The Kula Ring podcast is essential listening for manufacturing marketers who want to grow their digital presence and compete online.
Sponsored by Kula Partners—an agency committed to helping leading B2B manufacturers craft digital experiences that transform how they engage buyers, serve customers, and outpace their competition—The Kula Ring podcast features conversations about marketing, sales, and technology with top manufacturing executives from across North America.
The Kula Ring podcast is co-hosted by Kula Partners principals, Carman Pirie and Jeff W. White, both of whom are frequently sought after for their digitally-focused B2B expertise. They regularly share their insights with audiences including conferences like B2B Online and HubSpot’s INBOUND, the Gardner Manufacturing Marketer blog, and other podcasts focused on B2B marketing and technology.
Defining an ideal customer and sourcing a target account list to match should be easy, but it isn’t. On this episode of The Kula Ring, Jeff and Carman discuss how to craft an ideal customer profile (ICP), identify tools that can help, and warn about pitfalls along the way.
Defining Your Ideal Customer Profile and Finding Your Target Accounts Transcript:
Announcer: You’re listening to The Kula Ring, a podcast made for manufacturing marketers. Here are Carman Pirie and Jeff White.
Jeff White: Welcome to The Kula Ring, a podcast for manufacturing marketers brought to you by Kula Partners. My name is Jeff White and joining me today is Carman Pirie. Carman, how you doing, sir?
Carman Pirie: I am happy to be here, and you?
Jeff White: I’m doing great. Good to chat with you.
Carman Pirie: Yeah. Likewise. Likewise. I think, look, in today’s show I think we’re gonna… I guess this is the sentence that came to mind as we were thinking about today’s episode. I don’t know where I heard this and it makes absolutely no sense, really, but it kind of does.
It’s like, “when you’re a worm in horseradish, your world is horseradish.” I just remember hearing that because it’s so weird, like why am I talking about a worm in horseradish?
But I kind of feel like that’s kind of… I was recently kind of surprised when a pretty niche B2B company, very successful, was talking to me about challenges that they were having in generating a target account list, and I felt in that moment like, “Wow. I guess that’s just a world that we’ve lived in for so long,” like we’ve been in the worm in horseradish for so long that our world is horseradish. It didn’t really occur to me much that that would be something that people may kind of struggle to wrap their heads around or kind of understand exactly maybe how to go about it.
So, I guess that’s what spawned today’s show, is like why not kind of hit that head on and say, kind of step outside of our horseradish-
Jeff White: What you’re really saying, to bring another food reference and analogy into it, is that ICPs for us, or target account lists for us, are like Tootsie Roll. Everything we see is an ICP for me.
Carman Pirie: Exactly. Man, nobody gets that reference increasingly anymore, right? Yeah. Nobody remembers the Tootsie Roll ads from the ’80s anymore.
Carman Pirie: And you know that that is going to just unhook a torrent of highly relevant organic search traffic.
Jeff White: Always does, always does.
Carman Pirie: [Laughs] Okay, so folks, what we’re looking to talk about today is: what does it take to generate a target account list when thinking about ideal customer profiles? What does that really mean? How does that drive a target account list creation activity? And just generally speaking, I think we’re just gonna talk through it in a fairly methodical, step-by-step approach, really.
Jeff White: Absolutely. And I think one thing to get out of the way, and we have another episode we’ll link up, is that an ICP is not a persona. They’re not the same thing. It ain’t even the same sport.
Carman Pirie: Right. It has been said, and I say that because I think I’ve said it before, that it’s kind of like a-
Jeff White: There’s a rumor going around that.
Carman Pirie: Exactly. That they’re kind of like a persona for a company, or for an organization, which I think there’s kind of… I think that helps some people understand them. I mean, basically what we’re talking- because then you say, “Okay, well, firmographics are to a company as demographics are to a consumer or a persona.”
Jeff White: I’d say that’s accurate. I do think, though, that when people are thinking about specific personas they often narrow that in so far as to be useless, whereas I think ICPs generally try to be a bit more broad in nature in order to capture the extent of the total market that you can serve.
