Episode 33: The ICP Trap | Why One and Done Isn't Enough

In this episode of the RevOpsAF Podcast, co-host Matthew Volm sits down with Kristina Diederich, a seasoned VP of Revenue Operations with experience at companies like ECI and Varicent, to discuss a critical challenge many revenue teams face - defining and refining their Ideal Customer Profile (ICP).

Many companies fall into the trap of setting their ICP once and never questioning it again.

"Your ICP isn't a set-it-and-forget-it exercise. It needs continuous pressure testing to align with real-world data and customer behavior." — Kristina Diederich

From understanding how to define ICP to recognizing when it's time to adjust, this episode is packed with actionable insights for revenue leaders looking to optimize their go-to-market strategy and maximize sales efficiency.

What Is an ICP and Why Does It Matter?

Your Ideal Customer Profile (ICP) is the blueprint for your best-fit customers - the ones who see the most value from your product, spend the most, and have the highest potential for expansion.

"Your ICP should be based on more than just a gut feeling. It should be backed by data that proves where you're getting the most revenue and retention." — Kristina Deiderich

Many companies make the mistake of assuming their ICP is static, when in reality, customer needs, market conditions, and competitive landscapes shift over time.

📌 Key Takeaway: A well-defined ICP ensures marketing, sales, and customer success teams focus their efforts on the right prospects, shortening sales cycles and boosting win rates.

For a deeper dive into leveraging your ICP across your go-to-market strategy, check out the RevOps Co-op's webinar on Finding and Unleashing the Power of Your ICP Across GTM.

Common ICP Pitfalls: The "One and Done" Mentality

ICP mistakes often stem from assumptions rather than data. Kristina shares an example from a previous company where leadership believed their ICP was companies over $100M in revenue. However, upon analysis, they discovered 40% of their recent closed deals were outside this criteria, including smaller companies with high spending power due to venture capital backing.

🚩 Signs Your ICP Needs an Update:

• Churn is high among customers that “should” be a good fit
• Your biggest deals don’t match your current ICP definition
• Sales cycles are longer than expected due to misalignment
• Emerging trends in new customers differ from historical patterns

💡 Action Tip: Review your customer data annually (or even quarterly for fast-growing companies) to ensure your ICP reflects reality, not assumptions.

To assist in this evaluation, consider utilizing the ICP Data Management Checklist.

Company vs. People Attributes: What Really Defines an ICP?

Defining an ICP requires looking at both company-level and people-level attributes.

🔹 Company-Level Attributes:

• Revenue range – Is company size a real indicator of spending power?
• Industry verticals – Are certain sectors a better fit than others?
• Tech stack – Are they using software that integrates well with yours?
• Growth stage & funding – Are startups with VC backing viable customers?

🔹 People-Level Attributes:

• Job titles & seniority – Who are the decision-makers?
• Buyer pain points – What problem are they trying to solve?
• Buying behaviors – Do they engage in self-service research or require hands-on sales?

📌 Key Takeaway: A strong ICP balances both company and people attributes to ensure you’re targeting the right accounts AND the right individuals within those accounts.

For more insights on defining a lead and understanding customer profiles, refer to The Correct Definition of a Lead.

ICP Refinement: A Data-Driven Approach

Kristina recommends breaking ICP refinement into three customer segments:

1️⃣ Long-Term Customers:

• Who has been with you the longest?
• What characteristics do they share?
• What’s their LTV (lifetime value)?

2️⃣ Recent Wins:

• Who has recently signed a deal?
• Do they match your existing ICP?
• Are there new industries or company sizes emerging?

3️⃣ Churned Customers:

• Who left, and why?
• Were they ever a good fit, or was there a mismatch from the start?
• Are there red flags you should use to disqualify future prospects?

By regularly assessing these groups, you can spot patterns and optimize targeting, ensuring your sales and marketing teams focus on the right customers.

🎯 Actionable Tip: If you see churn clustering in a specific industry or company size, it might be time to shift your focus elsewhere.

How ICP Refinement Can Drive Revenue Growth

One of Kristina’s most impactful experiences in redefining ICP came when she pressure-tested an existing ICP assumption and discovered a high-value customer segment that had been overlooked.

By tweaking pricing strategies and go-to-market motions, her team was able to close $500K+ in new deals within five months.

🚀 What Changed?✔ New Sales Motion: A dedicated team focused on this new ICP segment✔ Updated Pricing Strategy: Adjusted packaging to fit these customers' needs✔ Better Enablement: Sales had tailored demos and collateral to speed up deal cycles

📌 Lesson Learned: Sometimes your biggest opportunities aren’t in the customers you’re chasing- but in the ones you’re overlooking.

For strategies on aligning your ICP with your go-to-market efforts, consider the insights shared in the webinar Winning with RevOps and ABM: A Roadmap for Success.

Final Thoughts: Stay Agile, Stay Data-Driven

ICP isn’t just a sales or marketing exercise—it’s a revenue growth strategy. The most successful RevOps teams consistently pressure-test assumptions, analyze data, and adjust their ICP to reflect market realities.

🔹 ICP Review Cadence: Annually for most companies, quarterly for fast-moving markets.

🔹 Look Beyond Revenue: Consider **usage patterns, retention rates, and customer feedback.

🔹 Start Small, Then Scale: Test changes with a subset of sales reps before rolling out widely.

"If you aren’t evolving your ICP, you’re leaving money on the table." – Kristina Diederich

By continuously refining your ICP, aligning it with real customer data, and staying agile in your go-to-market approach, RevOps teams can ensure that sales and marketing efforts are focused on the right audience—driving higher win rates, improved retention, and faster revenue growth.

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