ICP vs. Persona: Understanding the distinctions and how to use them

Knowing your audience is critical to business success. Even for global enterprises that sell seemingly universal products or services, knowing who makes a buying decision—and how—remains crucial to optimizing sales and marketing efforts and focusing on the most profitable customers. 

Buyer personas and ICPs offer two methods to clarify who customers are. Companies often create multiple personas and ICPs, but they’re not interchangeable.

Rather than deciding on ICP vs. personas, the two approaches work together to offer a framework (ICP) and fictionalized individual (persona) that guide strategic sales, marketing, support, and development decisions. 

What is an ideal customer profile (ICP)?

An ideal customer or client profile exercise yields one or more ICP sheets, with each summarizing a company profile to represent a key market segment for the business. It’s most often used for business-to-business (B2B) organizations, where the ICP details a business entity target (that may or may not contain end users) rather than individual consumers.

A B2B ICP typically identifies firmographics, behaviors, and traits, including: 

• Industry
• Location
• Organization size (categories like micro, small, mid-market, and enterprise)
• Annual revenue range
• Budget available to be invested in your product or service suite
• Employee size, demographics, and key roles
• Customer size, demographics, and psychographics
• Organizational structure or maturity
• Challenges or pain points
• Technology level, adoption, or usage
• Transaction, support, training, and other interaction history

Some of these answers are guided by your company’s limits and sweet spots rather than researching it all from scratch. For instance: 

• Cost thresholds of your products or services—what size budget or revenue can afford it? 
• Which are your verticals, and which industries are incompatible with your offerings?
• Is your product, solution, or its support limited geographically?
• Are there legal restrictions on where, how, or to whom you sell?

ICPs are critical for account-based marketing, which is used by 94% of B2B marketers. It involves identifying large-scale target companies to approach and crafting customized materials and messaging for them. 

Both quantitative and qualitative analyses are valuable in creating ICPs. This includes:

• Primary research – Individual interviews, surveys, and focus groups
• External secondary research – Industry reports, competitor data, market research
• Internal secondary research – CRM (customer relationship management) reports and customer data, marketing and lead-gen analytics, sales and customer service feedback

Steps to develop an ICP include: 

1. Analyze your customer data for patterns and commonalities.
2. Identify customers with the most value for the lowest acquisition and maintenance costs.
3. Conduct market, industry, competitive, and any primary research.
4. Clarify the key characteristics of your ICP.
5. Draft, circulate, and refine ICP cards.
6. Establish structures for ongoing testing and regular updates to ICPs.

Although more common within B2B entities, ICPs absolutely provide value to B2C (business to consumer) companies as well for capturing segments, organizations, or environments that B2Cs target. 

What is a persona?

So, what is a buyer persona? Buyer personas represent ideal customers at the individual level. They’re conveyed as fictionalized characters who are crucial to the buying journey—typically primary decision-makers, even if they’re not the individual who handles the administrative aspect of completing a sale. 

One of the top goals for persona creation is personalizing marketing content and delivery—a practice that drives 40% more revenue for the fastest-growing companies that excel at it. Think of it like this: An ICP helps you attend the right convention with a great display and product offerings, and a customer persona helps you figure out where to locate the right contact person at the show and what to say to them to close a sale. 

The factors that go into creating a persona card include: 

• Name – A fictional name that often represents their role
• Demographics – Gender, age, job title and seniority, location, and education
• Buying and usage roles – Such as influencer, decision-maker, purchaser, user, or administrator
• Psychographics – Values, interests, lifestyle factors, hobbies, beliefs, or personality traits
• Tech and media consumption – Social platforms, device preferences, technological expertise, online purchase behavior, product research preferences, days and times of interaction history
• Motivations – Cost, convenience and time savings, adoption speed, efficiency, limited-time offers, brand loyalty, and performance improvement
• Pain points – Difficulties, dislikes, challenges, pressures—anything that’s an ongoing irritant or difficulty, even if it’s not something you can imagine solving for them now

For B2B entities, buyer personas often prioritize the buying role and how traits are expressed in a professional environment while still describing some non-numerical traits. At the B2C level, the description leans more toward private life, with attention to behaviors and values that are useful to understand. 