Carman Pirie: Yeah. If I wanted to be a little harsher I might say personas often editorialize and talk about what trucks people drive and things of that nature, which makes marketers think that they’re doing something clever and useful that will help drive content creation at a later date, but in reality it doesn’t do any of that. Whereas I think ideal customer profiles do tend to be harder working. So, what do we mean by that?
Well, we mean an ideal customer profile is a profile of the type of company that would be your ideal client or customer as a B2B manufacturer. So, very often for B2B manufacturers that means other organizations that fit within very specific NAICS codes, or standard industry codes as is sometimes used in the U.S., as well, so SICs, or sic codes. SIC codes is redundant, but still what people say because the C in SIC is codes, but nevertheless, so SIC codes or NAICS codes. Different types of industry classification depending on where you’re based.
And layered on top of that would be, I would say, from a firmographic perspective, like a raw data perspective, would be revenue and employee count. Those would be like from a just bare bones perspective the firm-
Jeff White: From a bare bones perspective. You might also have geography in there.
Carman Pirie: True, true.
Jeff White: We only serve North America, or we only serve the U.S., or something like that is certainly a common refrain with some manufacturers. That’s the bare bones, but obviously there is… It’s not editorializing like you might with a persona, but there certainly is the ability to shape that in order to achieve the kind of target account list that you really want to serve. Because you know, your ideal customer profile may not be your current customer profile.
Carman Pirie: True. Hopefully there’s not that big of a delta between those two things, but I understand what you’re saying. And you also, I guess looking beyond some of the standard numbers that we just mentioned, you may have situations where you say, “Yes, people within this industry code, with this employee count, and this geography, and this revenue, there would be an ideal fit—but only if they have an engineering team of this size or greater.” Or maybe, “only if they release an average of X number of new products every cycle or greater.” There may be different things that you know because of your experience of working within the category that there are kind of other elements, that may not be as easily found within a database.
Jeff White: Yeah, I mean, you’re not going to be able to know even if someone is of the appropriate revenue scale whether or not they would be purchasing your sort of minimum quantity of a particular product.
Carman Pirie: Right.
Jeff White: You know, we need to do $100,000 in this, or 100,000 units a year in order for this to be a prospect for us, so there’s that deeper level as well.
Carman Pirie: And it may even be capabilities. You may say like, “Okay, well, if they’re a metal fabricator, then they’re an ideal fit for us. But if they also do CNC machining, well then no.” That’s a type of thing that you could experience as a marketer in this space.
So then the question becomes, I guess, how do we make use of it? First of all, how do we kind of get that information? And I think it’s important to work with sales in this regard, and I should note that for organizations that are very prospect heavy—like they often are cold calling or other ways reaching out to people who don’t know of them, and trying to introduce themselves and get sales calls—those companies probably don’t need as much help in understanding what an ICP is. Because in some ways, they may not call it that, but they’re already defining this stuff on a regular basis as a way of generating net new target account lists for them to work.
Jeff White: At least on the sales side, though, I think there is still some newness to this concept on the marketing side. You know, a lot of marketing and sales departments that aren’t necessarily well connected. The marketers may not know that the salespeople are going after target accounts in this way or being this specific about it, or rather intentional about it.
Carman Pirie: Yeah, that’s a very valid point. Yeah, no, that’s true. I guess all I was trying to say is that, the marketer could probably shortcut a lot of things by talking to the sales organization there, right? In a more literal way.
Whereas I think in some ways a target for this episode of The Kula Ring is more the other folks, which I think are the majority of B2B manufacturers who are more farmers than hunters in the sales organization. An awful lot of relationship-based selling and things of that sort. And sometimes when you’re talking to those sales organizations you have to be a little bit more nuanced in trying to tease out what is an ideal fit customer.
Because you know, I don’t want to be too negative against sales ever, but I guess one of the things I would say is sometimes you might get an articulation of who are the easy accounts versus who are the most profitable, for example.
