Playbook #12: How To Master Segmentation, Targeting, and Defining Your ICP

Introduction

How to Define, Prioritize, and Align Around Your ICP

For many founding PMMs, you are in on the ground floor of a business – figuring out how to find early customers, getting to product market fit, and helping your team focus on the right things. Even if your org is more established, it’s still your job to bring market-focused strategic thinking to the table.

This playbook will help you define your market, segment it with intention, and pick a target that actually moves the needle. So everything downstream (GTM, sales, product roadmap, etc.) works better.

Sizing Your Market (TAM & SAM)

Let’s start at the top.

Most people know TAM and SAM:

TAM = Total Addressable Market
SAM = Serviceable Addressable Market

And most people even know ICP:

ICP = Ideal Customer Profile

Newsflash: your ICP is rarely your whole SAM. Just because someone could use your product doesn’t mean you should sell to them.

Trying to serve your full SAM leads to:

Bloated roadmaps
Muddled messaging trying to speak to everyone and every use case
Inefficient go-to-market

Your job? Find the right slice of that SAM. One that’s big enough to matter (to your leadership, the board, etc.), narrow enough to win, and specific enough to build a strong strategy around.

How to measure TAM and SAM?

You can go super deep on TAM/SAM sizing (and for investor decks or pitches, you probably should).

But for your ICP and GTM planning, here’s the breakdown:

TAM is the total number of potential customers (if literally anyone who could use your product bought it)

SAM is your realistic subset of that TAM (people who fit your current capabilities, pricing, integrations, GTM model, etc.)

ICP / SOM — in many investor frameworks SOM is “share of market” (but in our case, we think about this as our ICP — the focused group we are going to target)

Example: let’s say you sell an AI customer support tool.

TAM = Every business in the world that has customer support teams
SAM = Companies that have modern chat/email-based support, are mid-market or bigger, and buy SaaS
ICP = Seed–Series B SaaS companies with 10–50 support agents using Intercom or Zendesk, in high-growth mode

That’s how you get from “the market” to your market.

What do you actually need to size it?

A few methods work well here:

Top-down approach

Use external data (e.g. industry reports, Crunchbase, LinkedIn filters)
Example: “There are 12,000 SaaS companies with 50–500 employees on Crunchbase”

Bottom-up approach

Start with your current revenue or deal sizes, and scale up
Example: “We charge $15k/year and could realistically land 1,000 of these in the next 3 years = $15M SAM”

There are a ton of great resources out there to help calculate TAM and SAM, some of my favorites are:

Calculator #1 (ours)
Calculator #2 (another one?)

Why segmentation and targeting matters

So now you know what segmentation is, but the real question is why does it matter? It isn’t just a spreadsheet exercise or something for the board, it’s actually the foundation for your entire GTM strategy.

Honestly, most of product marketing strategy starts here:

It sharpens your marketing strategy

Instead of trying to be everywhere for everyone, you can go deep on the channels, campaigns, and narratives that actually matter to your target.

It helps your messaging actually resonate

When you know who you're speaking to, it shows.

It makes it much easier to speak in their language, name their pains, and position your product in a way that clicks.

It creates a more specific buyer journey

From your homepage to your sales emails to your onboarding flow you can create an experience that’s specific to your ICP’s needs.

It influences your product roadmap

When you know who you’re building for, prioritization gets easier. Your product team can invest in features your ICP cares about, not just whatever the loudest customer wants.

Pro tip: this is actually how PMMs influence the roadmap – not through convincing people about a feature they think is cool, but by helping the right teams focus on the right customers and sharing the POV of that customer in a compelling way.

It strengthens your positioning

You can stake a clear claim:

“For [ICP], we solve [specific job] better than anyone else.”

Defining Possible Market Segments

So you’ve sized your TAM and SAM. And you understand the end goal of landing on an ICP.

Now what?

You can’t go straight from “everyone we could sell to” to “here’s our ICP.” This is where most teams skip ahead too quickly or just go with the CEO’s gut.

The proper next step is to break your SAM into meaningful market segments.

What is a market segment?

A market segment is a group of potential customers who share important traits like their industry, business model, stage, or needs. These characteristics influence how (or why) they’d buy your product.

This segmentation is what helps you see the patterns so you can score, compare, and ultimately choose your target segment.

