An ICP is a short, opinionated definition of the best-fit customer: usually some combination of company size or revenue, vertical, geography, and a triggering event (raised a round, hired a head of growth, moved off a competitor). It is narrower than a TAM and broader than a single persona.
For agencies, the ICP is the document that should sit behind every campaign brief, sales script, and content calendar. Without it, marketing chases everyone, sales talks to anyone, and the agency ends up reporting on traffic instead of revenue.
ICPs decay. Last year best-fit customer may no longer match where the product is heading or who is winning. Revisit it every two quarters using actual customer data — closed-won deals, retention by segment, expansion patterns — not the deck the founders wrote.