Why Saying “No” Can Unlock Growth: Aligning Around Your Ideal Customer Profile

In SaaS, growth isn’t just about acquiring more customers—it’s about acquiring the right customers. Lincoln Murphy’s recent piece, Good Fit vs. Bad Fit vs. Ideal Customers: The Key to Unlocking Sustainable Growth, makes it clear: not all customers are created equal, and chasing the wrong ones can stall your business.

The Cost of a Bad Fit

Every SaaS company has experienced it: onboarding a customer who constantly pushes for features you don’t offer, requires more support than your team can give, and eventually churns with negative feedback. These bad fit customers drain resources, frustrate teams, and damage your brand.

Murphy lays out a “Success Potential Checklist”—looking at technical, functional, competence, cultural, and resource fit—to help companies qualify customers. If they don’t pass, the best move is often to politely decline.

Good Fit vs. Ideal Fit

“Good fit” customers can succeed with your product, but they may not be your growth engine. They need support, but they’re not always your most valuable or loyal base.

The real gold lies in your Ideal Customer Profile (ICP)—the customers who stay longer, buy more, and actively advocate for your brand. Identifying and doubling down on this group is the key to sustainable growth.

Taking ICP from Concept to Culture

Murphy’s framework is powerful, but it’s only effective if your entire company embraces it. Here are four ways to make ICP more than a marketing slide:

1. Every Employee Should Know the ICP
   Your ICP isn’t just for sales or marketing—it’s for everyone. QA, development, finance, HR—every team needs to understand who your ideal customers are and why they matter.

   • Share real customer stories at company meetings.

   • Run on-site visits with a cross-section of employees to build empathy.

   • Make ICP part of onboarding for your own staff.

2. Measure Stickiness Regularly
   Don’t just track churn; track “stickiness.” Which customers keep logging in, expanding usage, or showing product-market love? Segmentation may reveal surprising ICP patterns—sometimes your best customers aren’t who you assumed.

3. Be Brave Enough to Say No
   Saying no to poor fit customers protects your product, your teams, and your brand. Prospects respect honesty more than a forced sale that leaves them frustrated.

4. Sales Culture
   A sales culture that aligns with these values—rewarding volume over fit—creates friction. Sales teams push deals at any cost, then hand messy customers to onboarding and support. Instead, align both the sales and customer success teams. Winning isn’t about closing the deal, it’s about keeping the right customer.

Why This Matters

Defining and aligning around your ICP delivers more than higher MRR. It builds:

• Lower churn: because customers succeed.

• Stronger reputation: because customers advocate.

• Efficient growth: because your resources go where they matter most.

The SaaS companies that thrive long-term aren’t the ones with the most logos on their website—they’re the ones with the right logos.

Reference : https://sixteenventures.com/bad-fit-vs-good-fit-customers