Jan 27, 2022
Too often, the company’s ICP is an afterthought for CS teams. It’s easy to fall into being reactive, especially when you trust your Marketing team, or to ambiguously refer to the company’s ICP without holding anyone accountable for follow-through.
But acquiring the right customers is one of the first initiatives a Customer-Led Growth leader pursues. Good Customer Success teams proactively give Marketing the data they need to refine the company’s Ideal Customer Profile (ICP). Great CS teams take it a step further: they assign a Fit Scores to every customer, and use the ICP internally to identify and manage expansion opportunities.
That’s why we asked several leaders one question: What’s one action CS leaders can take to have a bigger influence on the Ideal Customer Profile? Hopefully their responses won’t just inspire you but give you something you can do today to immediately be more influential over who Marketing and Sales are targeting.
Here’s what they had to say.
RACHEL ORSTON, CCO AT SMARTRECRUITERS
Planning for the next quarter or year is a great time to revisit the ICP. The big question to answer is how your company is doing on the ICP. Where have you won, and how did that impact renewals or expansions? How many customers churned due to being a bad fit? Does the ICP definition reflect reality, or have the behaviors and characteristics of your best customers shifted?
Then, don’t just say, ‘We need to revisit this’. Be part of the solutioning too. That means coming prepared to make changes, and having the data to back those changes up. It’s the Customer Success leader’s responsibility to be the internal voice of the customer and use data to share the experience your customers are having.
Come to your strategic planning sessions saying, “Hey, this is where we’re seeing success. CMO, can I better understand our ABM strategy? Are we targeting the right people?” Or, “Hey, Here’s where we’re really struggling and finding friction. We need to revisit our marketing or sales process here.”
“There’s an opportunity to pause and reflect before we jump into next year and say, ‘Well, do our teams still know what makes for successful customers?’”
The CS leader must start this conversation, and they need to have a strong voice about what’s working and what’s not. Most CS leaders aren’t doing enough of that— we go right into OKR planning, we start with targets and back our way into them. There’s an opportunity to pause and reflect before we jump into next year and say, “Well, do our teams still know what makes for successful customers?” And that’s a great opportunity for the CS leader to show their ability to be strategic and bring the right data points forward to the rest of the executive team.
SHAWN RIEDEL, CS STRATEGY - PROGRAMS & OPERATIONS
I’m a fan of Ideal Customer Profiles (ICPs) with a Fit Score. That way, everybody has visibility into what customers we are bringing on board. Fit Score also allows me to plan for more resources to make a less than ideal customer successful.
The Fit Score needs to be agreed to by all pillars that touch the customer—Sales, Marketing, Support, Services, & CS. After all, they all benefit from adopting an ICP.
In theory, low Fit Scores will lead reps to find and spend more time on good fit customers. You don’t want to be the rep with all the low Fit Scores.
In practice, a Fit Score is similar to a Health Score. The calculation will depend on an organization, but the output should be a rating that is objective as possible with one subjective measure:
1. Segment your Ideal Customers—what are the criteria?
2. Weight those criteria. Start with 3-5 criteria on a 1-10 scale.
3. Assign the first Fit Score after Discovery. Update it as you learn more about the customer, their ability, and their goals.
4. Always allow for a panel from Sales & CS to talk about BFC’s (Bad Fit Customers). There will be some horse-trading to be had.
KATE WALSH, VP OF CUSTOMER SUCCESS AT KLAVIYO
Proactive data and communication is what CS leaders need to focus on. They should be leading the conversation and showing things like, “Look at these customers that are successful. If we sign up more of these types of customers, this is what our business looks like in 12 months, 24 months, five years, 10 years.”
And then on the inverse, CS leaders need to be equally intentional about sharing the data around what happens if the business doesn’t acquire customers that are a good fit. We’re all shooting to build that healthy business, so in your next planning exercise think about how you can get Marketing, Sales, and CS to better understand the ICP and the consequences of not following it. It requires building a plan together.
“CS leaders need to be equally intentional about sharing the data around what happens if the business doesn’t acquire customers that are a good fit.”
ALEX HESTERBERG, CCO AT DELPHIX
Customer Success is gaining more clout and influence on major strategic decisions, particularly as we go from subscription into consumption. Most companies now are trying to get more than 50% (sometimes as high as 80%) of their revenue for the year from their installed base. So as that shift happens, the most important thing is for CS leaders to have the confidence to influence and change compensation plans.
The CS and Sales organizations should both be compensated on renewals and expansion deals—although not necessarily at the same rate. There are different ratios your company may use, but both functions should be incentivized and compensated on both so that there is discouragement from selling deals and customers that we know are not in the ICP.
And at the same time, incentivizing both teams should drive a lot of alignment for going after the right profile and working together to get those companies not just renewing, but expanding.