Jeff White: Right.
Carman Pirie: You know, sometimes they may be taking the easy ones, not necessarily the best ones.
So I guess as a bit of advice then, I would tell people to work with sales, understand what they see to be ideal fit customers, but also understand with your customer service and operations team. Not everybody that’s an ideal fit at the sales stage is an ideal fit at the fulfillment stage. That’s important to understand. And also work with your finance team and try to understand individual client profitability. Because the best ones to work with aren’t always the most profitable. And there’s some… You may be surprised at how that tends to push or nudge your definition of your ideal customer.
Jeff White: Yeah, and you might actually find patterns there, you know, in that the reason we’re profitable with these types of manufacturers that we work with is because they don’t need this particular add-on or something that really throws our production into a tailspin and causes delays. You know, like who knows? But you might actually be able to then find those little nuggets that help you to identify which ones are truly best fit target accounts.
Carman Pirie: And this is even more essential if your production is at or near capacity, and reasonably booked out. I mean, that’s I think an important part, because then it’s even more incumbent upon the marketing and sales organization to have that profitability lens because as you go to try to create demand in some way that outstrips supply, that allows you to make the overall operation more profitable, provided you know who you’re trying to fill into those slots that you’re vacating by, for instance, firing on profitable accounts.
Jeff White: Yeah. No, it’s amazing I think how rarely this kind of thing is discussed in marketing departments. Often, unless we’re talking about a CMO or a VP of Marketing, oftentimes this information hasn’t been readily shared.
Carman Pirie: You mean the profitability of customers?
Jeff White: Yeah, like that kind of financial data isn’t necessarily the domain of a lot of marketers in the space.
Carman Pirie: Yeah, that’s probably fair to say. It’s interesting too, I just think in the world of marketing we’ve kind of—kicked at the punching bag or whatever you might say, punched at the punching bag, or whatever that is—SaaS marketing, but you know, one thing SaaS marketers don’t have to really concern themselves with is production capacity.
Jeff White: Absolutely.
Carman Pirie: You’re selling subscriptions, Software As A Service, and so much of that SaaS conversation dominates marketing talk these days. And therefore conversations even of ICPs or what have you, or target accounts, those conversations are often absent these types of production considerations that a manufacturer needs to be mindful of.
Jeff White: 100%. So, knowing that—that you need to put that layer of reality and financial understanding against it in order to fully understand who is a good target account—how do you get them? Because, I mean, it’s not like… You can’t just Google this.
Carman Pirie: Yeah, so we’ve got a couple of buckets of things here, right? So, we have the firmographic information, the more data-driven stuff. Employee counts, revenue counts, NAICS codes. And then you have a collection of the really soft or harder to find stuff, i.e. they’re fabricators but they don’t do CNC machining. And then you have the profitability patterns that you may be discovering within an analysis of your existing customer base.
Jeff White: And one other thing I think, too. Another layer that can be added to this is your marketing calendar. If you’ve got a trade show coming up in a particular venue, that may determine how you… You could have a target account list for a specific trade show, you know? Or an event.
Carman Pirie: Yeah, of course. Yeah.
Jeff White: There are other things that could be coming into play here that aren’t-
Carman Pirie: Right. And I think that that financial information even, and trade show or geography information, that will tend to impact the data collection side. To simplify, it will change which toggles you toggle in collecting that data.
So, you may say, “Well, I know the trade show is in Ohio, so I’m only going to look for people in the Midwest,” as an example. So, those are filters that you can apply at the data collection stage, I guess.
And also, those profitability patterns will also often surface themselves in something that can be actioned there, i.e. you may find that you’re really profitable in one vertical but not so much in another. Or the real profitability comes within a sweet spot of revenue. So, there are a couple of different things that you may find there that can impact the filters that you apply in collecting that data.
