Why ICP Marketing Works

Within the GTM community, a top discussion trend over the last several months has been the concept of ICP Marketing.  There are a number of posts and articles explaining what it is, different approaches to implement it, and the associated metrics it will improve.  The more ICP Marketing is explained and discussed, the more layers of work and impact we expose – and the more complex it appears.   With that complexity comes confusion on why it works.  

So lets take a very simplified look at the WHY:   ICP Marketing creates FOCUS and defines your PRIORITIZATION. 

The root of ICP Marketing is to perform regular segmentation performance analysis from your recent (18 to 24 months) funnel data to identity the best performing segments – those prospects (or customers) that convert at higher rates, buy at higher average contract values, and churn less thereby yielding higher lifetime value and profits.  The top performing segments are arguably your “ideal customer profile”. 

By ranking those top segments, you can develop ICP tiers across each GTM revenue stream…for an ideal GTM, those tiers are the same for customer acquisition, expansion, and retention motions.

Focus, our first “WHY” factor, is a result of building your GTM strategy based on the top few tiers.  Your Marketing, Sales and Customer leaders agree to invest a majority of their resources (people, budget and time) on these top performing segments.  With this shared focus, the leaders are also agreeing not to chase outliers, thus keeping the team’s efforts concentrated on the audience within these top tiers.  This concentration on fewer segments increases the quality (and productivity) of each function across the entire funnel – from messaging and content creation, to campaign development, sales enablement and retention motions.   

The second factor that makes ICP Marketing work is Prioritization.  This comes from the ranking of the tiers.  The SDR faced with 100 different names to follow-up on can now add ICP Tier to sort who to call next.  Similarly, the Solution Consultant or Sales Engineer will better understand which demo to prioritize.  Using the ranked tiers as the prioritization guidelines, coupled with SLAs, simplifies the decision making process at each stage. Again, we see an increase in productivity and the quality of the outcomes as the effort is going into completing the action, not deciding what action to take.

While this may seem to be an oversimplification of how Focus and Prioritization work together to make ICP Marketing successful, it's hard to argue with the basic logic – fewer things to focus on and clear decision guidelines yield higher output.   In this case, the higher output is more efficient growth – the resources invested in your ICP-defined GTM create a higher total ARR.  That sounds like an ideal GTM strategy!

More to come…

Over time I will share more thoughts and ideas related to GTM trends and practices that enable efficient growth.

I welcome your input and questions to guide that sharing.