Your Agency’s ICP — Defining Who You're Built to Serve

Sei-Wook Kim (00:05.44) On today's episode, we're diving into ICP, your ideal client profile, the target audience your agency is designed to serve. We're going to break down the five dimensions of a real ICP and why most agencies stop way too early in defining theirs. Peter Kang (00:21.14) All right, so let's first talk a little bit about why ICP matters. You hear a lot when people talk about positioning exercises or any brand strategy work, it's always like, hey, who's your target audience? Who's your ICP? But in the case of agencies, why do ICPs really matter? Why don't you kick it off and just list a few things. Sei-Wook Kim (00:45.687) If you think about a well-defined ICP for an agency, there are a lot of downstream effects of that. One is your sales cycle should shorten because you have a very specific target that you're going after. The delivery from your team improves. And then ultimately the margins of the agency should improve. Peter Kang (01:10.313) To talk about the negatives first — because if you think about every bad client you've ever had, and if you're an agency leader being honest with yourself, these are all clients that you took through your sales process. It's not like somebody snuck in and suddenly became a client overnight. The agency leader made deliberate choices to bring on a client, and typically this happened because the client had money to spend and they were like, hey, I need something done. I need some marketing help, some brand help, some digital web help. And that felt good enough. As a result, the agency took on a client that ended up not being a good fit. This is something that's plagued anyone who's been in this kind of business — you and I, we've had our fair share of these situations. So, back to your point, a well-defined ICP is all about helping you avoid these poor-fit clients who show up with money but at the end of the day aren't about fit. Sei-Wook Kim (02:27.084) Yeah, that's a key point. Without an ICP, you're just taking on anyone who will pay you — anyone who has money and will come through the door — without a clear rationale on why you should be taking on that client or not. Peter Kang (02:48.307) Yeah, the other side of the coin is if you have a really well-defined ICP, it's going to help you sharpen your go-to-market — how you think about messaging, the marketing campaigns, as well as your sales process. It's all about that additional step towards differentiation and being more competitively advantaged versus the others in the market. And maybe speak to the concept of engagement yield that we talked about in episode 25? Sei-Wook Kim (03:18.92) Yeah, in that episode we talked about this concept where if you have a client that is really well-fit within your portfolio, it generates more proof points that you can use to land more business. There could be referrals from that specific client and a similar ICP. And then there's a lot of leverage you can develop through processes and all the learning that your team has developed from working with that very specific ICP. Versus if there is a client that doesn't fit, you have the concept of negative yield, where it actually hurts you on all those points by taking on that client. Peter Kang (04:03.055) Yeah, we're going to do this deep dive on ICP today because it's also a very important part of what we at Barrel Holdings call the Agency Growth Engine. This is basically our go-to-market model, our business development model. And underlying this growth engine is what we call the Foundation. The Foundation really has four components: it's positioning, the ecosystem (which we did an earlier episode on), ICP, and service offering (which we did another episode on as well). Those four interconnected components — the ICP is informed by the ecosystem that you belong to, as well as the service offering, which is about serving your ICP. Once you start seeing all these pieces working together, it really forms this bedrock from which you can do a lot more effective business development. So that's just a little context on why we think this topic is worth diving into. If you go to agencyhabits.com, we'll continue to have more content around the Agency Growth Engine as well as the Foundation concept. So let's dive in. Sei-Wook Kim (05:14.699) All right, sounds good. So we have five dimensions of the ICP we want to go through today. The first being firmographics — thinking about who the business is structurally. There are different characteristics you can use to define that. It could be things like what is the industry or vertical it's in? What is their revenue size or funding stage? How big are they? How many employees do they have? Geographically, where are they located? What is their specific business model — is it B2B, B2C, is it a SaaS business, subscription, e-comm, et cetera? And is there any platform or tech stack that it's focused in? Peter Kang (05:58.716) Yeah, based on what your agency does, some of these things might be more relevant than others. For example, if you're doing mainly brand creative work, maybe the platform