In search for your Ideal Customer Profile (ICP)

Helpful frameworks and video tutorial inside

Dear GTM Strategist! 

Last week, I worked with a group of B2B SaaS entrepreneurs in Graz, Austria. The question that most founders who are starting out asked at Q&A and networking was: 

“Whom to target first when we go to market?” 

It was such a right question to ask. 

Selecting the right target market is one of the most important decisions you must make on your go-to-market journey. Everything (pricing, product, positioning, channel, etc.) evolves around your choice of target audience. 

Something else happened. 

After my previous Substack, which was focused on Outbound, many entrepreneurs replied to me privately on LinkedIn and email: 

“I know we should be doing outbound, but starting out is really hard. I am stuck.” 

I was surprised to hear that. If you have existing traction, you can reverse-engineer your most successful segment and use outbound marketing to attract more similar companies. 

Today I will provide you with frameworks and hands-on guidance on how to: 

• Make target market decisions with confidence (confidence = empirical proof) 

• What makes a phenomenal “beachhead segment” (segment ranking sheet)

• How do you build a contact list for interviews or prospecting for outreach 

Let’s clear some nomenclature first: 

• Target market = a broader term used when we simply agree that niching down is the key to our differentiated go-to-market strategy and when we finally drop the idea that “the product could help everybody”. It can eventually, but first, we must create some traction and make some money. 

• Beachhead segment = a section of the target market that you have purposefully selected to conquer first - a narrow segment with a high pain point, the urgency to react now (not in 6 months when they will have the budget), willingness to pay, and healthy growth potential that you can access easily. 

• EPC = Early Customer Profile - early adopters of your solution 

• ICP = Ideal Customer Profile - your actual target market, the early majority that will take you across the chasm and move you from the go-to-market stage to the growth stage 

• Persona/Customer archetype = a visual representation of your selected target market that makes its attributes easier to communicate and more actionable for other players in your go-to-market team and beyond. 

Theory over. Let’s get into tranches of selecting and validating ICP for real. 

Scenario A: You have little to no previous traction, and you want to maximize your chances of winning 

I am a huge believer in the Beachhead strategy.

What does it mean? Instead of scattering your efforts among the vast marketplace, you will get much further if you first focus your resources on a narrow target segment you can win in the next 3-18 months. Even tech giants such as Uber, Figma, Google, Amazon, and Facebook used beachhead strategy to gain early traction.

In this carousel, I briefly explain everything you need to know about beachhead strategy. Take a look here.

TL;DR:

An ideal Beachhead segment checks the following criteria

1. A burning pain point

2. High willingness to pay

3. Healthy growth potential

4. You can access it fairly easily (proximity)

5. Is a sub-segment of a larger market that you can expand to

For finding your best target segment to start, here are two tools that will help you:

• Segment ranking table will help you narrow down from 10+ to 3-5 hypotheses

• With our beloved ❤️ Market-Problem Map (it won Best Strategy Framework award by Miroverse), you will find the best candidate to test first among 3-5 candidates

You can test different segments using one or more of the following validation methods (I added tools to the list to make it more actionable)

Remember, if people say they love it, it does not mean they will pay for it. 

Interviews are useful for gaining deep user insights throughout your go-to-market journey. But if you want to be more confident in validating the early business model (willingness to pay) in addition to product-market fit, choose methods where prospects are actually showing purchasing intentions.

Do > Tell. 

If you have questions or want to dive deep into validating your target market and winning early traction, join me on May 8th at 16:00 CET for an expert panel Different stages of GTM: 5 myths and 5 truths. Emmet, Emilia, Samantha, and I will share hot go-to-market takes on: 

• Research + Planning

• Product Development 

• Marketing + Positioning 

• Sales + Distribution

• Feedback + Optimization

Register for free here and take your go-to-market strategy to the next level with us: https://us02web.zoom.us/webinar/register/4417137938113/WN_2wr4bKWPQdKGyIQmYzKgCQ#/registration

Scenario B: You have previous traction, and you can reverse-engineer your most successful users 

Many product leaders might come chasing me for saying this, but I will do it anyway. As a leader of bootstrapped companies that optimize for revenue and profit as early as possible (not thousands of free users before figuring out our business model), I would reverse engineer based on LTV (lifetime value) instead of activation, retention, and whatnot. I must build a sustainable business model and win early traction to take the company forward. Here’s the template of the scoring table I use: https://docs.google.com/spreadsheets/d/1nasUvb4tZV71NcKS_Ap6fGw3rqt0Ls79IjJKL9mf3a0/edit#gid=0 

What does that look like in practice? 

Simple. 

1. List down all the clients. 

2. Rank them based on annual recurring revenue. 

3. Add some other factors to the prioritization mix, such as growth potential, joy level when working with them, business ROI, etc. 

4. Ask yourself how to attract more customers that resemble the firmographic profile of your most valuable consumers.

5. Build a target list of companies.

6. Let’s go 🚀- reach out to them, publish a new advertising campaign or go where their attention already is (communities, events, relevant influencers, ….)

If you are not monetizing yet or following the strategy of optimizing for adoption, you can do the ranking differently, but the same logic applies. 

Let me show you what this looks like in practice. 

If I wanted to find more supporters for this Substack, I would do a profile of a “target supporter” based on the characteristics of those who currently make the highest supporter pledge. I could also add companies that are already supporting similar Substacks in the space and reach out to them since they are used to working with content creators and apparently have the budgets for it. 

Cool, cool, cool … 

Demo time 🥁🥁🥁

Here is how I build a list of such companies using the Clay data enrichment platform in less than 5 minutes. You can do this using their FREE trial. No more excuses, you got this! ✌️

That was not too difficult, was it? Take it for a spin yourself. 

Find more opportunities similar to your most successful clients in a couple of minutes. 

And … That is all, dear folks! 

Your turn: follow the guidance provided in a scenario that best suits your go-to-market terrain. 

Remember, doing and validating is better than guessing and being trapped in analysis paralysis. 

Confidence comes from your ability to find the right answers and solutions for your situations repeatedly. 

Let’s put in the reps, and one day, you, too, will share the wonderful story of how you successfully pivoted from early customers to ideal customers using a beachhead strategy. 

For more insights into this topic, listen to my GTM Strategist Podcast episode with Rishi Chowdhury.

Let’s go to market!

Maja

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