One of the biggest mistakes startups can make at an early stage is not identifying their ideal customer personas (ICP). It is perfectly sensible though, as all your efforts at this stage of growth are usually being consumed with finding product-market-fit and acquiring anyone and anything that walks through your front door. By identifying your ICPs first, you will identify product-market-fit faster and identify the right customers to sell to.
To start, an ICP is simply a depiction of who your customer segments are – whether they are creative agencies of 10+ employees or corporations with 100+ employees, or both. It’s been reported by ITSMA that startups using ICPs have acquired more leads (24%), with higher quality (56%), and reduced their sales cycles (36%). Ideally, your startup has already identified a handful of ICPs, but no more than five as that will lead to a dilution of efforts among your teams.
So, how can your startup begin leveraging ICPs in your growth marketing? I’ll show you how by diving into methods that will first help identify your ICPs in an efficient manner, then demonstrate to you how to use their newfound segmentation.
I’m a big fan of surveys that measure net promoter scores and overall customer feedback, but I don’t believe these are the best formats for identifying your ICPs. In the early days of your startup you should be speaking with every customer you possibly can to better identify your ICPs. Obtaining such information requires more than a simple multi-select answer, or a ranking score from 1-10. Rest assured, I’ve created a three-tiered methodology (conveniently dubbed ICP!) for guiding the conversational and questioning themes you should be using with your customers:
When speaking with customers, if you follow the general principle of understanding pain points and what an ideal solution looks like to them, you’ll have a pretty good idea of which ICP they fall into. Instead of providing a generic script for your conversations with customers, which can often come across as robotic, I’ve laid out a few questions that fall into each category:
Let’s use Coinbase as an example. When I was a growth lead at Coinbase, we had ICPs that were primarily defined by how advanced customers were in their cryptocurrency journey. We had buckets of traders from those beginners just learning what cryptocurrency was, to advanced traders looking to stake all their Ethereum. In addition, we maintained a close handle on who these individuals were in each bucket demographically, and what their specific pain points were. Below is an example grid that leverages the ICP framework:
Example and simplified ICP analysis for Coinbase. Image courtesy of Jonathan Martinez.
It’s imperative to constantly speak with your customers as the types of personas can shift over time, which would necessitate changing your marketing strategies. Equally imperative is to understand that ICPs are not solely demographic information, such as ‘parents who live in large cities’, but instead should lean heavier on the attributes of their pain points.
Outside of identifying the qualitative attributes for each persona, analyzing the data will allow you to add usage layers for each segment. To do this, create cohorts of users based on behavior with variables, such as time spent, drop-off points and the usage of specific features. In the Coinbase example, we used this data to figure out when a “Beginner” moved to “Forward” persona: i.e., how many trades do they make before strictly investing outside of Bitcoin? Utilizing this data at Coinbase allowed us to push different features to users as they graduated between personas. Customer movement between ICPs isn’t the case at all startups, but this is one advantageous strategy to leverage if your startup falls into such a category.
Just as important as identifying your key personas is figuring out what are your anti-personas. Unless you are a corporate behemoth like Amazon and can cater to multitudes of diverse global populations at the same time, then you’ll need to identify which personas to stay away from. While consulting for a creator payments B2B startup, we were initially acquiring creative agencies among other companies, but eventually made the call to eliminate them from our ICP mix. We did so after determining that they were not finding value in our product. Defining this segment helps prevent the dilution of your message and allows your growth team to focus on your ideal segments. It also enables you to exclude those customers who are not a good fit and avoid wasting your resources on them.
Finally, I’ll walk you through how to put ICPs to use in your growth strategies.
Dollar Shave Club (DSC), a subscription-based razor and personal grooming products company, identified its ICP as men who wanted high-quality razors and personal care products delivered to their door at an affordable price. This was most likely their sole ICP in the early days before expanding to products such as deodorant and wipes. With growth efforts narrowed in on a singular ICP, startups like DSC are armed with the ability to craft hyper-specific content including:
I argue that startups with multiple ICPs benefit the most because they have collateral that’s unique for each cohort. Whether at a singular ICP or handful, the heart of the strategy should remain centered around copy.
Instead of running free with a spectrum of marketing copy, DSC narrowed in on being affordable and an efficient method to get new razors. In contrast, they didn’t chase customers who wanted quality or extra features such as Gillette’s DuraComfort swivel razor blades.
DSC w/ ICP defined: Razors at your doorsteps. Only $X/mo.
DSC w/o ICP defined: High-quality razors that feel amazing.
The difference is night and day. With their ICP defined, the pain point and solution are now clear: efficient and affordable. Without their ICP defined, they’re essentially competing against Gillette and all the other major razor brands, who already possess loyal customer bases.
This type of understanding means that copy is direct towards a particular segment and can help growth teams produce specific ads, landing pages and emails.
ICP fuels all of your marketing efforts. Image courtesy of Jonathan Martinez.
When acquiring customers that fit your ICP, it subsequently becomes much easier to locate more folks just like them. How? Below are just 5 examples:
Once you’ve mastered your ICPs and are leveraging them across growth collateral and campaigns, set a cadence to speak with marketing, as well as sales if B2B, to achieve the following:
The regularity of meeting about ICPs will vary based on startup maturity, but younger startups should be meeting either monthly or quarterly at the least.
ICPs are crucial to whether a startup initially focuses on the right segments or spreads itself too thin, leading to exhaustion of its resources. If there’s one takeaway from this entire column, it’s that you must identify your ICPs yesterday to set yourself up for success!
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