Many B2B SaaS companies waste resources by targeting their total addressable market (TAM) instead of focusing on their ideal customer profile (ICP). This data-driven approach can improve conversion rates and optimize marketing efforts.
We keep pretending our total addressable market (TAM) is our actual target audience. It's not working. B2B SaaS companies are burning cash targeting anyone who might theoretically buy their product, but without real data to back up these targeting decisions.
Your Ideal Customer Profile (ICP) isn't an exercise. It's data-driven targeting based on:
No historical data yet? Start here:
The reality is painful but necessary: your marketing budget will never be big enough to target everyone. And even if it was, you shouldn't. Focus drives results. When we narrow our audience based on proven data, our conversion rates climb.
Stop pretending TAM is a targeting strategy. Your ICP is the subset of companies ready to buy today. Everything else is waste.
Most agencies are still running the same tired playbook from 2010, obsessing over lead volume while your sales team drowns in unqualified prospects. And if you're nodding along, you've probably been there – staring at a dashboard full of "leads" that wouldn't know your ICP if it hit them in the face.
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