and the tech stack is less relevant. But what we're trying to do here with these characteristics is to really encourage agencies to go a bit deeper than the surface level of high-level industry and revenue. We don't think that's enough. We often hear, hey, what is your ICP? And they go, we work with B2B SaaS companies. And that's where it stops. If you go a level deeper, something a bit more useful might be like, hey, we actually work with Series A to B SaaS companies. They might be running on HubSpot specifically, and now they've outgrown their first marketing hire. That's our ICP. That's a bit more useful. It's basically encouraging folks to use these characteristics to better define the firmographics of their ICP. Sei-Wook Kim (07:10.024) Yeah, and within that description, even words like "we work in tech" is a broad categorization. There's cybersecurity businesses, dev tools, consumer tech businesses, and they're all very different in how they operate, who they target, and how you can service them. How deep can you get with your definition to really narrow down that ICP? Peter Kang (07:38.415) Yeah, and to that point, it's also a reflection of how expert you are — being able to really define and identify some of those sub-niche categories. If you go, hey, we work with CPG, which we've often talked about for one of our agencies, Barrel — within that there's food and bev. But within that, it's really like shelf-stable products, and you can go even deeper because along food and bev dimensions there are a lot of different categories. Are you a distributor? Are you a food service business? There's so much you can go into. And this goes back to ecosystem — it's going to inform where you've got to show up. Sei-Wook Kim (08:30.694) Awesome. So let's go into the next dimension, which is the buying trigger. You can see the target — but when are they ready to make a decision? Typically we might see this as a big funding round, which is a trigger for them to engage an agency like yours. Maybe they launch a new product line. Maybe there's a new CMO or new executive at the company that joined. Or they're going to do an expansion to a new region, or a platform migration, or there is some kind of trigger in their business that's causing them to look outward for an agency to support them. Peter Kang (09:13.52) Yeah, and to that point, agencies have to understand that 99% of prospects probably are not in market at any given time. This is why blanket cold outbound gets low signal — most of the time people aren't in market to buy these services. Sei-Wook Kim (09:35.177) For all these triggers, what are the things that can inform you when these things are happening? One easy thing — LinkedIn. You can see when someone is moving from job to job, or they have a job post up, or there's some kind of trigger you could see externally, or public funding announcements. What are the things that are out there that you could lean on to land that client? Peter Kang (10:10.596) Yeah, and nowadays with some of these automation tools out there, you can get data piped into your outbound lists. You can get, hey, this CMO changed their job — that data can be used to enrich your list. Or you're following a Crunchbase or some kind of funding news source and piping that in. There are a lot of ways these triggers can be very much a part of your go-to-market. Sei-Wook Kim (10:45.928) Yeah, and timing is everything there. We actually talked about this in episode 18 where we talked about relationship and referral systems. Even if you think about past clients or people that refer you business who are connected to these companies — can you use these triggers to re-engage them? You saw something, so you can reach out. Someone who said no six months ago — suddenly there's this new thing that happened in their business that makes it the right time. That could change everything. Peter Kang (11:25.827) Yeah, and it's so important you bring that up, because how many times have we seen something on the news — this company got bought by so-and-so — and maybe we haven't worked with them for six-plus months. You reach out to a director of ecomm or CMO or whatever, and all of a sudden they're like, hey, we were really budget-strapped, but now with this acquisition we've got some extra budget and would actually love to talk to you about this thing that's coming up. It's happened multiple times. It's totally there for the taking. Sei-Wook Kim (12:03.834) Yeah, or even a press release can have all the insights — this company got acquired so that they can expand to a new region. Cool. I have that insight now that wasn't available before. Using all that knowledge to your advantage. Peter Kang (12:20.449) Exactly. All right, let's move on to the third dimension, which we call success definition. This is all about what the client is trying to achieve. A lot of agencies fall into this trap of being what we call agency-oriented — all about, hey, we do awesome work, we have a great process, it's about us. Instead of being client-oriented. This is more about what's the client trying to achieve, what does success mean for them, where