There are a few classic ways to characterize and create segments:

Firmographics

Traits about the company itself:

Industry: SaaS, manufacturing, fintech, education, etc.
Company size: Headcount, revenue, # of locations
Stage: Seed, Series A, public
Business model: B2B vs. B2C, self-serve vs. enterprise
Geography: NA, EU, APAC — plus factors like regulatory pressure (e.g. GDPR)
Funding profile: Bootstrapped vs. VC-backed vs. PE-owned

Pro Tip: Funding rounds and stage can be great proxies for urgency and purchasing behavior. Series B companies tend to buy differently than bootstrapped ones.

Technographics

Traits about their tools and digital maturity:

Tech stack: Salesforce vs. Hubspot, Shopify vs. Wordpress, Google vs. Microsoft, etc.
Architecture: Cloud-native vs. on-prem
Digital maturity: Are they early adopters, or do they still have fax machines?

Pro Tip: These segments can be helpful if your product depends on integrations, APIs, or a certain tech stack.

Needs / Use Case

Jobs-to-be-done and pain points:

Pain points: Compliance risk, inefficiency, high churn, etc.
Use cases: Scaling support, automating onboarding, improving lead routing
Trigger events: Re-orgs, leadership changes, new regulation, recent funding

Pro Tip: This lens helps you focus on why someone might buy, not just who they are. This category is often overlook, yet SUPER powerful.

How to actually do this

My best advice is to start by looking at your existing customer base.

Dig into the data and ask yourself these questions:

What firmographic patterns do we see?
Are there clusters in tech stack or use cases?
What segments have the highest retention or LTV?
Which ones had the shortest sales cycles or least friction?

Then look beyond your current customers:

What new segments share similar traits to your best customers?
What segments do you hear about most often from Sales, Support, or Success?
Where could your current product realistically deliver value without major changes?

This is a great time to bring in cross-functional partners like Sales, CS, and Product and hear from their POV. This gets you a better understanding of reality and also creates shared buy-in during the process.

Selecting a Target Segment

Now the hard part: choosing.

This is where most companies start to struggle… if they try to serve every segment they end up resonating with none.

But it can be painful to say no to pursuing a totally viable customer base. So it is good to remember that your ICP strategy is not forever, it’s a starting point – what many call a beachhead.

Here’s a great image from the Co-founder of Fletch PMM, Rob Kaminski, sharing two potential growth paths that both start by winning a “beachhead market.”

“Once you dominate a beachhead market, THEN you can contemplate growth options. In fact, you'll actually start getting pulled into these growth paths — you'll start hearing stuff like:
“Can we use this for XYZ team?”
“Can I roll this out across our whole org?”
“Do you work with XYZ companies?”
That’s when you decide:
→ Do we go vertical and own the customer?
→ Or go horizontal and own the problem?”
- Rob Kaminski, Co-founder of Fletch PMM

In the image above, Salesforce went with a horizontal growth path (same problem, new segments) while Veeva went vertical (same segment, new problems)

The idea is to start small, win with one segment, and build repeatability.

Choosing the right segment

It helps to have a framework. Ours helps you assess and score each segment on a number of variables, that you can then use to make a more data-backed decision.

Here are the criteria I recommend scoring for each segment:

Segment Scoring:

How well does your product address the JTBD?
How underserved is this segment?
How differentiated are you in this segment?
How big is the segment? (# of companies, potential revenue)
How easy is this segment to reach? (potential channels, responsiveness, community engagement)
How easy is this segment to acquire? (cost to acquire, sales cycle length, complex deals, procurement hurdles)
How much effort will these customers require? (willingness to self-serve, need hands-on onboarding)
How engaged is this segment in our product? (daily active users, project-based)
How sticky is this segment? (historic churn rate)
How likely are they to upgrade/expand?
What is the potential LTV of this segment?

Don’t do this in a vacuum. Bring in:

Sales for insights on deal velocity and common objections
CS/Support to flag where friction or churn lives
Product to gut-check roadmap possibilities
Marketing to test narrative and channel fit
Leadership to align on business priorities

Turning your scoring into a decision

Even with a scoring framework, this is a big decision.

That’s why I recommend documenting your rationale in a decision memo — a 1-pager that outlines:

Your process
Segments considered
Scores and highlights
The recommended focus segment
Next steps

It brings alignment, shows your work, and gets everyone rowing in the same direction.

