Every LSP should have a clear understanding of who their ideal customer is. But if you’re not clear about yours, you’re not alone. Many seasoned and newbie LSPs struggle to delineate their Ideal Customer Profile, with even more failing to effectively use it to shape their positioning, service offerings, and LSP strategy.
Why? Well, if you’re a new LSP you’re probably still finding your feet. And if you’ve been at it for a few years you may have simply gone with the flow, jumping from one customer to another, adapting your “ideal” customer to whatever comes along, but never really committing to a set customer type.
Is this haphazard “approach” really working? The thing is, you might not even be aware of the potential customers you’re missing out on because you’re not showing your audience what you stand for and who you serve. Wouldn’t it be better to be more proactive about it and actually attract the clients you really want?
What’s an Ideal Customer Profile?
An Ideal Customer Profile (ICP) is a detailed description of the customer that best fits your services and has the highest customer value for your business. It’s essentially a list of traits that should include their demographics, pain points, needs, as well as their values and goals.
Why create an Ideal Customer Profile?
Having an Ideal Customer Profile ensures you and your team only focus on prospects that bring you the highest return on investment. More specifically, you’re looking for the customer that will bring you the highest lifetime value (total revenue from a single customer over the length of time working with you). The reason for this is that one-off projects are more costly to LSPs than having buyers come back regularly with more orders. With long-term clients, you’re doing the same amount of work to attract, onboard, deliver, and offboard, as you would with a one-off customer, but you’re getting a lot more orders (i.e. revenue) in between. And building an ICP will help you focus on retaining existing customers for longer, as well as attracting new, more qualified customers.
Steps to create your Ideal Customer Profile
How do you actually create an ICP? Essentially, by analyzing your existing customers to get an idea of the types of companies that need you as well as potential customers that may be more profitable and a better fit. But let’s break it down into actionable steps.
1. Research your current or potential customers
This first step may seem simple but it’s often hard to execute. First, you’ve got to decide who to reach out to. Start by thinking of the customers you have the best working relationships with and then those who are doing well in their business. You’ll find that these two categories may overlap. If so, that’s a great sign that shows you’re helping them succeed, so focus on these customers.
If you’re just starting out and don’t have a reliable customer base yet, you can still go out and do the market research. Look into the needs and revenue potential of different industries to help you spot any niches with potential that match your LSP’s expertise and offerings.
Also, make sure that you’re reaching out to the companies’ decision makers and identifying the departments that are responsible for multilingual content. Sometimes there is no dedicated localization professional or team, which means your points of contact will probably be the marketing or product departments.
2. Determine your customers’ key characteristics
Once you know who to focus on, you’ll want to pinpoint these people’s key attributes. I say people because, even if you’re targeting large corporations you still have to focus and think of the actual individual decision makers behind them. A good starting point to building your ICP is identifying basic demographics like company size, revenue, industry, and geographical location. However, as an LSP, your priority should be your customer's approach to localization. What are their attitudes towards Continuous Localization? Where do they currently stand when it comes to Agile and Continuous Integration/Continuous Delivery (CI/CD)? Are they looking to improve their content production and localization workflows?
As an LSP, your priority should be your customer's approach to localization.
If a business does not value the importance of content and localization, then you’ve got a difficult job ahead trying to turn them into customers. In fact, you’re probably better off focusing on other prospects because it’s an added hurdle in your sales cycle, and frankly, there is no guarantee that you’ll be able to convince them. Instead, focus on companies that are already producing considerable content and have come to the realization that they need to start localizing it into multiple languages, or upscale their localization processes to meet the growing demands of the market. By incorporating this requirement into your ICP, you’ll always keep your marketing and sales efforts right on target by focusing on valuable potential buyers and quickly filtering out the rest.
3. Pinpoint their content creation and localization processes
This is the natural continuation of step two. Now you know your ideal customer is aware of the need to up their localization game, so, you need to see exactly what their content creation and localization processes look like. And, in this day and age, this means you need to find out what technology they use.
What tools are they using? How are they using them? Are you the missing piece they need? If your unique selling point is that you can seamlessly fit into your customer’s content loop, you need to assess their current tech stack and content production tools, including how they publish content on their websites, social media platforms, or knowledge bases.
You’ll want to get as specific as possible, so that means finding out what CRMs, CMSs, email marketing tools, and collaboration/communication tools they use; and you’ll want to see how they all fit together within their content loop.
4. Zero in on their specific needs
This final step is where you put together all your findings from steps one to three to determine your ideal customer’s exact needs — and ultimately shape your ultra-focused ICP.
Essentially, this is where the magic happens because their needs become your LSP’s specialization. Hone in on that client whose needs fit perfectly with what your LSP is naturally suited to. In a way, it benefits you twofold. On the one hand, by niching down you'll get better at what you do because you’ll be doing a lot more of the same thing. On the other, you’ll be able to stand out from the crowd of generalist LSPs which means your ideal customer will go straight to you when they need your specialized service. Remember that it’s much more difficult for an LSP to sustain growth without a niche or specialization, especially when competing with providers who do have a very focused approach to their customer base. You want to be one of these difficult-to-compete-with providers! And you can be one once you establish your ICP.
If you’re better with visuals than words, this is basically what you’re after:
The sweet spot: where the market needs and your LSP's expertise meet
Incorporate your ICP into your marketing and sales processes
You’ve now got your ICP — great! But don’t stop there. The whole point of getting clear on your Ideal Customer Profile is to use it to shape your business’ systems and processes. Make sure your marketing and sales teams know exactly who your ICP is. It should always be top of mind and guide your marketing team’s decisions around campaigns and content strategies, as well as your sales team’s approach to engaging and motivating prospective clients.
Revisit and refine your ICP
Remember the basics of business: plan, implement, collect results, evaluate, and make adjustments. This applies to your ICP too — it’s an ever evolving concept that should reflect the changes in the market and your business as it grows.
To give an example, over time, relationships with your existing customers may change. It may be through digital transformation, changing content requirements, or new languages. Regardless, you have to keep on top of all these developments to keep your existing clients happy.
But changes can come from within your business too. You may invest in new technologies, discover new market demands, or hire salespeople with experience and relationships in other markets. This may lead to questions like: Are customers in those industries now more appealing than your current customers? Are you better suited now to these demands than you were a few years ago? Similarly, you may have found new vendors that provide great translations in new language combinations. Would partnering with them to offer additional services be a good move for your business?
Refining your Ideal Customer Profile is a continuous process throughout your business’ lifecycle, so always be willing to make adjustments to keep your LSP moving forward.
Just ICP your LSP
I know, ICP is not a verb, but let’s go with it because it’s all about putting it into action. Just get out there and talk to your current or potential clients to get a clear idea on your ICP. Once you do, you’ll be able to identify where to find your next customers, how to better position your brand, start developing better pricing strategies, and improve your overall business operations.
And if you’re worried that you’re putting all your eggs in one basket and alienating a significant portion of the market, don’t be. You will be doing that, but that’s a good thing. By refining your positioning, you’ll attract more of the right clients and fewer of the wrong ones for you. There comes a point when it’s better to turn away customers who aren’t an ideal fit because they take away valuable time and resources which you should allocate to finding better clients and nurturing client relationships.
And if you're a new or small LSP struggling to find any customers (never mind your ideal customer!), don’t despair. We understand that the market is what it is and that you might feel forced to take whatever work comes your way. But if you push through and double down on building strong relationships in a specific market segment, you’ll eventually get to the point where you can pick and choose the clients you want to work with.