How to define your ICP (and actually hit the bullseye)
Targeting is the backbone of your entire go-to-market strategy. Here's how to get specific enough to matter.
This month we’re going to focus on targeting! 🎯
This is the backbone of everything in GTM. And still, it’s something I see poorly defined really often — in companies of all stages and sizes.
Targeting is WHO you are selling to (your ideal customer profile and buyer persona), which is different from HOW you get them to buy (positioning). If you want to see how targeting fits into the broader GTM strategy framework, I broke that down in detail here.
Targeting and positioning are the core components that should direct your ENTIRE go-to-market strategy. Who we are selling to, and how we’re positioning our product in the market should 100% steer the brand (visually and verbally), marketing channels, sales approach, and service model.
Here is an image I love (and commissioned!) to give you a visual of good versus bad targeting…
And I really want to help you hit the bullseye.
So let's dig in.
Defining your ideal customer profile (ICP)
This week we’re going to break down how to properly define your ideal customer profile (ICP). Your ICP is the characteristic profile of the company you are targeting, which is different from the person within the company (your buyer persona).
What does a bad ICP look like?
“We sell to enterprises.”
“We sell to SMBs.”
“Our solution really helps anyone who needs accounting software.”
😑😑😑😑😑
NOPE.
Here’s what actually happens when you operate from a vague ICP like these: your sales team wastes cycles on deals that were never going to close. Your marketing messaging tries to speak to everyone and resonates with no one. Your product roadmap gets pulled in ten different directions because every new customer has a different set of requirements. And you — the founder — can’t tell whether a bad quarter is a people problem, a positioning problem, or a product problem because there’s no consistent target to measure against.
A vague ICP isn’t just imprecise. It’s expensive.
What does a good ICP look like?
In the simplest terms, your true ICP is the profile of the company who is…
→ Most likely to buy from you → At the highest price point → The fastest → And see the most demonstrable value (ROI)
Not who could buy from you ever in the entire world…
Who is the MOST likely to buy from you today, the fastest, at the highest relative price for speed.
A well-defined ICP often includes core characteristics like geography (either where they’re HQ’d or where they have offices), size (defined in terms of revenue or employee headcount), industry (perhaps defined using NAICS codes), funding stage (public, private equity-backed, etc.), technographics, and GTM focus (B2B, B2C, etc.).
But let me make this more tangible, because I find founders often understand the concept of specificity but struggle with what it actually looks like in practice. Here are a few examples:
A B2B SaaS company selling compliance software — “We sell to US-headquartered financial services firms with 200–1,000 employees, Series B or later, currently using Google for business. Our tier 1 targets have a dedicated compliance team of at least 3 people, and ideally a newly hired Head of Compliance (which signals they’re investing in the function).”
A vertical software company in healthcare — “We sell to outpatient specialty clinics with 10–50 providers, in states with recent regulatory changes around value-based care. They’re currently on a legacy EHR system and have expressed frustration with their current vendor on G2 or in industry forums.”
A fintech platform (more on this one below) — “We sell to mid-size money service businesses processing fewer than 5,000 transactions per day, headquartered in the US, with low implementation complexity and a 3–12 month expected sales cycle. Enterprise financial institutions are our long-term target, but our product isn’t ready for that level of volume or security requirements yet.”
See how different those feel from “we sell to healthcare companies” or “we sell to financial services”?
Using signals to identify buying triggers
Beyond firmographic and technographic attributes, you can layer in signals — observable data points that indicate a company in your ICP may be experiencing a buying trigger right now. Signals move you from “this company fits our profile” to “this company fits our profile and something just happened that makes them more likely to buy.”
Some of the most common signals to watch for:
People signals — senior leadership changes in certain roles, growth in a specific department’s headcount, open roles for a certain title or department (hiring signals)
Company signals — recent funding, layoffs, M&A activity, geographic expansion, overall headcount growth
Intent signals — engagement with your content, visits to your website or pricing page, attendance at an event, or activity in a review community like G2
These are all things you can identify with various tools in the market. I’ll touch on tools in greater detail later this month.
The power of pairing signals with your ICP is compounding.
For example: not just “fintech companies with 200+ employees,” but specifically those that raised a Series B in the last 6 months and just posted an open role for a Head of Compliance. The Series B is a funding signal. The job posting is a people signal. Together, that signal trail indicates a trigger — this company is investing in compliance infrastructure, which means your compliance software conversation just went from cold to warm.
How to tier your ICP when you sell to multiple segments
“What if I sell to multiple ICPs?”
Great question. Not all ICPs are created equal. And you can’t eat an elephant in one sitting. Aka… you can’t target them all simultaneously in an effective manner, especially not as a startup.
You have a small budget, and a small team, and you need to get really specific about who your tier 1, 2, and 3 targets are. And candidly, who is not a fit for your product at all right now — what would make a prospect disqualified?
