Fractional Revenue Leader Blog | B2B Growth & Sales Strategy

Why Your ICP Is Fiction (And Your Leads Show It)

Written by Ian Spencer | Nov 13, 2025 8:22:00 AM

Last week, I sat across from a Series B founder who'd just burned through £400k in marketing budget with nothing to show for it. "We're targeting exactly who we should be," he insisted, sliding his ICP document across the table. "Enterprise SaaS companies, 200+ employees, £50M+ revenue."

I pulled up his CRM. Of his 30 paying customers, exactly two matched that profile. Both were his smallest deals. Both took nine months to close. One had already churned.

His real money? Coming from 50-person agencies he'd never bothered to properly target.

This isn't unusual. It's the norm.

After analysing revenue data from over >200 B2B companies, I've found that 80% are chasing an ICP that exists only in their pitch decks. They're generating thousands of leads that will never convert, burning through sales resources, and wondering why growth has stalled.

The brutal truth? Your ICP is probably killing your revenue.

The Comfortable Lie We Tell Ourselves

Here's how most companies build their ICP:

  1. The founder picks a market that sounds impressive
  2. They create a profile based on who they want to sell to
  3. Marketing generates leads matching those criteria
  4. Sales complains the leads are rubbish
  5. Everyone blames execution, not strategy

I call this "ICP theatrics"—we're performing for investors, not building for reality.

Three months ago, I worked with a martech founder convinced his ICP was "B2B technology companies, Series A funded, 50-200 employees." Seemed reasonable. Sexy, even. The type of logos that look good on a website.

Except when I analysed his revenue data, his profitable customers were professional services firms with 10-30 employees. Accountants. Law firms. Consultancies. The "unsexy" businesses he'd been actively avoiding in his ICP.

He'd been fishing in the wrong pond for two years because the right pond didn't match his vision of success.

Your Revenue Data Doesn't Lie (But Your Assumptions Do)

Here's the framework I now use with every client—I call it "Customer Archaeology":

Step 1: Excavate Your Best Customers Forget your assumptions. Pull your customer data and rank by:

  • Lifetime value (not just initial deal size)
  • Time to close (velocity matters more than value)
  • Expansion revenue (the compound growth engine)
  • Referral generation (your zero-CAC channel)
  • Support burden (inverse relationship with profitability)

Your top 20% by these combined metrics? That's your real ICP starting point.

Step 2: Dig Deeper Than Demographics Demographics are lazy thinking. Two 100-person SaaS companies can be completely different businesses. Instead, excavate:

  • What triggered their buying process?
  • Who actually championed the purchase internally?
  • What were they doing before you came along?
  • Why did they choose you over alternatives?
  • What specific results did they achieve?

I once discovered that 80% of a client's best customers had one thing in common: they'd just hired their first revenue operations person. That insight transformed their entire go-to-market strategy. No firmographic data would have revealed it.

Step 3: Follow the Money Trails Your P&L tells the truth your ICP document won't:

  • Which segments cost least to acquire?
  • Where's your highest gross margin hiding?
  • Who expands without constant upselling?
  • Which customers never burden support?
  • Who pays on time without chasing?

One client discovered their "enterprise" focus was haemorrhaging money. Support costs were astronomical. Implementation took months. Meanwhile, their SMB customers—the ones they barely serviced—were 3x more profitable and referred like crazy.

 

The Brutal ICP Reality Check

I run every client through this diagnostic. If you're brave enough, do it yourself:

  1. The Churn Test: If more than 20% of your ICP-matched customers churn annually, your ICP is wrong. The market is rejecting your hypothesis.
  2. The Sales Cycle Test: If deals matching your ICP take 2x longer than others, you're targeting people who don't urgently need you.
  3. The Effort Test: If you need heavy customisation or professional services for your "ideal" customers, they're not ideal—they're expensive distractions.
  4. The Reference Test: If your ICP customers won't enthusiastically refer you, you're not transformative for them. Find who you actually transform.
  5. The Pricing Test: If you're constantly discounting for ICP matches, they don't value what you offer. Value perception is reality.

Why Your Best Customers Aren't Who You Think

Here's what I've learned after analysing hundreds of B2B revenue engines: founders consistently ignore their best customers because they don't match the vision.