Template: decision memo

Defining and Aligning Around Your ICP

🎉 Congrats, you picked your ICP. Now it’s (finally) time to name and share your ICP.

Just picking an ICP isn’t enough — your entire company needs to know it, understand it, and build around it.

If it just ends up sitting on a slide somewhere then you haven’t really made an impact.

When everyone is aligned around your ICP:

Marketing speaks to the right audience
Sales focuses on the right accounts, asks better questions, and closes deals faster
Product builds features that solve the right problems
Support and Success deliver better onboarding and retention
Leadership makes strategic bets that actually align with customer needs

How to roll it out:

1. Present it to every department

Host intentional sessions where you explain the why and the impact:

Why this segment is the focus
What problems they’re facing
What they value
How we’re adjusting strategy to serve them

Pro Tip: Tailor the delivery for each team. Sales wants to know how this affects their talk tracks. Product wants to understand what’s in and out of scope. Marketing wants to sharpen their narrative.

2. Talk to real ICP customers

The best messaging starts here. Sit down with customers who match your ICP and ask:

What questions did you have during evaluation?
What content helped you most?
What was confusing or missing?
What almost stopped you from buying?
Where do you go for info like this?

Use their words to shape your content strategy, improve clarity, and fill gaps in your messaging.

3. Create the resources

Make sure everyone has what they need with tools like:

ICP Canvas (visual summary of traits, triggers, needs)
Persona docs (objections, buying process)
Messaging frameworks tied to the ICP
Example call recordings that show what great ICP-aligned conversations sound like

4. Update existing sources of truth

Audit what exists. Update what matters most. Archive what doesn’t. Core docs like:

Messaging + positioning frameworks
Campaign briefs
Sales collateral
Enablement content
Website

Pro Tip: ask yourself: “Does this sound like it was written for our ICP?”

It’s your job to tighten the message and make your ICP feel like:

“Wow. This company gets me.”

5. Make it part of onboarding

Every new hire in any department should be introduced to your ICP within their first week. Host a regular live session or record a video that gets reused during onboarding to go over everything mentioned in this playbook and share the resources they need to get up to speed.

6. Make it visible and repeat it constantly

Like most important things, you need to repeat it often. Share your canvas often and reference it whenever you can. Make “target audience” an important part of every campaign.

Linking it in every campaign kickoff
Referencing it in retros
Including it in quarterly reviews
Asking “Is this for our ICP?” in every planning meeting

Templates to help you roll this out:

ICP Canvas
Persona Template
Messaging & Positioning Doc
Team Enablement Deck

The Power of the Anti-ICP

If your ICP is who you’re for, your Anti-ICP is who you’re absolutely not for.

These are the companies, buyers, or situations that should raise red flags. They are going to drain your resources, churn fast, or create a terrible fit for your product and your team.

These become easy exclusion criteria that your sales team can use to disqualify prospects, but you can also use in your marketing to let prospects disqualify themselves.

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Your Anti-ICP helps you:

Protect your sales team’s time

They’ll spend less time chasing deals that were never a fit in the first place.

Attract better-fit buyers

When you’re transparent about who your product isn’t for, the right customers feel even more confident buying.

Create internal clarity

It’s easier to say “no” to certain leads, opportunities, or channel strategies when everyone knows who not to chase.

What goes into an Anti-ICP?

Here are some examples that could show up in an Anti-ICP profile:

Company size that’s too small or too large
Tech stack misalignment
A need for heavy customization or services
A culture that expects white-glove treatment when you’re built for self-serve
Highly regulated industries you’re not equipped to support
No clear job-to-be-done that your product solves

Sales can use these traits to disqualify deals early, and marketing can use them in content to let the wrong prospects opt out.

Here’s one of the best examples out there:

👉 Posthog’s “You’ll hate Posthog if...” page

Conclusion

Choosing your ICP isn’t just a strategy exercise, it can be a company-defining move and position you as a highly strategic partner.

When done right it brings focus to your marketing.

Clarity to your messaging.
Direction to your content roadmap.
And momentum to your GTM approach.

So if you’ve made it this far, here’s what to do next:

Define your market (TAM/SAM)
Map and assess your potential segments
Score and select your first strategic focus
Roll out your ICP across every team
Refine your messaging and content to speak directly to that customer

This playbook gives you the structure. Good luck!