Here’s one way to think about tiering:
Tier 1 is where you spend the majority of your time and budget. This is the segment where you have the strongest product-market fit today, the fastest sales cycle, the best win rate, and the most referenceable customers. This should get 60–70% of your GTM effort.
Tier 2 is a segment you’re actively testing or growing into. Maybe you have a few customers here but haven’t cracked the repeatable playbook yet. You’re learning, iterating, and building case studies. This gets 20–30% of your effort.
Tier 3 is aspirational. You know these are big opportunities, but the sales cycles are long, the product might need work, or you don’t have social proof yet. You’re planting seeds and having conversations, but you’re not building your revenue plan around this segment. This gets 10% or less.
Disqualified is just as important. What characteristics make a prospect a bad fit right now? Maybe they’re too small to afford your product, or they’re in a regulated industry you can’t serve well yet, or they require an integration you haven’t built. Being explicit about this saves your team enormous amounts of wasted time.
This will help your marketing, sales, AND product teams. Different client profiles are likely to have different feature and functionality requests, in addition to different buying motivations.
And maybe your product, sales, and marketing team is… YOU 😉. But you still need to get clear for yourself, your co-founders, and your engineering team.
Your product readiness should shape your ICP
Here’s something I don’t see talked about enough: your ICP isn’t just about who needs your product — it’s also about who your product is ready to serve well today.
I worked with a company that knew enterprise was their ultimate target. The deal sizes were bigger, the accounts were stickier, and they had relationships at that level. But when we looked honestly at where the product was, they couldn’t yet handle the volume, the security requirements, or the implementation complexity that enterprise buyers demand.
Rather than forcing it (and burning through credibility with enterprise prospects by delivering a subpar experience), they made a deliberate, strategic choice: focus 70–80% of their GTM effort on mid-market accounts where they could win fast and deliver well, while keeping 20–30% of their time on enterprise conversations that had longer sales cycles anyway.
What made this approach smart was the sequencing. They identified that their near-term ICP (mid-market) had product requirements that were a refinement of their existing functionality rather than an expansion. Building for mid-market didn’t just win mid-market deals — it created a bridge to enterprise by improving scalability and implementation tooling that benefited every customer segment.
Their operating tenets were explicit: primarily pursue mid-market opportunities with openness to build for them, continue developing relationships with enterprise prospects (since those are long sales cycles anyway), and only support out-of-ICP customers if no significant development was required.
That didn’t mean they stopped having enterprise conversations. It meant they were honest about where the product was, strategic about where to invest development resources, and disciplined about where to expect near-term revenue.
Your ICP should evolve over time
You can’t sell to everyone at the same time at the beginning. But over time, as you have more success, more revenue, more funding, a bigger team, and a more mature product — you can redefine and expand your ICP definition.
This could look like an initial GTM focus on mid-market money service businesses, followed by an expanded focus on larger-scale firms as the product matures, followed by a new segment launch for regional financial institutions, and so on.
The key is that this evolution should be intentional, not accidental. Revisit your ICP definition quarterly, using your win/loss analysis data to validate whether your current targeting is working or whether it’s time to expand. Your product roadmap should inform this too — when new capabilities unlock a new segment, that’s the time to move your tier 2 into tier 1.
How to define your ICP today
If you already have clients today, here’s the process I walk founders through:
Analyze your current customer base. Enrich your current client data with all of the attributes I listed above — size, industry, geography, funding stage, technographics — and look for trends. Almost always, you will see that 80% are in healthcare, or 60% are on the West Coast, or 90% were founded after 2010. Look for those trends and ask yourself WHY you think that’s the case. Why does that fact set make your product more attractive to them?
Conduct a win/loss analysis. Look at the deals you lost too. Why did they not pick you? In sales we call this a win/loss analysis and it’s a good practice for many reasons, one of which is ICP definition and refinement.
Map product readiness against segment requirements. Be honest about where your product is today versus what each segment needs. This is where the tiering framework comes in — you might want enterprise, but if your product isn’t ready, that’s a tier 3, not a tier 1.
Define tiers and allocate effort. Once you’ve identified your segments, assign them to tiers and commit to a percentage split of time and budget. Write it down. Share it with your team. Hold each other accountable to it.
Document your ICP and revisit quarterly. Your ICP is a living document, not a one-time exercise. As you close more deals (and lose some), as your product matures, and as the market shifts — your ICP should evolve with it.
If you don’t have any clients yet, hopefully you’ve done market research and user surveys or interviews to determine who you think has the highest propensity to buy your product. This is your ICP hypothesis that you should be creating to prove or disprove through your initial go-to-market efforts.
Questions? Shoot them over! You’ve got this!! 🎯
With love and gratitude -
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