Product-Market Fit and Ideal Customer Profile are usually 25% customer demographic traits and 75% behavioral and belief traits.
Many founders don’t learn this until too late.
The first cut of PMF and ICP are demographic traits, of course. They are necessary but not sufficient to create efficient growth.
Company size, industry, and region are the big demographic traits in B2B. Age, gender, and location are big in B2C.
But that’s not enough to grow a great SaaS business with efficient customer acquisition, profitable-ish growth, and low churn.
Your ideal customer for whom your product is a great fit is not just a demographic description like “small dental offices in the US.”
There are many of those offices, but there is only a small minority of those who will buy from you efficiently, get great value, and pay you for years.
That’s really what makes the ICP in your PMF that will create a great SaaS business.
You are really selling to the “insert your demographic criteria here”–who believe or are doing most of these things:
- Know they have a problem
- Are looking for alternatives (reaching demand)
- Used something (or didn’t in the past)
- Can understand why your solution is different and better than competitors focused on the same demographic
- Actually want to solve the problem
- Align with your philosophy or your brand
- Will do the work to implement the solution and get value
- Show up in the places where you are visible
In other words, they have specific BELIEFS and BEHAVIORS that don’t describe most businesses or consumers in your target demographic.
You may sell to small dentist offices in the US, but you really are selling to the ones that have a certain problem, align with your brand story, have used other specific solutions in the past, and are ready to switch systems sometime soon.
It’s almost always less than 10% of your target demographic that truly has the specific beliefs and behaviors that will buy from you and will be successful right now.
This means most of your market may have a demographic fit, but they won’t be a successful customer this year.
Geoffrey Moore’s “Crossing the Chasm” version of the product-adoption curve showed us how to focus on the narrow slice of our market that is ready to buy from you and succeed right now.
This means your target slice changes over time, and you need to recalibrate continually.
Another way to slice it is to ignore the 50% of your demographically defined market that would never consider your solution, won’t buy this year at a fair price, and won’t do the work to get the value.
Yes, you also need to define and be clear about your CCP–Crappiest Customer Profile.
And you need to not sell to them right now. Scare them away.
These CCPs are often the hardest to ignore, especially when you are starting out and desperate to sell something.
What are the most important beliefs and behaviors of your ICP?
Who are the CCPs you are saying NO to?
