Why You Need to Focus on Your Ideal Customer

Five years ago, Warburg Pincus LLC invested in BetterCloud and urged us to work on a project to narrow our ideal customer profile (ICP). It's the most impactful thing I've ever done to improve conversion rates, shorten sales cycles, increase deal size and ultimately transform the company. A big mistake many CEOs make is believing their product is for everyone. It’s tempting. More potential customers should mean more sales, right? But in reality, chasing too broad a market drains resources, distracts your team, muddles messaging, confuses your product roadmap, and kills go-to-market efficiency. Being laser-focused on your ICP drives alignment across product, messaging, and the go-to-market motion. When the right prospect engages, they’ll feel like you built it just for them. Anyone who has built a product or service knows that the things a small business needs are very different than what a huge enterprise needs. A company is different from a school. An IT buyer is different from a security buyer, a sales buyer is different from a marketing buyer, a director level decision maker is different than a C level decision maker… but we still believe we can sell to different segments and personas as the same time. The process to define and use your ICP is relatively straightforward but does take time. The larger your business, the more data you have, the more resources you have to crunch that data the more time you should spend to do it as scientifically as possible. The high level steps are: 1. Build a Customer Dataset: Gather all your customer data. Current and churned customers, won and lost opportunities. Enrich it with firmographic, business-specific, and buyer demographic data. 2. Engage Your Team: Your best sales and customer success people hold invaluable insights about your most successful (and worst) customers. 3. Analyze & Identify Pockets of Gold: Identify common attributes of high-performing accounts and avoid the traps of poor-fit customers. 4. Communicate the ICP to the entire company with the “why” behind the attributes that make up an ideal customer.  5. Rework your messaging to appeal to your newly defined ICP and narrow your growth initiatives to be focused only on the accounts that matter.  6. Assign the right ICP accounts to your reps and ensure they’re focused on the right buyer personas. 7. Product Development: Reassess your roadmap to align with the needs of your ICP. You should see impact fast. GTM funnel metrics will improve. Conversion rates should rise, with better leads turning into stronger opportunities. You may not get more leads, but their quality will increase. I’ve been discussing this with many Not Another CEO Podcast guests, so don’t just take my word for it. I wrote a deep dive on how to “Narrow Your ICP and Transform your Company”, with real examples from other companies. You can read the full article here https://lnkd.in/e5EN3XSR

Want to know the $300k lesson I learned about ideal customers? Here's a story that changed how I think about finding the right customers: At a previous company, we had what looked like a perfect customer paying us $100k every year. But there was one small problem... They never used our product. Not even once. A sales rep had bundled it with another tool they actually needed. It took them 3 years to realize they were paying for something they didn't use. That experience taught me something important about finding truly ideal customers. Your best-fit customers aren't just the ones who pay you the most. They're the ones who: → Have a big problem you can actually solve → Get real value from your solution, fast → See clear benefits in what you offer → Stick with you for the long run → Make your team happy to work with them Here's what I've learned works better than just looking at deal size: Watch how quickly they get results. When customers see fast wins, they become your biggest fans. Look at how much they use your product. Usage tells you more about fit than contract size. Notice how the relationship feels. The best customers make your team excited to help them. When you find the right fit, everyone wins: They succeed. You succeed. Everyone grows. This simple truth changed everything about how I help clients define their ICPs. What do you look for in your ideal customers? #ICP

When I was at Salesforce, I stopped trying to win every client. It felt risky at first—like I was walking away from money. Instead, my results skyrocketed. Why? Because the fastest way to kill your sales career is to take on the wrong clients. Most sellers think picking your clients is a luxury. It’s not. It’s survival. The wrong clients drain your time, burn your energy, and hurt your reputation. They churn faster. They complain more. And they’ll keep you from working with the clients who actually move the needle. When I made the shift from needy seller to selective seller, my close rate went up, my revenue grew, and my stress dropped. Here’s the 5-part filter I use to pick clients—and when to walk away. 1. ICP first, always. Your Ideal Customer Profile is not a suggestion—it’s your guardrail. If they’re outside your ICP, you’re in “maybe we can make it work” territory. And “maybe” clients almost always cost you more than they pay. 2. They have a problem you can solve (or a goal you can deliver). People buy for two reasons: to escape pain or to reach a goal. If their pain isn’t in your wheelhouse, or their goal isn’t aligned with what you do best—pass. 3. Your service is a fit. Not every client problem is your problem to solve. If you have to build a custom solution that’s totally outside your offer, you’re signing up for resentment and scope creep. 4. They’re good humans. Life’s too short to work with jerks. If they’re disrespectful during the sales process, it will only get worse after the contract is signed. 5. They’re engaged. If you’re chasing them for replies before they’re a client, you’ll be chasing them for payments after they are. The less you need a deal, the more attractive you become to the right clients. The more you cling to every opportunity, the more you repel the clients you actually want. It’s counterintuitive, but when you put your time, energy, and attention on the right people… You close bigger deals, faster, and with less drama. Remember: You don’t get paid for the number of clients you close. You get paid for the quality of clients you keep. Raise your standards. Pick your clients. Protect your time. Your pipeline will thank you.