Have a product or service that you sell to restaurants? It’s probably time to write down your ideal customer profile.

Realistically, what percentage of the foodservice industry is currently both serviceable and obtainable based on what you’re selling?

The truth is, most companies only sell to a portion of the hospitality space. Some to a very small portion. In order to better define the right swathe of the industry that is the most meaningful to your business, you need to know what variables to consider, why they’re important, and how to define and measure them over time.

The exercise of focusing the Total Addressable Market (TAM) into a more concrete, meaningful Ideal Customer Profile (ICP) can be a difficult and sometimes frustrating one. But for those who do it well, micro-targeting the industry into actionable segments can yield tremendous short-term and long-term benefits.

Here are four steps to follow as you work to document and prove out your ICP:

First, a note about our approach

Many companies design their qualification and discovery processes around gathering the right pieces of information to then bucket prospects into ICP and non-ICP groups. Thematically, we typically see 2 areas of interest:

1. What do we know about their company, and
2. What do we know about their tech stack

The idea here is that with ample amounts of attributes at your fingertips, it becomes rather easy to assess how each element influences your approach to marketing and selling. Respectively, we’ll refer to these as firmographic and technographic insights.

Step 1 – Define your ICP in writing

Qualifying a restaurant for firmographic insights, which we’ve further defined here, can often be done without contacting the restaurant directly. Nowadays, by visiting a restaurant’s website, you can often uncover a wealth of knowledge that then impacts whether or not they fit into your desired profile. With a bit of patience, or a good data partner, you can learn things like:

• How many units do they have?
• What are they known for? (coffee, tapas, barbeque…)
• What is their service type?
• What is their average price per guest?
• Are they owned by a larger group?
• Do they franchise?
• Where do they do business?

Here’s an example of what a fast-fact firmographic summary sounds like in the restaurant space:

11 units specializing in juices & smoothies, limited service (in-store and drive thru), $4-7 avg. per person spend. The concept is fully owned by a parent who has 87 units total. All stores are in Florida.

Similarly, companies selling software often want tech stack details so they know which partners, integrations, or competitors they may need to be aware of. These insights can also help understand how pro-technology a company may be, which in turn perhaps insinuates how open to change they are when faced with a business problem and hypothesized software solution. Technographic insights can include learning things like:

• What Point-of-Sale (POS) do they use?
• Do they have a loyalty program?
• Do they have a marketing automation/email provider?
• Is there an event management or catering partner?
• Can applicants apply online via a website?
• Are they using mobile apps for iOS and/or Android?
• Do they offer delivery? Is it third-party?
• Can you make reservations online or join a waitlist before arriving?

Here’s an example of what a technographic insight might sound like in the restaurant space:

Aloha POS, DoorDash and Uber Eats for third-party delivery, no existing loyalty or perks program, curious about mobile apps but nothing in the works.

So far, so good? Have a first version of an ICP you think helps define the target restaurants you want to go after? The goal before moving on to Step 2 is to have something written down that is the perfect combination of being specific, measurable, and realistic. If it is, you’ve got a measuring stick that can be used to benchmark restaurants when assessing new prospects, qualifying inbound interest, and that can be turned into a micro-targeted segment for outbound marketing and sales.

If you’re stuck, before moving on to Step 2, perhaps take a peek at what many other software companies come up with, which we discussed at length in our blog on how the US restaurant industry seems to feel both bigger (and smaller) than you would think.

Step 2 – Run your ICP against credible industry data

Once you have an understanding of the types of variables that can be measured, overlaying the DNA of your best customers on top of the entirety of the measurable multi-unit industry would be a pretty incredible next step. The goal is to zoom in on what is most important, and allow everything else to be intentionally sidelined (to be revisited in the future, see Step 4).

For many, the most logical place to start is with their CRM data. A small but lucky group of “data jockeys” will have quick reports with relevant filters, powered by really strong underlying data, and will be pivoting through Companies and Accounts as they begin flagging which prospects are worth targeting first.

For the rest, this second step can be really frustrating. Sometimes the hard part isn’t necessarily deciding what elements to focus on when defining your ICP, but rather finding a credible source of data that provides the line-item detail and insight you need to better understand the industry quickly and efficiently. Depending on the status and credibility of your company’s existing CRM data, and depending on how the business historically approached snapshot or recurring data acquisition, you may find that you’re staring at a bunch of noise or untrustworthy insights that do nothing more than slow down your progress.

Not sure if your business has good or bad data? Here are 4 reasons why your CRM’s restaurant data may be terrible.

Whether your data is pristine or whether you’re actively working to take back the reins, you’ll need a bottoms-up list of target Accounts complete with enough detail to begin testing and refining. Note that you’ll want a list of at least several hundred ideal prospects:

• too few and you may have a niche product or any overly specific ICP;
• too many and you may feel overwhelmed or have a hard time finding a place to begin.

Got your list? You’re ready to move on.

Step 3 – Test your ICP and refine if needed

Once you’ve written down your ICP and segmented your CRM into actionable campaigns or lists, it’s time to begin testing whether or not a laser-focused approach — that is, putting more focus on fewer accounts — is meaningful to your business.

The value prop here is fairly simple: by micro-targeting your sales and marketing efforts to selected accounts with similar attributes and potentially higher interest and value, are you able to record a measurable difference in things like number of deals, average deal size, and/or average sales cycle (eg “days to close”).

As a BDR, SDR, or Account Executive, focusing on ICP can improve things like:

• Better quality deals
• Faster deals
• Higher value deals

In terms of what it could it mean to your business, focusing efforts on ICP deals can improve:

• Your speed-to-market and lead-to-cash
• Your relevance when speaking to a tighter audience (specificity as opposed to broad strokes)
• Less cost covering segments that historically underperform

Based on your measurement time frame, budget, and tech stack, you may choose to consider controls such as A/B testing different marketing campaigns or SDR out-bounding scripts. This will ensure you’re not simply conclusion shopping by stating your ICP was a success without validating it thoroughly.

Step 4 – Repeat the exercise regularly

For companies of all shapes and sizes, the process of (re)defining your Ideal Customer Profile is something that should be repeated regardless of the industry, sector, or segment you serve. At a minimum it should be reviewed once a year, if only to validate that it is still relevant and meaningful to your business.

There are also a variety of reasons for which an off-cycle reassessment may be warranted, including things like:

• Mergers and acquisitions
• New products, features, or functionalities
• New markets or territories
• New industries

Separately, note that for companies selling more than one product, service, or software solution, having multiple ICPs, one dedicated to each product play or sales motion, is absolutely possible, and often recommended.

Conclusions

With the start of a new year, many companies are thinking about how to define their ICP for 2022 and beyond. But it’s important to remember that a simple, measurable, realistic ICP should have a measurable impact on your business. Racing through the exercise and choosing something too broad isn’t actionable and does you no favors. Worse yet, skipping the entire process because you simply don’t have access to the data you need to make it meaningful and strategic — a “self-fulfilling bad data prophecy” where you know you have a problem but are doing nothing to fix it — shouldn’t even be an option.