Entrepreneur.com defines Unique Selling Proposition (USP) as the factor or consideration presented by a seller as the reason that one product or service is different from and better than that of the competition. According to WhatIs.com, unique selling proposition (USP) is a factor that differentiates a product from its competitors, such as the lowest cost or the highest quality product. USP is also known as unique selling point and could be thought of as "what you have that competitors don’t."
Simply put, USP is what makes your business different from everyone else in the market. A USP is closely related to competitive advantage. A successful USP promises a clearly articulated benefit to consumers, offers them something that competitors can’t or don’t offer, and explains why they are superior to those of a competitor. A strong USP can help you attract and retain customers and reduce client churn. Communicating the USP is a key element of branding.
If a smaller business wants to steal some market share from a larger competitor, they’re better off making a stand for something (niche market) and becoming known for that thing rather than trying to do everything (broad market). If you want to stand out or have a USP, your business needs to stand for something because that’s what you’ll become known for. It’s impossible to stand for everything.
As the old adage goes, "If you try to please everybody, you'll end up pleasing no one." "When you try to reach everyone, you reach no one." Remember, when you attempt to be known for everything, you don’t become known for anything. Thus, it's advisable to narrow your target audience and be specific on what you offer.
1. Get Inside Your Customer’s Head
When you’re identifying your ideal prospect, consider the following:
√ What does your customer really want?
√ How can your product or service solve their problem(s)?
√ What factors motivate their buying decisions?
√ Why do your existing customers choose your business over your competitors?
Creating a USP begins with conducting thorough market research and analysing the opportunities that your competitors aren't currently exploiting. It then involves identifying the point of differentiation which differentiates you in the market.
Put yourself in your customer's shoes. Step back from your daily operations and carefully scrutinize what your customers really want.
You need to identify your potential customers based on their age, location, gender, earning levels and other demographic characteristics. You can then group them into different buyer personas. Try to be specific. The more you're able to define the characteristics of your target audience, the better.
Price is never the only reason people buy. If your competition is beating you on pricing because they are larger, you have to find another sales feature that addresses the customer's needs and then build your sales and promotional efforts around that feature. There are many different sales features, such as convenience, quality, friendliness, reliability, cleanliness, customer service, etc., that can influence your customers’ purchasing decisions and entice them to come back.
USPs are often grouped into the following categories: price, quality, service, speed, selection, convenience, guarantee, customization, originality, and specialization. Pick one that will be at the core of your promise and work from there.
Here are a few good USP examples:
■ We specialize in working with financial institutions. (Specialty)
■ We guarantee service in 4 hours or your money back. (Guarantee)
■ We use a unique tool called SureFire! to analyze your critical needs. (Methodology)
2. Explain How Your Business Solves Your Ideal Customers’ Problems
Once you understand what motivates your customers' behavior and buying decisions. You need to know what drives and motivates customers. Additionally, you need to identify your target audience's problem and explain how your product or service solves that problem. Find out where your strengths lie and which of these qualities would make a great selling point to attract new customers.
Go beyond the traditional customer demographics, such as age, gender, race, income and geographic location, that most businesses collect to analyze their sales trends.
Cosmetics and liquor companies are great examples of industries that know the value of psychologically oriented promotion. People buy these products based on their desires (for pretty women, luxury, glamour and so on), not on their needs.
To create a strong USP, you have to examine the profile of your prospective customer and then market your products in a way that shows them you can meet their needs and solve their problems. If your prospective customers choose your products, how will their lives be improved? What makes your business so different that prospective customers should choose your products or services? The answers to these questions should form the bedrock of your USP.
3. Make Your Business Irresistible to Your Customers
Uncover the real reasons customers buy your product instead of a competitor's. As your business grows, you'll be able to ask your best source of information: your customers. For example, the pizza entrepreneur could ask them why they like his pizza over others, plus ask them to rate the importance of the features he offers, such as taste, size, ingredients, atmosphere and service.
If your business is just starting out, you won't have a lot of customers to ask yet, so "shop" your competition instead. Many retailers routinely drop into their competitors' stores to see what and how they are selling.
Reach out to your current customers, ask them for feedback, and see what they’re saying they like about your product or service. Don’t be afraid to ask customers why they chose you over your competitors. There are several ways you can do this, whether it’s asking when you have them on the phone or sending them an email with a questionnaire about your business. You can use the insight you gain from customer feedback and package it into a powerful USP.
Keep in mind that your USP essentially implies a promise or a pledge you are making to your customers. FedEx, for example, guarantees it can get any package (from anywhere) to its destination overnight. This not only addresses customers’ specific need (reliable package delivery), but also makes them a promise – to deliver their packages with care, on time, every time.
Make a list of the ways that your product or solution is different than your competition. Once you have articulated your USP, it is important that you integrate it into your overall sales strategy. It should become the way you talk about your products when engaging with customers and should be present in all of your marketing and sales materials.
1. Time Saving
Products are manufactured and delivered in short time spans, whereas services are quickly executed. The time factor plays an essential role and is ideally suited for a unique selling proposition. This is used, for example, in fast food chains such as McDonalds or in delivery services promising express shipping.
2. Customer Service
An outstanding level of customer service. For example, you offer fast turnaround, 24/7 support, 10 minutes response on emails, return calls within 1 hour, a preliminary draft in 48 hours, proposals within the hour or unlimited revisions.
