The cost of an unclear ideal customer profile (ICP)

Your unclear ideal customer profile (ICP) is the #1 reason why your sales pipeline sucks.

If you’ve ever spent 45 minutes on badly qualified sales calls, you know the pain of an unclear ICP.

Time wasted on bad leads adds up.

Your competition is moving faster—and you’re stuck chasing people who’ll never become customers.

You’re wasting time, and there’s no limit to your opportunity cost.

If you don’t know what market or personas to go after, how can you solve clear problems?

When you don’t know where the gaps in your ICP are, this GTM fundamental becomes notoriously hard.

A well-defined ICP gives 29% larger average deal sizes and delivers, every single time.

But the worst thing about an unclear ICP is not knowing you have one.

Symptoms of an unclear ICP

I’ve seen 35 ICP documentation and consulted 10+ of them.

The biggest mistakes?

Catching a net too broad, diluting their messaging and undermining customer research (AND data).

9 months ago I was excited to get prospects on calls, only to realized I’ve been chasing them for nothing (they were never gonna buy).

Your lack of persona clarity means to low-quality calls, long sales cycles, and you’re just looking at your CRM, wondering how can you get more people on calls.

My assumption for early stage startups is that a big part is just the lack of research.

But even if you know your TAM (or SAM would be even better), you’re not protected from these 2 mistakes:

1) Company size is too broad when targeting

The company size doesn't correlate directly with specific challenges.

Two CFOs of different companies have different needs, and trying to catch both is diluting your messaging.

A startup with less than 10 employees might leverage founder-led growth on social media, but a bigger one (e.g. 50+) can be trying to scale ops, and potentially outsource or hire internally for social media.

Different sizes mean different triggers.

They will have different pain points at different growth stages. That's why triggers should always be included in your firmographics.

A single message will fail to resonate with companies across these wide ranges.

If I talk to you about manual invoicing and you’re under 50 employees, it might be relevant. But if you’re a team of 500+ employees, chances are you already have automated systems to do just that.

The keyword here is specificity.

2) You don’t include the problem and the alternatives

If you target 50 to 5,000+ employees, you’re trying to be relevant and top of mind with three different growth stages (extreme but real examples I’ve seen).

You create vague messaging to appeal to everyone, which appeals to no one.

How can you properly reference the problems and their current alternatives used, if you’re casting a broad net?

Teams waste resources testing messages that can’t connect deeply with any segment.

When you're not specific, you're relying back on stuff that every company (big or small) is trying to do.

More revenue, profit, and saving costs. Basically staying HYPER generic! What is a business if not a revenue and growth machine?

You need to be specific and find a way to center your messages on your prospects and their company reality.

Failure to do so will misalign leading to lower engagement rates, higher bounce rates, and wasted ad spend.

Companies with well-defined ICPs achieve 68% higher win rates compared to those without.

How can you prevent an unclear ICP?

75% of the respondents from this ICP survey target multiple brackets, including small (1-10) and large (1,000+) companies at the same time.

Here are the main recommendations I've told them:

1. Focus on 1-2 Brackets:

   Startups (1-50), SMBs (50-200), or Mid-Market (200-1,000) → target precisely.

2. Match Pain Points to Size:

   "We help companies with 11-50 employees automate manual tasks to scale faster."

The real costs of unclear ICP

An unclear ICP is costing you thousands of dollars per deal.

And this is the biggest enemy to having a messaging that deliver results.

If you don’t filter quickly, you lose time and might be left behind.

Short-term costs

With clear ICP giving almost 30% larger deal size, you’re losing a substantial paycheck for every deal you’re winning that isn’t aligned with your ICP.

• Unsustainable CAC and wasted ad spend

• Poor conversions and sales win-rates

• Drastic slowness to growth goals

But this is only in the short term, imagine when you keep doing.

Long-term consequences

If we take a peak into the future, it can mean:

• Product roadmap mainly becoming reactive against the competition

• Fluffy and confusing positioning because you’re unsure who you’re best for

• High CAC and lower than expected LTV

But, the thing is, you can always do something to iterate with your ICP.

It’s not 100% lost. Here’s how to do it:

It all starts with your ICP model

Your ICP misalignment gives you an inconsistent and dry pipeline.

Keyplay came up with an interesting concept, called the ICP translation gap.

It’s the discrepancy between the description executives have of your ICP, and sales recognizing them in the wild.

They build a model that takes your serviceable addressable market (SAM), show you your highest-paying customers, and disqualified accounts, and compares them to your total customers broken down by tiers.

They have a 4-step guide to build an ICP model that your team actually trusts.

If you want to check them out, they can generate a list of accounts that fit your ICP model. I’m not affiliated btw, I just think it’s a good tool🙂 

The impact of the translation gap is the ICP misalignment, one of the root causes of bad messaging.

Here’s what it looks like when you focus on clarifying your ICP 👇

Case Study - 70% of the revenue and 4x the LTV

A use case on how beneficial your ICP definition is with the startup Survicate, a customer feedback platform B2B SaaS based in Poland.

Kamil Rejent, the CEO, wrote a post on how they were trying to quantify it.

This is perfect because your ICP alignment is a big chunk of your message-market fit proximity.

Turns out their ICP represents 70% of the revenue and 4x the LTV, while only being 50% of their customer base.

Now imagine if 80-100% of their customer base was their ICP.

Bigger deal sizes and less time lost on unqualified opportunities.

What’s not to like?

Use the 80/20 way from Peep Laja

Figuring out your ICP isn’t easy, you’re trying to shoot a moving target but you don’t always know what it looks like.

I’m a simple man, I see a Peep Laja post, I like it.

Here’s the 5 steps he’s talking about on how to use the 80/20 ways to figure out your ICP:

1. Pull a list of your top customers.

2. Feed that list into AI + ask it to find common threads.

3. You will learn one or more groupings of ICPs.

4. Interview customers matching those parameters.

5. Run a target customer survey on Wynter

You can check his full post on LinkedIn.

So, what is the solution?

Your ideal customer profile isn’t just something that depends on marketing, it’s a motion from your entire organization.

That’s why I created this cheatsheet, so you can stop wasting time on the wrong leads.

Clarifying your ICP and focusing on research isn’t of much help…if you don’t know who your ICP is yet.

Or if you’ve been trying to dodge unqualified leads❌

Next Friday, I will cover the quickest and most effective way I’ve found to fight unclear ICPs:

The Anti-ICP.

Thanks for reading this newsletter and see you next week👋

– Gab