Ideal Customer Profile (ICP): from guesswork to growth

Defining an Ideal Customer Profile (ICP) forces you to focus, prioritize, and hone in on your specific target market. It seems obvious: focus brings team unity and compounds the impact of everyone’s work. But, for many, the fear of focusing too narrowly creates hesitation to define an ICP, or worse, resistance to implement a common ICP. If this is you, you’re slowing your growth.

So, how do you balance the growth power of a clear ICP with staying open to unseen opportunities?

The good news is that others have done it, and you don’t need to reinvent the wheel. We’re going to dig into how ICPs drive growth and the practical side of implementation:

In this panel discussion, Madhav Bhandari, Head of Marketing at Storylane, Tom Randle, CEO of Geckoboard, Ingrid Bonde, Principal Investor at Oxx, along with Rachel Whitehead, former VP of Marketing at ChartMogul, discussed how to define your ICP, identify red flags, and use active listening and market insights to improve your approach for targeted, effective engagement.

ICP basics: what, when, how and why?

What’s an ICP?

An Ideal Customer Profile (ICP) describes the type of company that’s the best fit for your product. Typically, it outlines the industry, headcount, revenue, tech stack, location, and buying behavior of your hypothetical “ideal customer.” Your perfect customer is the type of company most likely to buy, get value from and keep using your SaaS product long-term.

When does a B2B SaaS company need an Ideal Customer Profile?

No matter what you think, as soon as you have an MVP, you’ll start making decisions based on who your ICP is. You only have so many resources (people, time, money), so:

Which primary use case do you put on your homepage?
Which features and integrations are you prioritizing?
Which customer logos do you put on your pitch deck?

These questions indicate what customer profile you’re really focusing on. Like it or not, you’re making decisions about your target customer from day one. The challenge is: when do you pause to consciously decide which ICP to go after first? Ideally, this happens once you’re taking your SaaS product to market. Keep in mind that your first ICP may not be your forever ICP. Getting started with an ICP assumption early will give you an advantage later in understanding your product’s space in the market.

In all the chaos of early-stage growth, many founders leave defining an ICP until much later, once churn, competing customers and conversion get stuck. If you’re signing customers across different industries and sizes but struggling to find repeatable success, an ICP helps you focus on the right ones. If your team is chasing too many leads that don’t convert or retain well, an ICP helps prioritize the best-fit customers. And if existing customers are churning quickly, it could be a sign you’re attracting the wrong ones. A clear ICP ensures you’re bringing in customers who will stick around.

In short, if your growth feels unfocused, inefficient, or inconsistent, it’s time to define your ICP.

The practical guide to defining an ICP

If you’re defining your ICP before landing your first 10 customers, it will be an assumption-based ideal customer profile. This means you might start with one or two ICPs based on gut instinct, ready to validate.

Start by looking at the problem you’re trying to solve. Who experiences that problem?

Look at your expertise: which industry do you understand best? (Note: if there isn’t overlap between questions 1 and 2, look for an early hire/advisor who knows the industry well).

Book 5 discovery calls with people who experience the problem you’re trying to solve, whose industry you understand well and interview them about solutions and test your product with them. You’re looking for initial enthusiasm for your product, willingness to try it in real scenarios, and willingness to pay.

If you’ve got an existing customer base, the process to define an ICP will be data-led.

Enrich your customer list with demographic data, such as industry, headcount, revenue, tech stack, location, and any other factors that you believe will be relevant to your product.

Combine this with product data like primary use case/JTBD, product usage, how much they pay, how quickly they buy, ease of implementation, and importantly, churn.

Segment your customer base searching for patterns around which types of companies churn the least, pay the most, and have the easiest pathway to using your product. If demographic data is splintered, look at use case/JTBD as a way to group customers into segments.

From this, you’ll have a couple of ICP candidates. Test these internally with your team: is there an ICP that stands out anecdotally to sales as “the best type of customers to sell to,” or stands out to product as “the easiest customers to build for.”

