The Success Trap: Your “Old” ICP May Be Letting You Down

In “Mr. Mom,” the 1983 classic with Michael Keaton and Teri Garr (RIP), recently fired dad Jack Butler struggles with his first day of elementary school drop-off.  Both his kids (initially) and then the crossing guard (finally) tell him, “You’re doing it wrong!”

This blunt assessment occurred to me while I was at the recent Maestro Sales Summit after attending Manoj Ramnani’s (the CEO of SalesIntel) excellent session, where he talked about the changes he’s seen in the GTM landscape over the past 24 months. He discussed companies having to evolve past “old ICP” definitions and transition to a more modern ICP (Ideal Customer Profile) framework. 

This ICP evolution appears to be yet another “success trap” that we should illuminate for practitioners who are struggling through the “what got them here, won’t get them there” challenge.

Let’s start with the basic (or “old”) ICP definition. Typically, the old usage isn’t wrong per se, but is more limited to basic firmographic factors. Firmographic attributes are used to define the boundaries of an ICP, and they function like demographics more or less: quantitative and structural characteristics that help identify which organizations are most likely to buy your solution. They define the “who” of your target market, establishing criteria that separate ideal accounts from the broader universe of conceptual buyers, but they have limited predictive power.

The basic ICP attributes are company size, industry, and location:

Let’s use an example to illustrate… Assume you’ve built a verticalized CRM for plumbers so they can better connect with their user community. This firmographic ICP is relatively straightforward:

• Independent or small number (fewer than 5) of plumbers in the company
• Plumbing standalone contractors (versus generalist handymen or multiline vendors)
• California-based (because of specific legal and regulatory requirements)

This is a decent place to start, and let’s assume your total addressable market (TAM) might be 100,000 possible prospects. The first challenge surrounds the 95/5 rule (originally coined by Prof. John Dawes of the Ehrenberg-Bass Institute and highlighted by LinkedIn’s B2B Institute), which states that only a small fraction (~5%) of B2B buyers are actively in-market at any point in time.  While this isn’t a rule per se, but more of a heuristic figure, it does put the challenge into perspective. 

The $64,000 question is, which of those 5,000 “in-market” plumbing firms are really going to buy any new software solution? A solid sales qualification methodology will clearly tease this out, but even before the opportunity-creation phase, it would be extremely valuable to sharpen the focus to determine what subset of your ICP is best suited to purchase something in the near term.

According to Manoj, SalesIntel is finding that the old ICP playbook, focused on factors like company size, industry, and region, only gets you so far. A modern ICP framework goes deeper and looks for more subtle growth signals (and in doing so, indicates that your ICP should be dynamic). These are indicators that predict a company’s likelihood to change course, spend money, and adopt new enterprise software. 

This is key!

Just because those 5,000 plumbers are “in market” conceptually, it doesn’t mean that they’re going to overcome basic inertia factors and pull the trigger any time soon. It’s likely that each of these entities has an existing CRM solution that works “well enough.” 

Would all 5,000 benefit conceptually from your “better” (more feature-laden) solution?  Sure, but you must find out when and if there’s a tipping point that creates some level of urgency.  Or, stated another way, where the cost of doing nothing (i.e., maintaining the status quo) is nothing, there has to be some motivation to pivot.

The real question then is: which subset of your ICP is actually primed to change?

    
This is where advanced signals can come into play because the basic ones tend to miss out on the real strategic value. These signals go beyond basic firmographics, ideally revealing momentum, resource availability, strategic direction, etc. A modern ICP framework is more data-driven, dynamic, and predictive. These are the areas that Manoj ranked as being some of the most predictive:

• Hiring Velocity
• Expansion Plans
• Funding Announcements
• Tech Stack Changes
• Employee Turnover
• Partnership Announcements

These technographic and predictive signals would obviously need to be tuned to your unique market position and competitive landscape. But, if done properly, this ICP scoring would be more about identifying who’s actually ready to buy, adopt, and expand successfully.

Your ICP can then become a buy-readiness model, not a demographic sketch.

Are you wondering what’s wrong with spending time on the undifferentiated 5,000 prospects? The answer, on one hand, is nothing… but only if you have unlimited amounts of time, staff, money, and energy. 

Let’s say that your annual contract value (ACV) is $10,000—then this full (undifferentiated) pipeline (of all opps) is $50M. Sounds great, but in reality, your team can’t effectively chase all those deals. So, if you can help the team avoid spending time on the large swaths of potential customers where the cost of doing nothing is nothing, then they can home in on the ones where the signal-to-noise ratio is significant. Focus is key, especially in the land of finite resources.

If you want to stop “doing it wrong” like Jack Butler, and you want better win rates and a more predictable pipeline, ditch your “old ICP” approach and modernize it with a more predictive, signal-based approach.

Reach out to mastery@maestrogroup.co if you need help getting started.