Take action today. Growth will be your reward.

-Onward

Why Your Biggest Competitor is “No Decision”

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“A business unit needs to decide what need it aims to satisfy in what group of people and with what value proposition that distinguishes the business from its competitors.” – Philip Kotler

The world of B2B sales is complex, difficult, and in our hyper-competitive global marketplace, it grows more challenging every day.

Every industry is undergoing transformation in some form, with many aggressive competitors chasing the same deals, and an overwhelming number of communications channels bombarding prospects with messages.

Each company has overloaded buyers, scarce resources, internal politics, and complex buying processes.

To make matters worse, the further up the enterprise food chain you go, the more challenging it becomes…resulting in longer and more complex sales cycles.

Bottom line: It is not easy to be a B2B buyer, or seller, in any market.

Unfortunately, because of this complexity many deals result in “no decision” – where the buyer ends up choosing to do nothing, rather than trust any seller or potential solution to satisfy their need.

It does not have to be this way.

While there is no single “silver bullet to growth“, there is a proven strategy smart sellers can use to increase their odds of converting B2B prospects to closed-won clients.

Even though this strategic approach is not difficult, the vast majority of B2B go-to-market organizations do not do it.

Why?

Because it requires them to think.

The Complexity of B2B Sales

Here are a few statistics I have heard over the last 12 months that illustrate how challenging and complex today’s B2B sales environment really is:

  • 90% of B2B web searchers have not selected a brand before starting their search. (Status Labs)
  • 57% of the average buyers journey is completed before there is ANY contact with a seller. (Gartner, CEB – Corporate Executive Board)
  • 74.6% of B2B sales cycles to new customers take at least 4 months to close, with almost half (46.4%) taking 7 months or more. 12-15 months is not unheard of for complex solutions. (Marketing Charts)
  • 10.2 people are now involved in the average enterprise buying decision. This is your “buying committee.” (CEB) – If you look at the deals at the end of your pipeline, how many members have you identified for each?
  • 40% of buyer journeys result in no decision. (CEB)

This is not a pretty picture if you are involved with B2B marketing or sales.

How do you navigate through this?

The answer is with better clarity and insight about your offering, and your buyers.

Clarity and Insight Lead to Better Messaging

There are three important insights you need to get started.

  1. First, you need absolute clarity on your offering – the products and/or services you sell. What are the benefits? The strengths/weaknesses of your solution versus alternatives? What results will your offering deliver? This is your value proposition.
  2. The next question to be answered is, what types of organization is ideally suited to be your next client? Will your solution work for any size company in any industry in any geography, or is it more targeted? Define your answer in the form of an Ideal Client Profile (often called ICP in biz dev circles!)
  3. Finally, get clarity on who your typical buyer is (or more often, the members of the buying group)? Begin to develop a “persona” profile for each, highlighting their typical demographics. You should also begin to think about how you could make the value proposition of your offering more relevant to each persona.

With these insights in hand, you can now begin to think about your messaging.

Consider the Buyers Point of View

Why is messaging so important? Because messaging is where we tailor the value proposition of our offering to something each individual buyer actually cares about, and is motivating enough for them to take action.

Until we do this, there is likely not going to be any sale.

A great way to begin thinking about this is to answer the following question: What is the buyer’s job to be done?

Ask this for each persona you have identified in your typical sales cycle. Then you can begin to think about their challenges. Their fears. Their concerns. What is preventing them from doing their job?

This will point you in the right direction.

Can you identify the specific pain, problem, or potential opportunity that your product or service will solve for them?

Sales happen when you can clearly demonstrate how your offering uniquely:

  • Removes or reduces pain
  • Fixes a problem
  • Creates new capability or opportunity

Once you understand the “job to be done” by your buyer and the client organization, then you can begin to shape your offering to win.

With this deep understanding of your buyer, you can position your product/service, and develop the appropriate messaging to communicate the unique benefits you deliver.

Without it, you are competing with every other loud voice in your market.

The Only Solution

Always remember that in every deal you are first competing against the opportunity cost of the buyer doing nothing at all.

Many organizations and decision makers arrive at a “no decision” outcome because the “pain of the same” appears easier, less expensive, less risky, or less disruptive than making a change.

You will lose to the status quo, the dreaded “no decision”, every single time if you do not clearly demonstrate the unique benefits of your products and/or services, and inspire them to take action.

As sellers, we have to show buyers that our solution will uniquely remove their pain, solve their problem, or deliver new value to the organization.

Unless you connect the dots between your offering’s value proposition and the buyer’s “job to be done,” and convince them that your solution is their only solution; you will likely not be successful.

Developing clarity on your value proposition, ideal client, and buyer’s “job to be done” are your secret strategy to developing effective messaging and greater B2B sales success.

-Onward