  • You wanted enterprise logos, but SMBs love you
  • You built for tech companies, but traditional industries need you most
  • You targeted London, but Birmingham converts better
  • You assumed CMOs buy, but operations leaders actually sign

Last year, I worked with a sales tech founder who spent three years chasing VP Sales at high-growth startups. Classic ICP thinking. Turns out, his best customers were finance directors at traditional businesses using his tool for commission calculations.

He'd been speaking sales language to sales people, when he should have been speaking efficiency language to finance teams. The product didn't need to change—just the positioning and targeting.

The market had been screaming the answer through his revenue data. He just didn't want to hear it.

Building an ICP from Reality, Not Ambition

Here's my proven process for building an ICP that actually drives revenue:

Week 1: The Honest Audit

  • Export all customer data from the last 24 months
  • Score each on the five value metrics
  • Identify your true top 20%
  • Accept what the data tells you (this is the hardest part)

Week 2: The Deep Dive

  • Interview 10 of your best customers
  • Ask why they really bought (it's never your features)
  • Understand their actual buying journey
  • Map their path from problem awareness to purchase

Week 3: The Pattern Hunt

  • Look for non-obvious commonalities
  • Industry vertical often doesn't matter
  • Company stage beats company size
  • Technology stack predicts readiness
  • Team structure indicates urgency

Week 4: The Reality Test

  • Rebuild your ICP from scratch
  • Test it against your current pipeline
  • Calculate conversion rates by segment
  • Let data drive the final definition

The Lead Generation Transformation

Once you build an honest ICP, everything changes:

Marketing stops wasting budget on impressive logos that'll never buy. Sales stops chasing deals that'll never close. Product builds features for customers who'll actually pay. Customer success supports segments that stick around and expand.

Last quarter, I helped a client rebuild their ICP using customer archaeology. They discovered their best customers weren't "high-growth tech companies" but "traditional businesses hiring their first digital transformation leader."

Results after 90 days:

  • Lead volume dropped 60%
  • Lead-to-opportunity rate increased 400%
  • Average deal size up 150%
  • Sales cycle reduced from 95 to 65 days
  • CAC down 70%

They generated fewer leads but tripled revenue. Funny how focusing works.

 

Your ICP Liberation Checklist

Ready to stop living the ICP lie? Here's your action plan:

  1. Accept the current fiction: Your ICP is probably wrong. That's liberating, not devastating.
  2. Analyse lifetime value ruthlessly: Stop celebrating logos that churn. A customer isn't successful until they renew.
  3. Interview your best customers: They'll tell you exactly who else to target. They know their peers.
  4. Follow the profit, not the revenue: £100K from a painful enterprise deal is worth less than £50K from a happy SMB.
  5. Embrace the unexpected: Your best segment might be deeply unsexy. Unsexy often means underserved.
  6. Test and iterate quarterly: Your ICP should evolve as you learn. Static ICPs are dead ICPs.
  7. Align the entire organisation: Everyone needs the same definition. No exceptions.

The Truth Will Set Your Pipeline Free

I get it. Admitting your ICP is fiction feels like failure. You've built campaigns, hired teams, made promises to investors based on this profile. There's sunk cost. There's ego.

But here's what I tell every founder: the market doesn't care about your ICP document. It's already voting with budgets, showing you who desperately needs your solution, who'll pay premium prices, and who'll become evangelists.

You just need to listen.

The founders who scale successfully aren't the ones with the prettiest ICP slides. They're the ones honest enough to serve the customers who actually want them, not the ones they wish they had.

Your conversion rates are telling you something. Your sales cycle is screaming it. Your churn data is spelling it out in neon lights.

The question is: are you brave enough to listen?

Because once you build an ICP from reality instead of ambition, everything changes. Lead quality skyrockets. Sales cycles shrink. Revenue becomes predictable. Growth compounds.

And that fictional ICP? It transforms into a customer profile that actually drives revenue.

Time to do the archaeology. Your real ideal customers are waiting to be discovered.

They're probably not who you think they are. And that's the best news you'll get all year.

Ian Spencer is founder of The Revenue Nomad and Revnuu.io, helping B2B companies uncover their true ideal customers and build revenue engines that scale.