Market Segment vs Marketing Persona vs Ideal Customer Profile (ICP)

by | Jun 28, 2024 | Marketing Essays

market segment vs marketing persona vs ideal customer profile (icp)

An “ideal customer profile (ICP)” can work at the beginning of a B2B tech startup. It gets quick wins and early revenue. But it’s not enough for the long-term.

Generally, startups will try to sell to different types of companies and then see where they get the most and quickest traction. Then, they create a list of random attributes that those people or companies have in common. So, an “ICP” is “the perfect company or customer you want to target for your business.” It’s an ideal — it’s fiction. It’s a wish list of who you’d ideally want to target. But neither the world nor the market are ideal.

After all, an ICP is with whom you happened to have the best traction at the exact time you shopped the basic product around at the very beginning. If you had had a different feature, a different price, a different positioning, or a different anything else, then you might have gotten different traction and your ICP might have been completely different. (That it is better to analyze and segment the entire market first and then decide who to target. See further below. A specific segment might be willing to pay more, desire a specific feature, or something else.)

Further, the characteristics of the companies where you found initial traction may have had nothing to do with the reason for the traction. Perhaps the fact that they were a company of X number of people or in Y industry had nothing to do with the fact that liked or disliked your product. Those supposed commonalities are an example of correlation not equaling causation.

A marketing persona is a an ICP’s list of random attributes. First, you start adding more and more qualifications and you end up with a group that is so small that it’s not financially worthwhile to target them. How many real people or real companies in the real world would fit into that tiny, perfect box? Five? Fifty?

Second, creating a random marketing persona leads to this famous meme in the marketing industry:

marketing persona

It’s better to target an actual market segment that exists in the real world and then orient your company around that segment. Instead of having an “ICP” “persona” with random attributes, you can create real profiles of actual segments in the real world based on market research that have demographic / firmographic, behavioral, and psychographic information. Then, you can decide which actual segments in the real world to target rather than some fictional persona.

An “ICP” is creating a product and then trying to find a group of people who would want to buy it. A market segment is researching, segmenting, and then targeting an existing group of people and then orienting yourself around that existing segment. Market before product; not product before market.

Long-term marketing success comes from doing the research, the segmentation, and the targeting at the beginning. In other words, market orientation. Not fictional orientation around fictional ICPs and fictional personas.

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