And you know, you can collect that data by a collection of tools. There’s ZoomInfo, as a lot of people will know of. More sophisticated tools out there, like say maybe Dun & Bradstreet or something like that. There’s some of those other kind of database sources that people may be familiar with.
Jeff White: Demandbase. Yeah, Demandbase acquired InsideView last year and renamed it. It’s quite a good tool.
Carman Pirie: Yeah, so there are a number of those out there. And then the next layer to that is that there are a number of directory tools that are available only in certain jurisdictions, or only in certain categories or industries or what have you. One that comes immediately to mind here in Canada is the Scott’s Directory, which lists basically every manufacturer in Canada. Any search, if you’re looking for Canadian-based manufacturers, any search in Scott’s will be more thorough than ZoomInfo, or basically any other tool.
Jeff White: I think that geography question comes into play with some of these tools, as well, because some of them are certainly stronger in the U.S. than they are anywhere. In fact, most of them are stronger in the U.S. than they are anywhere else, but some of them don’t even collect data in Europe, for example, because of GDPR considerations.
Carman Pirie: Right, exactly right. So, important to take that into consideration, and as you’re doing this work understand that there needs to be a level of connection between the data sources that you’re using and the dynamics that they’re best at and what you’re looking to target.
Yeah, and the notion that you maybe need to be eyes wide open to other more niche directories that you may discover that are either category or geographic-specific, often.
Jeff White: Yeah, and I think you owe it to yourself to search for those and not just rely on the tools and see if there is one in your area. You’re not necessarily going to know, and there may be… could be manufacturing organizations in a specific area or vertical that might maintain those lists, as well. In fact, I think that’s where a lot of them have come from.
Carman Pirie: Absolutely. And folks, be prepared for this data to argue with itself. I mean, you’ll see companies that fall into a $10 million plus, or $100 million plus, or whatever it is revenue band, and then they’ll show up as having $2 in revenue in another tool. I mean, it’s insanity. The data is far from clean, and it is a big part of the work to sift through what works best in your space.
Jeff White: I will say that the InsideView tools that Demandbase bought next year does a fairly good job of showing where they got a specific piece of data, so if there’s a revenue number there will often be a link to the article that mentions it, and then you can look into it and see if that thing is actually trustworthy or not.
Carman Pirie: Right. Which is fantastic, but I just want people to be mindful of what we just said because we’re talking about a level of clicking into and researching of a single account that is laborious if your target account universe is say 6,000 big.
Jeff White: Sure. Yeah, and I think that’s where we… That level of investigation and detail is probably going to be limited to the top accounts that you’re most interested in, which you need to be able to get to a slightly smaller version of that 6,000 in order to distill that down to the ones you really want to know. But that tiering of a target account list is probably one of the most important things you’re going to do in terms of making sure that you’ve got a good quality list of accounts.
Carman Pirie: Yeah. And so, there’s two things here that I want to make sure that people understand they could kind of go both ways. You could… I guess the input into your data sourcing tool could be- we want to have the tool that’s best. It’s like, ‘identifying tier one accounts is our biggest priority or what have you, right?’ Another way to do that is to say, ‘if we have a target account universe in total of 6,000, we take a sample size in some way of it and we dive into that sample size in the various tools and say how correct is the information that we’re getting with this smaller sample size?’ That hopefully has been randomized enough that it can represent the whole.
So, I think just something to be in mind as we pivot the conversation a little bit to discussion of tiering.
But as we look at tiering I guess most organizations probably look at this as a lifetime value of customer question, and the higher the lifetime value of customer, the better it is… You want your tier one or your highest lifetime value and so on and so forth. Which, you know, you could argue some other ways to do it, but if there’s a default that would make sense. And of course, the reason it makes sense is your tier one customers with the highest lifetime value also represent the people that you may be obviously more likely to invest in acquiring.
Jeff White: Yeah. Most well suited to be a good customer for you.
