Ask almost anyone in a company who their ideal customer is, and if they’re being completely honest, they’ll tell you: “whoever’s willing to sign a contract”. It’s just the way it is. Marketing targets broad segments of the market, business development / inside sales reps will talk to anyone, sales execs will take every meeting, and they’ll sign-up anyone willing to pay.
In the short term, this works. Top line revenues keep growing. But over time, adoption rates remain low, implementations have a lot of hiccups, and a sizable number of customers never become really successful with your products. When churn inevitably shows up later, it’s often blamed on pricing, or the product itself, or on ‘better” competitors. But more often than not, the real issue was there from the start: poor customer fit.
The most effective way to define your Ideal Customer Profile (ICP) isn’t to speculate about the market. It’s to analyze your existing customers, starting with the happiest ones as your baseline. These are the customers who consistently report high satisfaction, aren’t constantly harassing your customer / technical support team, renew with minimal friction, and buy more of your products.
When you look closely at this group, patterns begin to emerge. They don’t just use your solutions casually. They use it strategically, across many areas, and integrate it into their business. They treat insights as part of how the business runs, not as a one-off project. Just as importantly, leadership is involved, signaling that the product matters beyond a single team.
Your ICP stops being theoretical the moment you see these patterns clearly.
Equally important is understanding who doesn’t fit your ICP. Every company has a subset of customers that are consistently unhappy, difficult to support, and unlikely to renew. These relationships tend to follow the same script: limited use cases, siloed ownership, little executive buy-in, constant complaining, and high expectations paired with low adoption.
The danger is that these customers often look attractive at the start. They have budget – i.e. they’re willing to pay. But history shows that bringing them on rarely leads to long-term value for either side. What looks like revenue today becomes costly churn tomorrow. Plus, along the way, they’re trashing your reputation in the market.
This dynamic isn’t unique. Recent research* from Harvard Business Review highlights the risks of prioritizing short-term revenue over customer fit, noting that misaligned customers introduce operational strain, increase churn, and quietly undermine growth over time. The damage isn’t always immediate, but it compounds.
When teams ignore these warning signs, they force sales to qualify everything instead of disqualifying what doesn’t belong. That choice costs time, morale, profitability, and future revenue.
*https://hbr.org/2026/01/the-risks-of-prioritizing-short-term-revenue-over-customer-fit
The irony is that companies often have most of what they need to define their ICP. Their customers came from the market. The data showing who succeeds, who struggles, and why is already there. If they don’t have the right systems to collect ongoing customer feedback and then merge it with all other customer-related data, then this needs to be addressed in short order.
An effective ICP isn’t about excluding people arbitrarily. It’s about aligning sales, marketing, and customer success around the customers who consistently win with you. When you do that, growth becomes more predictable, renewals improve, and fewer deals turn into regrets.
The goal isn’t to sell to everyone who’s interested, it’s to sell to the customers who are most likely to succeed. This is the ultimate win/win.
To learn more about how to build your own Ideal Customer Profile program, click here to schedule a meeting and I’ll walk you through it.
About Reaction
Reaction is a growth acceleration platform that companies use to easily manage client relationships, uncover new opportunities, and grow their business. Our platform is specifically designed to run client programs, manage employee feedback, gather critical market insights, increase mindshare, generate new business, and analyze existing data sources.
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