Both B2Bs and B2Cs rely on personas for the nitty gritty of campaign planning when they: 

• Personalize messaging and offers
• Choose specific channels, platforms, tactics, and schedules
• Boost demographic targeting for digital advertising

While their focus and use diverge, the process of creating a buyer persona reflects that of an ICP. Both start with market research and data analysis to identify patterns that are tested and refined. Organizations then create a one-page slide or card that summarizes distinct characteristics and which teams will use to guide their efforts. Over time, the organization continues testing and updating to achieve ongoing improvement.

Additionally, you might develop a negative buyer persona, which is equally important. This persona identifies customers who are not a good fit for your product or service, helping you avoid wasted resources and effort.

ICP vs. persona research methods differ only in that buyer persona research often incorporates more than the methods mentioned under the ICP section above, such as: 

• Social listening
• Social network demographic targeting and testing services
• Third-party user testing networks
• Greater emphasis on interviews, surveys, and focus groups

Key Differences between ICP and persona

You may have encountered a few “deja vu” moments reading the ICP vs persona sections above. Between the two, there’s a significant overlap in: 

• Research sources and types
• Creation process
• One-page summary card presentation

The differences between an ICP vs. buyer persona show up more when it comes to which questions are posed during the research phase and how the two tools are used. Consider: 

• Focus –  A sales ICP showcases the ideal customer at a company (or entity) level, while a buyer persona represents a specific, fictionalized individual.
• Sales use – Sales departments use ICPs to identify businesses to approach. They use personas to identify whom to contact and to develop scripts and collateral that will entice that individual.
• Marketing strategy use – Marketing departments use ICPs to identify targets for account-based marketing, develop value propositions, and align tradeshow, print ad, list use, and sponsorship strategies. They use personas to personalize content creation, create materials with appealing copy and design, improve ad targeting, and select and schedule engagement tactics for targeted channels and platforms.

Combining ICP and personas for a comprehensive strategy

When it comes to market profiling, it’s not a question of ICP vs. personas but rather layering the methods together to become greater than their parts. 

For example, consider a metropolitan restaurant supply business. Their ICPs might include: 

• Restaurants, broken down by size and by local or corporate ownership
• Bars and entertainment venues without full food service
• Culinary schools
• Primary and secondary schools and community organizations
• Individual consumers

Each ICP would reflect different buying schedules, budgets, needs, and challenges, and each might connect to one or more buyer personas. For instance, the culinary schools ICP might be home to: 

• Operations Olivia – Age 48, married with grown children, values efficiency and quality, challenged by strict budget limit and demanding teachers, initiates triannual RFPs (requests for proposal), orders monthly via desktop web, irritated at changes in process or product without notice, office tech whiz but late adopter for personal tech, uses Facebook and Pinterest occasionally, prefers all professional contact by email
• Student Stanley – Age 26, single, values trends and luxury brands, challenged by school costs and small apartment kitchen, shops via Android mobile on Chrome interface but usually buys in person, responds to limited-time sales offers, active on Instagram, prefers text alerts for special offers

Making the right choices for your business

Audience profiling isn’t a matter of ICP vs. buyer persona; rather, it’s about selecting the right mix of approaches for your business needs. You can benefit from using ICPs at a company or segment level to structure sales, lead-gen, and account-based marketing, and then personalizing content, ad targeting, and media buys based on individual, fictionalized buyer personas. 

Both models help you identify prospective customers and understand how and where to introduce yourself.

Combine ICPs and personas with the power of Nextdoor

With Nextdoor, you can connect to current customers and potential clients geographically, down to the micro-neighborhood, in addition to targeting specific demographics and interests. Start with a free Business Page to establish a local online presence. Then, use Business Posts to interact with your community and Nextdoor Ads to identify your ideal customers and promote special offers. 

Nextdoor Ads Manager offers an easy-to-use, interactive dashboard to track engagement and ad performance with real-time feedback. It’s how entrepreneur Rita Shelley promoted specific, targeted messaging to neighbors in various zip codes, and what helped family-run Canseco’s Gardening Services grow their local business by 40%.

Looking for more Nextdoor insights and guidance on customer profiling? Visit the Nextdoor Business Center to learn more. 

Sources: 

1. Terminus. The 2020 State of ABM Report. https://terminus.com/2020-state-of-abm-report-preview/
2. McKinsey & Company. The value of getting personalization right—or wrong—is multiplying. https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/the-value-of-getting-personalization-right-or-wrong-is-multiplying