Carman Pirie: Yeah. Or you’re at least willing to invest more in recruiting a tier one than you are a tier three. I guess a couple of things to be mindful of outside of that, though, is there may be customers or prospects that make it onto your tier one list because of the visibility they have in the industry, not necessarily the revenue that they drive to. So, there’s some other things that can push people to that tier one, so as you’re thinking through that lens, the most important one is: am I willing to spend more to acquire them? And if I am, then they should be in a higher tier.
And in some way, if I’m not really interested in spending a whole lot to acquire them one to one but I’m okay with spending money to talk to them and a group of others more broadly, well, you’ll find that that’s probably… It sounds more like a tier three prospect.
Jeff White: Right.
Carman Pirie: And that tier three, tier two, tier three target accounts would often be delineated by vertical and things of that sort, whereas… Not that the verticals aren’t important in tier one, but in tier one you’re often looking at account-to-account communication. You’re looking to speak to that account one-to-one.
Jeff White: Yep. And those are the ones that you are probably going to invest that extra time to dive into their website, to dive into their LinkedIn, to get an understanding of who they are. You know, the other thing too is your tier one may all be existing accounts.
Carman Pirie: Right.
Jeff White: You know, and you’re simply looking to grow them. You could be in that position where your biggest opportunity is to grow your tier one accounts, so you already know who they are and you already know where they work well with you, and then you know where you want to take them next. That’s why you’re creating the list.
Carman Pirie: Yeah. You probably have a sense of what your share of wallet is with that large account and what it could be.
Jeff White: Yeah. Exactly.
Carman Pirie: I guess, we talked about these ICPs, and then taking the ICP, the identification of those ideal customers that we would ideally want to be working with, and then translating that into a list of target accounts. And I guess if I wasn’t really clear, we talked about the different tools that you would use and whatnot, but when we say that we’re talking about- okay, we’re gonna tier the target accounts, we’re gonna make decisions on how we’re going to categorize them from industry on and so forth. But these are hardworking spreadsheets of company name, company address, and URLs, right? Yeah, so now that we’ve arrived at that, then how do we put it to work? What are we gonna do with it now?
Well, so I guess the couple things I would mention is from there, doing some select contact level research as well as working with your sales team can really help you understand the buying committee that’s in play in those target accounts, and understand the similarities, and that may well inform some persona work that can drive content creation.
Now, you’ll want to be mind… I mean, I always kind of shake my head sometimes when you like at a 12-person buying committee and they’re all very different personas. Sometimes I wonder how much that can really drive nuanced content creation. But you know, there’s no question that it can. The extent to which I guess it does is a question I would hold.
So, beyond doing it to understand that buying environment maybe a little bit better, you can also obviously put this to work in terms of fueling ABM programs. So that’s where you’re going to want to use I guess at least excerpts of this target account list to help you validate ABM programs, to help you understand what technology can help you reach your target accounts most effectively, and that’s not an insignificant thing.
And of course, this is all… Step one is getting the account-based marketing program. Step two is having a target account list to feed into it. In some way, you ought to reverse those. Have the target account list first so you make sure you select the right program. And that way when you actually buy it, you can pretty much put it to work right away.
Jeff White: Yeah. You know that the accounts are actually reachable with the platform.
Carman Pirie: Exactly right. One thing that’s important, not everybody’s looking to invest in an account-based marketing program to spray display ads tomorrow, so what is that… I guess a lot of people, the next step they would have from that target account list would be to go to a level of contact level research, right? And I think that there are areas I guess where that’s a good idea, like where it makes sense to do that extra level of work, get to those buying contacts so you know exactly who they are, and use that information to fuel your marketing and sales programs.
The only thing I guess I want to mention to our listeners is that it’s an iceberg and identifying the target account list is the part of the iceberg that you see, and the much larger part of that is finding the people, the individual people that you need.
Now, combine that with the fact that increasingly today’s privacy regulations and whatnot restrict what you can do with those target accounts, or with those target contacts anyway, and there’s… Different people have different levels of comfort playing outside the rules. I get it. But I think directionally, the one thing we know to be true is your ability to act against a set of target contacts is… It’s getting tougher and tougher.
