Unique selling proposition – USP
Developing an effective Unique Selling Proposition (USP) is one of the key foundations of creating a competitive and successful business. Getting your USP right from the outset can make your marketing and sales activity a lot more effective. It also makes it easier for you to communicate a consistent message in a variety of different mediums.
The Wikipedia definition of a USP is: “The proposition must be one that the competition either cannot, or does not, offer. It must be unique—either a uniqueness of the brand or a claim not otherwise made in that particular field…” for example FedEx’s proposition is “When your package absolutely, positively has to get there overnight”.
Knowing your competitors, customers and your marketplace seems like an obvious requirement. However not many small businesses really invest enough time into understanding the comparative market position of their products and services. The likely outcome of such low awareness is the development of “me too” type products and services that look alike. Therefore the business is forced to compete on price rather than perceived customer benefits.
How do you identify your USP?
Start by reviewing your businesses’ key strengths, weaknesses and overall market position. Look for all aspects of your product or service offer that makes your business unique or different. What is special about your offer and how will it benefit the customer? Ask yourself why the customer should buy from you and not your competitor.
An example of defining a Hotel’s benefits:
Location is always a big factor in market positioning in this type of business. The hotel in question has old world charm and is considered boutique accommodation. There are a small number of uniquely decorated rooms and the overall atmosphere is eclectic.
The Hotel owner looks at the business and deduces that the key benefits for the customer are:
1. Proximity to the waterfront with a picturesque outlook
2. Boutique features with a unique atmosphere – the hotel has a real personality
3. Like no other hotel – ideal for people who want to experience something different.
In the process of defining your USP you will also need to consider the wider market context within which you operate. If we take the example of running a railways business, this could be widened to the context of transport. The change in perception will fundamentally shift the way you look at what you offer the market. The U.S. rail industry failed to make this readjustment last century and suffered from a market shift that left them almost obsolete.
For example a traditional USP for a mail business is:
“Auckland Mail Services provides a fast and efficient mail delivery service. We guarantee to deliver your mail the very next day”
Let’s change the perception of the business to “facilitating the movement of information between people and businesses”, so that Auckland Mail Services is in the business of information transfer. They could use the following statement as a basis for developing their USP:
“Auckland Information Services makes the transfer of information easy. Every hour of the day your friends, family and businesses are connected together.”
The ability to future proof your USP is a definite advantage. There is however a balance between defining your market too narrowly and too broadly. You still need to be able to keep your positioning relevant to your target customer. The time you invest in this process is vital for your business as it will provide key market insights into your competitive advantages and can also provide a proof of concept for your customer offer.
To see more about developing a USP read our following article.