In today’s episode of The Startup Chat, Steli and Hiten talk about how to create an ideal customer profile.
Creating an ideal customer profile for your business is super important. It can help you build a better product, market it better and ultimately help you serve your customers better. But how detailed should you be when creating one of these?
In today’s episode, Steli and Hiten share their thoughts on what an ideal client profile is, why you should create one for your business, tips on how to create a good one and much more.
Time Stamped Show Notes:
00:00 About today’s topic.
00:24 Why this topic was chosen.
01:18 what is an ideal customer profile?
01:58 The goal of identifying your ideal client.
02:58 If you should pick an ideal client.
04:36 How understanding your ideal client can help you serve them better.
05:10 How companies sometimes misuse this concept.
06:10 How companies can use a customer profile.
07:15 If you should ignore a customer that doesn’t fit your profile.
07:37 Tips to help you create an ideal client profile for your business.
3 Key Points:
Identify what segment of the market can get the most value out of your software.
The goal of identifying your ideal client is to help you do better marketing.
If you don’t know who your customer is, you won’t know what to build, sell or market.
Steli Efti: Hey everybody, this is Steli Efti.
Hiten Shah: And this is Hiten Shah.
Steli Efti: And today on The Startup Chat we may or may not tell you to create an ideal customer profile or not to create an ideal customer profile, but-
Hiten Shah: Yeah, we don't know yet.
Steli Efti: But either way we are going to talk about the concept of an ICP, ideal customer profile. It's a very popular idea and it's one of those surprising topics that sometimes I can't believe that we haven't talked about something in almost 400 episodes. But we have not talked about this very specific topic, so I thought it would be fun to tackle this. Well, Hiten, maybe first we explain first to people what the concept is, like what is an ideal customer profile, why do companies do it? And then we might want to talk about why it's overused or misused and how we really feel about this topic in 2019.
Hiten Shah: Yeah, why don't you start. Why don't you define it, at least in the classic sense, because I think that will help.
Steli Efti: Yeah, so I think the broad idea is not that complicated. The broad idea is to ask yourself as a company ... There might be many, many different types of people or organizations that decided to purchase your software, but not all of them are created equal and I think the the idea with an ideal customer profile is to identify what type of customer, what segment of the market can get the most value out of our software? Who is the most ideal customer that exists out there, and what do they have in common? And the goal of defining and writing down an ideal customer profile is to help you do better marketing, do better segmentation, do better product development, because you're not taking on a broad group of people in terms of the feedback they give you, or a broad group of potential customers in terms of what channels would be most effective in terms of acquiring them. But you segment it down and you focus yourself and the entire company and team on the best 'customer,' the ideal 'customer.' You define it, you write it down so everybody in the company and the team understands it, and then you go after those customers above all others. Does that make sense? Is that a definition that you would agree with?
Hiten Shah: Yeah, I mean if you don't know who your customer is, you won't know what to build.