It can be somewhat of a challenge to tell apart a Total Addressable Market (TAM) from an Ideal Customer Profile. Knowing the difference between these terms can help marketers improve their ABM game. When marketers know how to tell one from the other, it allows them to create them more easily.
To be effective at B2B marketing, marketers need to know which accounts to target, if marketers are going with an ABM strategy. But before they can do this, marketers need to identify their TAM and ICP.
A marketer’s TAM consists of every account they could possibly sell to while their ICP is strictly about an account. When referring to individual people at that company, buyer personas are used, not an ICP. The difference between the two can best be described in terms of sight. With TAM, marketers can see everybody—that’s like looking through binoculars. ICP is a more detailed, close-up view of a company.
When marketers know what their TAM and ICP are, how to identify them, and tell them apart from each other, the process of creating an ICP is less troublesome. Marketers need in-depth information about their best customers.
For marketers to find out who their best customer is, they usually need to look back at data spanning 2+ years. This data includes technographical, behavioral, firmographical data.
Questions marketers should ask themselves are: Which customers generated the highest likelihood to renew? Highest product usage? Highest adoption rate? After marketers finish with that, they need to analyze the data, and an ICP will be formed by picking out dominant trends.
But when marketers find their best customers—defining an ICP—that’s only half the battle. Now that marketers know who their best customers are, it’s time to take the characteristics gathered from them and apply them in a broader context. This means identifying companies that fit marketers’ ICPs.
To begin that process, marketers need to combine any existing information they have about the accounts they want to target with information found through research. This—finding existing information about accounts—usually happens when marketers look through their CRM. Marketers can then pare their target account list down by filtering it by firmographic data.
Next, marketers need to find out if they have any gaps in the data they already have and the data they collected. Once the gaps have been found, enhance it by hiring a customer data provider. Lastly, marketers, once they have completed all of the above, need to prioritize accounts that can wait and those that can’t.
Doing this will help target marketers’ outreach efforts.
Original article from Terminus on 10 June 2019.