are they trying to go? It's about flipping that orientation from agency to client and being able to put yourself in the shoes of the client and really think about what moves the needle for them. Sei-Wook Kim (13:10.887) Yeah, and the buying trigger could actually be a hint at what they see as success. But ultimately it's really about having a conversation and understanding what is the business outcome they're hoping to achieve. Is it growing sales? Is it reducing costs? Is it expanding — we need to launch in this new region in the next quarter? Is there a time constraint? Everyone has a different reason why they need help, and it's really important for you to figure that out early on in the process. Peter Kang (13:48.763) Yeah, when it comes to success criteria, sometimes it's also imposed on a client by an intermediary. For example, a private equity firm has acquired a company and that company happens to be your client. The private equity firm has these growth goals — under the banner of value creation, they want to make sure the business is hitting certain goals. That's a really clear success definition that the client is going to be aligned to, and that's our cue to understand it and be able to speak to it. Sei-Wook Kim (14:36.743) Yeah, we've seen that in multiple cases — it could be a cost reduction or an opportunity to create value in the business from someone like a private equity firm. Another one I think about is for the stakeholder, the person who's actually engaging you — maybe they just need to show progress in their role. Their goal is to make themselves look good to their boss. Do you make them personally look good? There could be business goals attached to that, but there's a personal goal for them to achieve in this process. And it may not be tied to a specific number like a revenue goal. Peter Kang (15:24.683) Yeah, I remember we were working with a large tech client and our stakeholder was very clear — hey, these are my OKRs for the quarter that I need to hit. And it actually didn't have much to do with the overall business goals; there were some internal metrics that had been predefined between this client and their manager. So it was about how do you use the agency to help achieve those OKRs? You come across situations like that and it's actually smart to dig into that and understand what the success definition is here. Sei-Wook Kim (16:06.948) Yeah, and those are often the best relationships that you develop. You really help them advance in their career, they go to another company, they remember you helped them out, and they can bring you along from company to company. Peter Kang (16:20.717) Yep, exactly. And basically it's all about surfacing this. It's so important during the sales process to first have that explicit conversation — a lot of it is this kind of desired future state question, whether it's like, hey, a year or even six months after we wrap up, how will you know that this was worth it? Just imagine what it's like six months down the line, what's changed. Having those kinds of conversations is going to open up this idea of what success could be for that client. Sei-Wook Kim (16:57.028) Awesome. So the next dimension of the ICP is the buying committee — understanding who's making the decisions at the company. There are a few different layers here. Who's the economic buyer? Who's actually signing the check and owning the budget? Who's the person you're talking to in the sales process? Who's the champion — who's really pushing for the agency to be brought on and is feeling the pain in their day-to-day? There could be other people from the team. If you're doing something technical, there could be a technical owner or a CTO who could be really pushing to make sure you're up to their standards. And there could be other people involved in that decision-making — procurement teams, other agencies the client is already working with and how they play into the equation. It's really just understanding what is the ecosystem of the company and how they make this decision. Peter Kang (18:07.783) Yeah, the reason to think through this during the ICP definition process is that it's a big part of just really mapping what different scenarios could be. You might define the firmographics and be like, all right, we're going after a client in this industry of this size, blah blah — but when it comes to the configuration of how they're buying, that's equally as important, because you're going to get very different dynamics based on what that buying committee looks like and who actually is the buyer. What an ICP really requires is defining who this buyer is, because so much of that is going to determine how you message them and even the ecosystem — where do these specific buyers and the people making these decisions actually hang out, who do they affiliate with, and all those things. That's why it's so important to spend a lot of time here. And the bigger piece is to know that oftentimes there's going to be a difference between who you're interfacing with during the sales process and who actually gives the green light. In many instances, your job is