Getting your Ideal Customer Profile (ICP) right is one of the most overlooked yet powerful levers in sales.
Often, ICP design is treated as a quick exercise. Something you sketch out in a spreadsheet with a few filters, like industry, company size, and revenue band.
On paper, it looks tidy. In practice, it rarely holds up. Sales teams still waste time chasing poor-fit leads. Messaging still struggles to land.
Pipelines still stall.
The problem is simple?
Why most ICPs fail in practice
Most ICPs stop at the surface. They don't dig into intent, they don't consider buying dynamics, and they don't focus enough on the real-world problems customers are facing and trying to solve.
If your ICP doesn't help you segment effectively, tailor your messaging, and direct your energy towards high-probability wins, then it's not doing its job.
Demographics over problems
The most common mistake is building an ICP around demographics rather than problems.
Saying you target "SaaS companies with 50–200 employees" is nothing more than a filter.
It tells you nothing about why those companies would buy from you, or why they'd buy now.
An ICP built on surface-level descriptors might look neat for marketing slides, but it leaves your sales team flying blind when it comes to resonance and urgency.
Going too broad
Leaders are often reluctant to narrow their ICP because it feels like closing doors.
But in reality, a broad ICP is far riskier than a narrow one.
If your ICP feels like it covers "anyone who might buy," your messaging gets diluted, your outreach lacks edge, and your team spreads itself too thin.
A strong ICP should feel uncomfortably narrow, because focus is what drives traction.
Confusing TAM with ICP
There's also a frequent confusion between Total Addressable Market (TAM) and ICP.
Just because a sector is large does not mean it is winnable for you.
Your ICP is not your TAM. It is the slice of the market where you can repeatedly succeed.
That's the difference between a theoretical opportunity and a practical path to revenue.
No exclusions
Most ICP documents talk about who is a good fit, but rarely define who is not.
That's a big gap.
Without clear exclusion criteria, your sales team wastes time pursuing leads that were never going to close: companies with tiny budgets, firms at the wrong stage of maturity, or industries where the sales cycle is painfully slow.
By failing to define the "no-go zones," you leave your pipeline cluttered with distractions.
Treating it as static
Too many leaders also treat ICP design as a one-off task rather than a living framework.
Markets change, your product evolves, and every deal you win or lose gives you new information.
Yet many businesses leave their ICP untouched for years.
The reality is that your ICP should be reviewed regularly, quarterly at minimum, using the lessons from closed-won and closed-lost analysis to sharpen the profile.
Forgetting buying dynamics
Some companies look perfect on paper but are terrible to sell to.
Long procurement cycles, complex decision-making structures, or lack of access to senior decision-makers can all make a seemingly ideal customer unworkable in practice.
A useful ICP doesn't just describe who the customer is, it describes how they buy and how fast you can get a deal done.
Writing it for marketing, not sales
The thread running through all of these mistakes is the same.
ICPs are often written as marketing descriptions instead of operational sales tools. That's why they don't deliver.
A framework for building an ICP that works
As with everything, there's the wrong way and the right way. So here are some guiding principles that can help you refocus on what will help you connect more effectively with your idea customer and their challenges.
Start with the problem, not the persona
If you want your ICP to create genuine value for your sales engine, you need to approach it differently.
Instead of thinking of it as a neat description of your "ideal" buyer, treat it as a filter for where to spend your team's time, money, and energy. That shift in mindset is crucial.
The starting point is always the problem you solve, not the persona you imagine. Begin by asking what specific challenge your product or service addresses most effectively, and then work out which types of companies feel that pain most acutely.
Crucially, you also need to consider urgency, who feels the problem strongly enough that they are ready to act now?
For example, saying you target
"mid-market SaaS companies who've hit a growth plateau because their outbound pipeline isn't working" is far more actionable than saying you target "tech companies with 50–200 employees."
The former connects directly to a business pain, while the latter is just a demographic bucket.
Define hard qualifiers
Once you're clear on the problem and urgency, you can then identify the hard qualifiers.
These are the non-negotiable traits without which a company simply isn't in your ICP.
Think about company stage, technology maturity, budget capacity, or business model.
If those boxes aren't ticked, you're wasting your time pursuing them.
Hard qualifiers help your sales team quickly rule out poor-fit leads and focus on prospects with a realistic chance of closing.
Identify soft qualifiers
From there, you can think about soft qualifiers.
These aren't essential, but they increase your chances of success and help you prioritise accounts.
Examples might include hiring patterns that suggest growth, recent funding announcements, or signals that leadership has a forward-looking mindset.
While these criteria won't disqualify a lead, they should influence how you allocate time and resource within your pipeline.
Define exclusions
Exclusions are just as important as inclusions.
You need to be disciplined about defining who is not worth your time.
Perhaps it's highly regulated industries that stall your sales process, or very small teams with no budget to spend, or companies still determined to "do it themselves" instead of outsourcing.
Writing these down prevents your team chasing leads that are destined to waste months of effort.
Build a tiered ICP
Another way to make your ICP more practical is to tier it.
Not every lead is equal, and pretending they are is a mistake.
By categorising your ICP into Tier A, B, and C, you create clarity about where the highest-value opportunities sit.
Tier A should represent your perfect-fit customers, those who look like your best current clients and are the easiest to win.
Tier B is a good fit that might take more work.
Tier C are opportunistic. If they come inbound, you can consider them, but they are not worth a structured outbound effort.
This tiered approach gives your sales team the clarity to double down on the best bets without ignoring the long-tail opportunities that occasionally come through.
Test and refine continuously
Finally, your ICP needs to be treated as a living document.
It should be tested and refined constantly through feedback from real deals.
Every quarter, analyse your closed-won and closed-lost opportunities.
Which customers expand, renew, and refer most?
Which deals drag or churn early?
What signals showed up at the very beginning that could have predicted the outcome?
Feeding this insight back into your ICP design ensures it remains sharp and practical, rather than a static PDF that sits forgotten in a folder.
Let's wrap this up
Your ICP is more than a marketing exercise. It is the operating system for your sales strategy.
If it's too broad, too static, or too focused on demographics, it won't deliver.
But if you anchor it to the problems you solve, define clear qualifiers and exclusions, tier your prospects, and refine it continuously with real-world feedback, you create a tool that gives your sales team clarity and confidence.
The single most important thing to remember is this: bring your market challenges into your ICP.
Unless your ICP connects your value proposition to the real problems your market is experiencing, you will never create a joined-up sales journey.
You'll just have a spreadsheet of companies, not a strategy.
So ask yourself. Does your ICP tell your team where to win, or is it just a list of filters?
The difference matters.
If you want a sales engine that delivers scalability, predictability, and sustainability, it's time to sharpen your ICP and use it as the weapon it was meant to be.