Ideal Customer Profile is a description of the best-fit customer based on firmographics, needs, buying power, profitability, and likelihood to succeed.
It matters because strategy keeps channels from competing with each other. When this concept is clearly defined, the team can connect budget, audience, creative, offer, tracking, and reporting to revenue instead of chasing disconnected metrics.
Example
A software provider might define its best-fit customer as a business with a particular workflow, team size and implementation capacity. Those criteria help qualify opportunities without assuming every organization in the same industry has the same needs.