to equip this person — oftentimes the champion — with the messaging and the materials to sell it internally and get the ultimate decision maker, maybe the economic buyer, to sign off on it. This is something we've heard many times. We have a sales coach, Luke Maloney, who works with our agencies, and he's brought this up many times — hey, you've got to do a great job of making sure your champion has everything that person needs to convince the others within the organization. Sei-Wook Kim (20:05.282) Yeah, and part of that is, if you're lucky, you can actually get in front of the decision maker and vouch for yourself and present yourself versus having an intermediary. But it depends on the company. At a certain level or however a company is structured, that may not be the case and they will always want that intermediary that you have to go through. It can also be where, depending on the size of company, if you have an early-stage company where the founder's involved very heavily day-to-day, they could be the decision maker. You're working directly with the CEO and founder of the business and that is your process. But depending on all the factors, it could be a very different buying committee that you're dealing with. Peter Kang (20:54.558) Yeah, and I want to note the anti-pattern I've seen with agencies where they're totally blind to this. They'll just talk to anybody that shows interest. Somebody reaches out — it could be an intern or an admin or somebody who's basically just putting together a bunch of proposals. That conversation might feel good, and maybe this person you're interfacing with seems really impressed. You're getting all these positive signals and feeling good about, hey, I think we've got a chance here. But by not digging enough into what that actual buying committee looks like, you only realize much later that you haven't even made it to the actual decision makers who are going to care. The information conveyed to them is basically a few bullet points, and at that point it's all apples to apples — they're shopping on dimensions that make you just one of many in a commoditized way. This is what we want agencies to avoid. Sei-Wook Kim (22:04.481) Yeah, one situation we've run into is where marketing for a web project might own the budget and be driving the project, but what you didn't realize is the CTO of the business is the one making the decision and their voice is the loudest and will influence all of that. And it's not their budget from a CTO perspective. But if you miss that signal throughout the whole journey, you need to address all the questions and conversations on that side of the equation — or you could just be blind to how the decisions are being made. Peter Kang (22:42.153) Yeah. And if you haven't satisfied that CTO, you realize, hey, we've gone in another direction. You try to dig into why and it's like, hey, you didn't make us comfortable with some of these things. Sei-Wook Kim (22:52.982) Yeah, exactly. Peter Kang (22:57.577) Maybe just before we move on to the fifth one, let's talk a little bit about success definition and buying committee again in terms of how it might not be just one clear answer for those. Sei-Wook Kim (23:13.344) Yeah, we've touched quite a bit on the different combinations of people who can make those decisions in the company. If you think about success definition — if somebody has certain KPIs they're trying to hit, that CTO example is a good one where it's like, all right, we need to re-platform for some technical reason. That is the business outcome, and then the buying committee could look different where the marketing person is involved. They can overlap quite a bit. Depending on who you talk to in the buying committee, they might have competing priorities, and sometimes it could be a loudest-voice-wins situation — or actually you need to address the success criteria for each of the people for them to feel comfortable bringing you on. It's almost asking the questions all the way through for each person: what's success for them six months after launch or after we're finished? How do we know if we were successful? How will you know if this engagement was worth it? Having that conversation with each of the people who are involved. Peter Kang (24:28.093) Yeah, and what a lot of agencies will find is that the more you interface with different types of businesses — even if on the firmographic side they're seemingly the same kind of org — every org still has differences in how they structure certain things and how they think about success. The exercise of continuing to map that, write it down, and debrief with the team is going to keep adding to your ability to speak to these folks and navigate the selling process. Sei-Wook Kim (25:05.729) Yeah. So the fifth dimension is thinking about the disqualifiers — things beyond who the company is and the stakeholders. What are some common things you should use to disqualify prospects? Things like if there's no clear owner — it just feels like the decision is being bounced around and isn't going to be made. If there's no urgency, they're just shopping around, there's no