ICP is more specific than 'target market' — it includes industry, company size, role of buyer, geography, current tech stack, and behavioral signals. A B2B SaaS ICP might be: 'Indian D2C brand, 5-50 employees, ₹1-10 Cr revenue, on Shopify, no current CRM, founder-led marketing'.
ICP guides every go-to-market decision: who you advertise to, what content you write, who sales pursues, what features you prioritize. Without a sharp ICP, you waste resources on poor-fit prospects.
Most SaaS companies' ICP narrows over time as they understand which customers retain, expand, and refer.