We’ve all heard the saying, “The riches are in the niches.” But how do you pinpoint those lucrative niches?
The answer lies in another key term in sales and marketing: your ideal customer profile, or ICP.
While most experts offer complex, data-heavy strategies to identify your ICP, you might not have access to extensive data or resources as a founder or early-stage startup. Let’s simplify this process.
Step 1: Define Customer Avatars
You have an idea—a problem, a solution, a product, or an opportunity you’ve identified in the market. Who needs to know about it?
Start by creating 2-3 basic customer avatars.
Give each avatar a title and describe their daily activities. For B2B, focus on their professional roles; for B2C, emphasize their personal routines. Most importantly, identify their pain points. What challenges them? What obstacles are they facing in achieving their goals?
Step 2: Develop a Lean Market Test for Your Solution
Notice the word “solution.” It’s crucial.
Ideally, you haven’t yet invested heavily in product development. Before building, you must test the market: Is there demand for your idea? Will people pay for it?
Create a proxy for your product—like a blog post, video, presentation, or course.
The method is critical. When crafting this proxy, leverage platforms with built-in audiences that reflect your target market.
Channels I often use: my website, LinkedIn, Medium, and more.
Tools to create your proxy product: Google Docs and Slides, Notion, Gumroad, Substack.
Step 3: Schedule Calls and Ask for Payment
You’ll know you’ve identified your ICP if you see consistent outcomes from market testing:
1. People book appointments to learn more.
2. You ask for money, and they pay.
If about 10-20% of your audience (followers or outreach) schedules appointments, and 10-20% of those appointments result in sales, you’ve found your ICP. This equates to a 5% conversion rate.
Step 4: Scale Audience Development and Sales Systems
Optimization will be an ongoing process for your product and your sales and marketing strategies. However, a well-defined ICP provides the confidence (and the investor appeal) needed to scale your business.
Turn your testing into a repeatable, teachable, and scalable system.