trigger forcing them to make a decision. If they don't have a defined budget or aren't sure who's going to pay for it internally. If there's misalignment on how they work with you — if you have a process and they disagree with it and you have some core misalignments there. If you talk to them and learn they've been through five agencies in the past year, you know there's a track record of challenges working with that company. Those are just some examples of disqualifiers. Peter Kang (26:22.498) Yeah, and part of this is — we spent the first four dimensions really defining who we want to go after and what characteristics that entails. But this is really the inversion exercise, because sometimes you can learn a lot this way. This is the classic Charlie Munger "invert, always invert" approach — why don't we go deep into who we don't, won't work with? In some ways these are the non-negotiables during your sales process, the things that disqualify potential prospects even if they come with a load of money. A big one is obviously value alignment. These might be products you don't believe in, or you just have a bad feeling about the integrity of the business that's in front of you wanting to work with you. What are those signals? Maybe it's certain types of industries or affiliations that you just don't want any part of, and that's okay — you can always say no. That's part of being a private business. You have that right. And yeah, it's about going beyond the understanding that look, we all need to generate revenue, but we also know that having this kind of discipline is going to be beneficial. So just putting that down on paper. Sei-Wook Kim (27:50.129) Yeah, a helpful exercise for this is going through clients from the past that you've learned lessons from — man, we really shouldn't have taken on that client because of XYZ reason, like there were signs. Writing it out, and for each disqualifier having a vivid, right, this is the client that this disqualifier came from — and seeing if that aligns with your future state of, all right, we want to work with these kinds of clients, but if we see these flags, it's a warning sign. It may not be a hard disqualifier, but definitely worth discussing. Peter Kang (28:31.845) Yeah, and here's a very important nuance to all of this. We encourage folks to make this list and act on it, but it doesn't mean you are rude or unhelpful to folks. At the end of the day, every prospect that reaches out and is interested in working with you is a potential client — maybe not now, but potentially later. They might be working for a company whose products you have an issue with for whatever reason. But remember, it's a human being on the other side, and that person could go on to work somewhere else that might be more aligned with a product or service you want to work with. You can still take the call, be helpful, but be very clear — actually, it's our policy not to work with whatever, but hey, here are some other folks I can introduce you to, or here are some thoughts I have on this, just so you know we're unable to take on the project at this time. Make it feel good, because it's just another investment in a relationship that could blossom down the line. Sei-Wook Kim (29:51.994) Yeah, actually thinking about the buying triggers — one of the disqualifiers I mentioned was if there's no urgency or no budget outlined, or the budget was lower than expected, that could have been an easy disqualifier. But there could be a trigger where they just raise a ton of money and need to do something immediately. That could easily flip things — if you had a good conversation with them, it didn't work out for a variety of reasons, but six months later they remember your good conversation and reach back out, and you're in again. Peter Kang (30:23.462) Yep, awesome. So those are the five dimensions of ICP. Just to wrap it up, some practical next steps for our listeners. This is an exercise we've done across our agencies as well. Take your last 10 clients that you've signed and just think about what the best ones have in common across these five dimensions. When you take a look across all those things, that's likely your real ICP — there's probably a pattern that emerges. Definitely write this down, share with the team, have a discussion around it. Then ask yourself, is this the ICP you want to keep or does it need to evolve? If you want to keep it, maybe there are ways to go even deeper and get more specific. If you need to evolve it, maybe you have to rethink some of the things you're doing — the ecosystem you belong to or the service offering as well. Keep in mind the ICP doesn't shrink your market. It's all about focusing your energy so you're able to increase the quality of deal flow, better margins, better go-to-market, all those things. With that, a plug — if you want to test out what your ICP looks like, check out our tool at foundation.agencyhabits.com. In 60 seconds, it'll give you a snapshot of what it detects as your ICP and suggests what it could be. Please give that a try. Till next time, thanks for joining. Take care. Sei-Wook Kim (32:04.573) Thanks.