“We started looking at who the customers are that we really want more of. We were looking at our retention data, customer usage data, and also, gut feeling. (…) We probably had a dozen different customer profiles, but which is the ideal customer profile?” — Tom Randle, CEO at Geckoboard

In all cases, your next step is validation. First, you need to validate the size of the total addressable market of that ideal customer: is it big enough for you to grow your business to the next ARR milestone? Next, you need to think about how your strategy will change if you were to target this ICP. How would the roadmap change? How would the website change? How would your pricing change? Assess the delta between where you are now, and where you’ll need to be. If it’s small, take the leap. If there are major, months-long changes needed, consider whether you need to phase the transition. An ideal customer profile is a tool for focus, not a reason to stretch your team beyond what’s realistic today.

Still not convinced? A classic chicken-and-egg problem

“Churn is totally governed by the kind of customers that are coming in and whether they’re a good fit.” — Tom Randle, CEO at Geckoboard

You can build the best onboarding experience, offer incredible support, and still suffer from high churn, simply because you’re bringing in the wrong customers to begin with.

A clear Ideal Customer Profile (ICP) acts as a filter. It helps sales know who not to sell to. It helps marketing avoid spending budget attracting the wrong leads. And it gives product teams the clarity to prioritize features for the users who actually stick around and grow.

Without a defined ICP, you’re flying blind: overloading your pipeline with bad fits, stretching your resources thin, and setting yourself up for disappointment when those customers inevitably churn.

If churn is a lagging indicator, your ICP is a leading one.

ICP implementation: how to know when it’s working

You’ve defined your ICP, hurrah! This means nothing until it’s implemented across your entire organization. This is not a marketing effort, but a full company strategy shift that will change how everyone makes decisions.

“ICP is cross-functional. If you haven’t announced it in all hands or debated in the management team, it’s probably not going to stick across the company.” — Ingrid Bonde Akerlind, Principal Investor at Oxx

Your first action is to train your teams on what the ICP actually means, and what it doesn’t. Then, help each function translate that knowledge into their day-to-day decisions. Here’s what that looks like in practice:

Marketing

The role of marketing teams is not just to generate leads, it’s to attract the right ones. Your ICP shapes where you focus and how you approach your marketing strategy and market research. That starts with having a clear, opinionated stance on your website and in your messaging.

“Marketing is less about “which leads are going after” and more about how we can be really opinionated on the website. How can we actually say: this is who my product is for, and this is who it’s not for. And theoretically, that should raise conversion rates.” — Ingrid Bonde Akerlind, Principal Investor at Oxx

Think of it as respectful disqualification. The clearer you are, the more likely your best-fit, valuable customers will lean in.

Sales

Focus is everything. If your ICP definition leads to dozens of buyer personas, edge cases, and slide decks, you’re doing it wrong.

“You can’t create five different types of slide decks for every single type of ICP that might land in your sales funnel.” — Ingrid Bonde Akerlind, Principal Investor at Oxx

A strong ICP gives your sales team confidence to walk away from bad fits-and spend more time closing deals with customers who are likely to grow, renew, and advocate.

Customer Success

“In PLG, the notion of “focus” can feel super deceiving because you can’t really control who swipes a credit card on your website, right? Like, are you going to kick them out? I think that’s why it can seem at first that there’s a discrepancy between needing an ICP and accepting that anyone can sign up for your product. But you also accept that they might turn out to be not the right user.” — Ingrid Bonde Akerlind, Principal Investor at Oxx

In product-led growth (PLG), your customer base is more diverse by default. Anyone can swipe a credit card and start using your product. So, how does ICP apply?

An ICP-aligned CS team knows who to prioritize. They’re clear on who’s worth nurturing and when it’s okay to let a customer churn because they were never a good fit in the first place.

Product & engineering

Your roadmap becomes sharper when it’s aligned to ICP. Instead of chasing requests from edge-case users, product teams can prioritize solving deeper problems for the target audience you’re trying to serve. An ICP acts as a lens for evaluating feature requests, shaping UX, and guiding beta programs.

For engineering, the ICP reduces scope creep. It provides clarity on why certain features matter, and which technical debt is worth paying down. It also helps prioritize scalability, reliability, or integrations based on the needs of your highest-value customers.

