Small Business Marketing: Understanding Your Market And Customers

Patrick DugganMarketing 101, Small Business Resources

Internet Marketing: Photo By Ivan Walsh
[This is a continuation of our Marketing 101 series]


Let’s start with the basics. Every marketing program contains four components:

  1. Your Product Or Service: This includes everything from your unique product, to the line of products you sell, to the services you offer.
  2. Promotion: Keep in mind that promotions aren’t limited to advertising. They include direct customer interactions too. Honest and friendly salesmanship is essential for a small business like yours, especially if you don’t have a big marketing budget. It can make or break a customer’s experience, and turn a potential evangelist into a fired-up Yelp critic.
  3. Price: Higher prices often mean lower volume. However, what’s unique about small businesses is that they can often leverage higher prices because of their craft offering or local services, or because their core customers are willing to pay more for a better product.
  4. Distribution: Working through an established distributor is generally easiest for small manufacturers, but make sure you consider responsiveness along with costs.

Marketing Starts With You

For your small business to be successful, you need to understand who your customers are, who your competitors are, and where your products or services fit in to that landscape. When most people think of market research, their mind immediately goes to expensive studies, focus groups, and consultants. While that’s a facet of market research, what we’re talking about is a set of simple tools that anyone can use.

Understand Your Market

Here’s a few simple things you can do, in your (admittedly limited) spare time, to get a quick understanding of where your market is:

  • Use the Internet. Start by doing a quick Google search of the service you offer, the kinds of products you sell, and also the brand names of some of your competitors. You can get a quick idea of how they position themselves to people. Low cost? Better quality? Free estimates? It’s important to go that step beyond just product and price comparisons.
  • Go out into the world. I used to do marketing for a company that sold home goods under a number of brand names, to a number of different stores. On my days off, if I was passing a store that we sold our products to — or wanted to sell our products in — I’d pop inside to see how items like the ones we made were sold. I’d see what our competitors packaging looked like, how they priced it, and what selling points they highlighted.
  • Check out industry publications or websites. Most products or services have a website or magazine supporting them, and most chambers of commerce or local merchant groups also have newsletters and resource pages. These can provide useful insights into problems (and solutions) going on in your industry, or in your community. It can also help you stay on trend! Bonus points for reaching out to inqure about how to get your offering displayed on their pages.

Understand Your Customer 

This seems obvious, but it’s not effortless. Simply from operating your business, you tend to think you know your customers. After all, you see them every day. They live in your city. They shop on your website. But good marketing means questioning your assumptions. And knowing your customer better will give you a way to better focus your marketing efforts, and the messages you use.

Here’s a great exercise: it’s called a persona. You can read a longer explanation of what a persona is here, but the gist involves really narrowing down the understanding of your customer to a specific person, with specific problems they need solved. The framework involves imaging their name and their life, and then figuring out how your product or service pertains to their needs.

  • Name
  • Age
  • Gender
  • Salary
  • Location
  • Education
  • Family
  • Job Title
  • Where She Works
  • Role in Purchasing (for herself, as a gift, etc)
  • Her Goals and Challenges
  • Her Values and Fears
  • Her Pet Peeves
  • Where Does She Get Her Information?

Knowing all of this, what’s your message to her? Craft a 30 second elevator pitch about why your product or service has value to her.

Doing a persona exercise is a fun way to keep your perspective fresh, and often best to do with other people. You can even make it a team building exercise. Try developing two or three, and then use those personas as guideposts for the people your company is talking to in its communications.

Understand Your Competitor

You might say to yourself, I know my competitor. It’s X. But competition among your market isn’t always one to one. For example, two coffee shops sitting right next to each other might not be competitors at all, if one’s primary customer base are folks stopping in for a quick cup on the way to work, and the others’ primary customers are people who sit and work on their laptops for two or three hours at a time.

Once you have an idea of who your competitors are, it can help to draw up a positioning statement for your company or your product. This is a simple exercise to see how you distinguish yourself from your competition, while also giving you a simple message to base your communications around. It’s basically marketing’s version of Ad Libs:

To: (target persona)

(product name) is the one

(category) that

(key benefit to your customer) unlike

(your nearest competitor).

Let’s use the coffee shop example again. After filling this out, you might a positioning statement that reads, “To: (target persona), Patrick’s Café is the one coffee house in San Francisco that offers farm-to-table fruit tarts fresh every morning, unlike Competitor’s Café who gets theirs frozen.”

Need some help with next steps? The SBA has a great primer on simple market research skills for small business owners: And check out their new online tool called SizeUp — the SBA began offering entrepreneurs free access to it in September. Through SizeUp you can get some key basic data, like what your competitors pay for health insurance annually, or if a community two towns over spent twice as much on barbers and beauty shops than people in your community.



Stay tuned for more marketing advice as the series develops. Is there a specific topic you’d like to see us cover? Let us know in the comments! And if you’re interested in being matched with a marketing advisor that can provide customized guidance to help grow your small business, check out our advising program at