You have fewer tools in your bag and the effectiveness of those tools are going down.
Jeff White: Well, how many memes out there are there about what happens immediately after you accept a connection request on LinkedIn? [Laughs] You know, it’s just… It’s become a joke. So it’s harder and harder to hit that.
Carman Pirie: Yeah, exactly. And I mean, now people are using text messages for cold outreach. You don’t know somebody and all of a sudden they’re in your pocket. Literally. Your phone’s in your pocket or your purse, and there they are.
So, all that to say—be mindful that doing the contact level research and getting to a level of accuracy with it, is the part of the iceberg that is impossible to estimate in advance. All you know is it’s much larger than what you see.
Jeff White: Far murkier.
Carman Pirie: And it could sink the boat. But it is achievable.
At the same time, once you get it I would just push you to consider, what can you do with it anyway? How is it going to truly impact… To action it extensively often means playing further outside the rules than people ought to be.
Jeff White: I think that’s true. The other side of it, though, is that there may be ways that you can begin to get on the radar of those individuals, but boy it’s gonna take a long time. And a fair amount of effort. And it’s going to be very difficult to measure. Like you can follow someone on LinkedIn, and then find out what groups they’re participating in, and then answer some questions. There’s different ways that you can do that digitally or find out what trade shows they might be going to and try and meet up with them. But these are all one-to-one, very deep kind of… You’re trying to build a relationship here, and do you really want that to be based on spam and subterfuge?
Carman Pirie: I don’t even know what I was… I had something to add to that and then I kept listening to what you were saying and agreeing and just nodding my head.
Jeff White: I like it when that happens.
Carman Pirie: Yeah, so I won’t try to add since I can’t remember.
Jeff White: I think that’s all right. I do think we’ve done a pretty good job of covering what an ICP is, where it’s useful, how do you do it, what do you do with it.
Carman Pirie: Well I guess the contrast that we might want to drive to that as we’re telling people contact level stuff is really hard to action, I guess the one piece that I was going to mention is, having some of that contact level research done so that you can find out where those people are getting their information—is there commonality in social following or what have you that you can leverage? These things do exist in the B2B context. It’s not just a B2C phenomenon. So you can use that information to understand the communities that you maybe need to participate in in order to get visibility with your buyers, but it’s a little less direct.
The other way to think about it is to say if we stop at the account stage, how do we get ourselves in front of those target accounts and then allow the conversion points and other things that happen once we’re in front of those accounts to reveal the contact? And you know-
Jeff White: The polarity of that’s a lot better.
Carman Pirie: True. And the simple way to think about that is we advertise into a target account, they come to our site, they convert, and that person tells us who they are, and if they’re not the right person they probably know the person that’s the right person, and it’s the start of getting us down that path.
The other thing is to be mindful of the fact that some ABM programs, for example, have an ability to retarget people at the contact level even though they came into your environment via the account-based level, if you will. So, there are some technology answers for that, as well, as we raise the cautionary flag around doing contact level research.
Jeff White: Yeah. I think as always if you go to market in the position where you’re looking to help, you’ll know the right thing to do.
Carman Pirie: I think the ‘just leave it up to marketers, they’ll know the right thing to do’ ship has sailed.
Jeff White: Oh, shoot. Maybe you’re right.
Carman Pirie: And it maybe didn’t go as well as we thought.
Jeff White: Oh, no.
Carman Pirie: But I hope this has been helpful. I hope people can kind of take this information, help them better wrap their arms around their target account universe and use that understanding to make better marketing decisions at the end of it.
Jeff White: That’s what it’s all about. Thanks a lot, mate.
Carman Pirie: My pleasure. Take care.
Announcer: Thanks for listening to The Kula Ring, with Carman Pirie and Jeff White. Don’t miss a single manufacturing marketing insight. Subscribe now at kulapartners.com/thekularing. That’s K-U-L-Apartners.com/thekularing.