Ideal Customer Profiles can be your key to sales velocity, retention, recurring revenue, and CAGR (compound average growth rate). Have you also considered ICPs as your key to cost containment as well as EPS (earnings per share) growth?
Selling to the right type of customers makes everything better. Is your ICP truly ideal? Check-in with your Chief Operating Officer and VP-Customer Service:
- What are their biggest costs caused by customers? (refunds, escalations, complaints, inquiries, etc.)
- What types of customers are causing those costs? (what profile is NOT ideal)
When you check-in with these leaders who deliver the value that you promise, you’ll discover how your ICP must be fine-tuned or overhauled.
Your Business Development managers may not have considered the bigger picture of success: brand integrity.
- Marketing and Sales earnestly establish value propositions: what your brand promises customers will receive and what they’ll pay (money, time, etc.).
- You’re dependent on the rest of your company to deliver your brand promise.
- Remedial costs to serve and brand switching are signs of gaps in your brand integrity: what you promised doesn’t match reality. This is waste! Instead of layoffs, austerity, shrinkflation, etc., how about minimizing this waste?
As a start, CMOs and CCOs and COOs can work together to give guidance to Business Development for Ideal Customer Profiles.
CMOs and CCOs work hard to attract and expand customers, yet gaps in brand integrity can ruin your results. Good experiences are a one-to-one ratio between what was received versus what was expected. That’s how discount brands as well as luxury brands can both have raving fans. Thus, the key to growing earnings per share (EPS) is careful management of both expectations and what’s received.
The gap between what’s promised and what’s received, as seen by customers, is your brand integrity gap. Minding the gap is the ultimate purpose of a CCO.
CMOs set expectations for customer acquisition and CCOs assure expectations are delivered for customer retention. Both acquisition and retention are less of an uphill battle when you have high brand integrity. Here are 3 success factors:
- Setting the right expectations: Consistency is at the heart of trust and relationship strength. After you nurture potential customers along their buying journey, there’s the handoff to Accounts Receivable, customer onboarding, account management, Customer Success, Customer Service, Customer Loyalty, etc. This end-to-end experience of customers must be tightly coordinated for brand integrity — and consistently focused on lifetime value.
- Acquiring the right customers: What percentage of new customers match your Ideal Customer Profile (ICP)? Imagine how much cost-to-serve may be reduced via ICP customers (what I’ve coined as “core-growth customers”). Similar to grooming high-potential employees, CCOs should ensure stellar brand integrity for them. You need to “own” this customer segment. Get CX right with these customers first, and then expand your focus to accommodate other segments.
- Preventing gaps: This is a shared responsibility between Marketing, Sales, and Operations. And it relies on consistency across your entire enterprise and its ecosystem: suppliers, partners, etc. Even the darling brands have ongoing challenges as dynamics evolve. Think about Southwest, for example. A CCO/CXO overseeing brand integrity would be helping executives in all areas of the company’s ecosystem to foresee and prevent snafus like the 2022 holiday shutdown that is now costing Southwest dearly. Think broadly, be bold, and ally with every group that’s re-engineering processes or policies, leading initiatives, and making strategic decisions. Step-up and share CX insights with them in timely, actionable, collaborative ways. This is your purpose as CCO: be the indispensable imp on managers’ shoulder to guide unbreakable brand integrity.
Contrary to traditional ICP guidelines, the brand integrity key is to segment your customers by natural patterns. These are apparent in Customer Service chat and audio logs: what is your customer trying to get done and why, and what is their consequence for gaps? I’ve found there are 2-4 overall natural patterns. Use these to create expectations personas. Then, evaluate these natural groups’ revenue potential and cost to serve. This identifies what I call core-growth customers.
Core-growth customers as your ICPs are ideal:
- Their expectations match your firm’s strengths
- Positive word-of-mouth, recommendations, and repurchase are organic
- Cost to serve is minimized (Customer Success, Customer Service, Loyalty programs, CX programs, and lots of tech and staffing that go with these)
- Employee experience improves (less external negativity, less dysfunction)
- Investors gain more (higher EPS and CAGR that’s organically sustained)
Have you experimented with this approach?
Championing brand integrity is the ideal purpose of Chief Customer Officers. Who else is minding the gap?
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