“A lot of people are coming in and we would still provide a good experience and a good product for them but it’s not where we’re really trying to push and invest in our engineering effort.“ Ingrid Bonde Akerlind, Principal Investor at Oxx

People Ops & Finance

Hiring plans, compensation models, and budgeting decisions should reflect your ICP strategy. Are you doubling down on enterprise? You’ll need different sales profiles and onboarding structures than if you’re leaning into self-serve. Finance can better forecast growth and churn when ICP alignment is high, and hiring becomes more intentional when teams know who they’re building for.

How do ICPs change as a company grows?

In the beginning, your ICP is more of a hypothesis than a conclusion. You’re guided by founder intuition, a few early customer interviews, and educated guesses about market gaps. At this stage, you’re optimizing for learning over efficiency, your ICP is likely broad and fuzzy, and you say “yes” to more types of customers just to see what sticks.

At this stage, your goal is to identify patterns among early adopters: who gets the most value and why?

As usage and revenue grow, you gain real customer data: usage patterns, retention, expansion. This is when you start to sharpen your ICP. Dig into the data and ask yourself: which customers are renewing? Who requires the least support but shows the most growth? What company traits (industry, size, pain point) consistently signal long-term value?

At this time, your focus is on fit, not just acquisition. This is where you start saying “no.”

You’re scaling. Your GTM motion becomes more repeatable. But with scale comes complexity: your one-size-fits-all ICP no longer works. You may develop multiple ICPs tied to different products, regions, or pricing tiers. Also, teams like sales and CS need more nuance to serve each segment well.

This is when you need to evolve from a single ICP to a portfolio of ICPs (but without losing focus).

You’ve saturated your initial niche. Growth now means entering new markets, serving new verticals, or upselling new products. Your ICP may shift based on a strategic pivot (e.g. from SMBs to mid-market), a new product line or pricing model, or a competitive pressure forcing repositioning.

Your job is to realign the company around your updated growth vector. This might mean retraining teams, updating messaging, or rethinking your funnel.

Signs it’s time to revisit your ICP

Churn is rising despite strong onboarding.
Your best customers look nothing like your average lead.
Sales cycles are getting longer with lower close rates.
Teams are unclear who the “ideal” customer actually is.

We “sell to everyone” and 3 other painful ICP mistakes

1. “We sell to everyone” (aka: the fastest way to grow… churn)

When you try to be everything to everyone, you end up resonating with no one. Without a clear ICP, every team pulls in a different direction, wasting time, money, and energy on customers who were never a good fit.

“Be brave. Point all your arrows in the same direction.“ — Rachel Whitehead, former VP Marketing at ChartMogul

Clarity feels risky, but it’s actually the safest bet for sustainable growth.

2. You forgot to wake up and smell the coffee

Markets change. Customers evolve. Potential customers change. A great ICP one year ago might be outdated today. The biggest mistake? Ignoring the signals, like shifts in behavior, new competitors, or macro events.

“You have to react to the world around you, whether it’s a global pandemic or a new player eating your lunch.” — Madhav Bhandari, Head of Marketing at Storylane

A static ICP in a dynamic market is a liability. Make reviewing it a habit, not a panic response.

3. You think the ideal customer is just one customer

ICPs aren’t supposed to be a single logo. They exist on a spectrum. You’re looking for patterns, shared traits across a group of companies, not a mythical perfect fit.

“ICPs exist on a continuum. It’s never a singular company, but a segment with similar characteristics. Make sure your ICPs are useful.” — Ingrid Bonde Akerlind, Principal Investor at Oxx

Precision matters. But don’t chase the impossible ideal, build for the pattern.

4. You got your ICP wrong. Now what?

It happens. Maybe you aimed too narrow. Maybe you picked the wrong market. The answer isn’t to abandon the whole idea. It’s to go back, refine, and try again.

“If you get your ICP wrong at first, don’t give up. It might take longer than you think, but it’s worth it.” — Rachel Whitehead, former VP of Marketing, ChartMogul

Every failed attempt teaches you something. Just don’t stay stuck.

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