3. Environmental Compatibility
Rising ecological awareness is becoming an increasingly important factor. Sustainably-produced goods, abandonment of ingredients from questionable sources, or even environmentally-friendly technologies are nowadays ideally suited to stand out from the offers of your competitors. A good example is Toyota’s Hybrid Synergy Drive (HSD) system, which combines both a combustion engine and an electric motor, thereby reducing fuel consumption and exhaust emissions.
4. Secret Recipe
The biggest product-related secret is usually its list of ingredients. In this way, Coca Cola managed to create a successful unique selling point over the years. Its strength lies in the fact that it is not possible to copy a product. Recipe-oriented USPs can therefore work on a company-wide scale. Perhaps the best example of this are products with an assigned geographical indication, which are consequently protected by various rights, Mexico’s tequila for example.
5. Product Exclusivity
Emotional values such as exclusivity and prestige also play an important role when trying to convince potential customers to buy various products. For instance, why is it that a specific brand of engagement rings, let’s say Cartier, is so crucial to some people, when other, less common jewelers have equally beautiful and high quality jewelry? The French company used as an example here simply enjoys a better reputation among connoisseurs.
6. Price
Online shoppers often sort and browse based on product price. If you are the cheapest merchant in your product category you should communicate that USP. Zenni Optical is a website which sells ridiculously cheap glasses (as low as $6.95), which makes them special.
7. Delivery
In a competitive market speed of delivery can often be the market differentiator. Customers are impatient these days and often choose brands that’d offer them the fastest services. Take for instance, Domino’s Pizza’s commitment to deliver pizzas within 30 minutes or it's free.
Free shipping, quick delivery time, and overnight shipping are USPs which definitely resonate with online shoppers. Amazon does a great job of getting products to consumers fast. You can order something from Amazon, and have it the next day, in 2 days, or even have it delivered to a locker for pickup, or enjoy the perks of Amazon Prime. Moreover, Amazon holds its merchants accountable if products don’t arrive on time, and refund items if they don’t arrive on time.
8. Value
The USP of value is a bit flexible and really depends on your company. The key take away is why someone would want your service or product. Colgate for example, sells toothpaste which is a common product, but emphasizes oral health and education.
Volkswagon does a great job of communicating their USP right on their website homepage, with a “Why VW” tab. Volkswagon is really transparent with their USP. What makes them special? Well their values: performance, design, quality, environment and safety.
Creating a unique selling proposition has several benefits for your company since it forces you to consider what is unique about your product or service and how it addresses your customer’s needs. Ultimately, those benefits result in a clearer sales plan and increased sales as you attract the right type of customers and can meet their needs successfully.
√ Clarifying what your company stands for. Some companies have very specific USPs that define who they are. For example, TOMS Shoes donates a pair of shoes for every pair you purchase, which communicates its values as a company.
√ Creating leverage against your competition. If your USP truly represents what is unique about your company, it should be easy for your sales team to use that to your advantage since presumably none of your competitors will be able to say the same thing.
√ Eliminate customer confusion. A well-crafted USP will make it clear to a customer what you stand for and what you offer, reducing the chances that they will be confused about either one.
√ Overcoming customer objections. When a customer tells you that they have a specific concern or have been frustrated by another provider, a USP can help you move past that by showing how you and your product are different.
√ Happier customers. Because your unique selling proposition defines for a customer how you are different, it can help manage expectations and increase customer satisfaction since they have a clear understanding of what you offer and why you are unique.
1. Basecamp
Basecamp is a project management software developed by 37Signals, and it provides an excellent example of a successful USP.
According to their website, Basecamp is used by millions of people as an "online project collaboration tool" and it’s "the top choice of entrepreneurs, freelancers, small businesses, and groups inside big organizations." If you pay close attention to the second statement, you’ll notice that it doesn’t say that Basecamp is the top choice for large organizations and multi-national corporations. Instead, it talks about being the top choice for freelancers and smaller organizations. This is done on purpose.
37 Signals made the decision to create Basecamp as on online project collaboration tool for smaller organizations. They realized that if they tried to appeal to everyone, i.e. smaller organizations and multi-national corporations, then the product wouldn’t be awesome for anyone. The product would become too complicated for smaller organizations and would have the danger of being too simple for larger corporations.
Their entire philosophy is about creating software the meets very minimal requirements and not feature-rich software aimed to please everyone.
2. Zappos
Zappos has a USP that is quite simple: have the best return policy ever. A return policy that removes the fear of buying online and buying shoes that might not fit.
Zappos is known as the most convenient, customer-friendly online store for buying shoes. They’ve attained this position by offering free shipping and free return shipping. The result is that people order multiple shoes at a time and return the ones they don’t want. Sometimes this works in Zappos favor when customers keep the extra pairs, but other times it cuts into their margin and lowers profits.
Zappos isn’t known as the most convenient store for purchasing shoes and the lowest prices. It would be impossible to do both. If they offered the lowest prices, there’s no way they could offer free shipping and return shipping on multiple pairs of shoes for each customer.
Since many online stores compete on price, only offering the lowest prices wouldn’t make Zappos stand out for any reason. By offering the most customer-friendly shipping policies and being known for the best customer service in their industry, Zappos stands out from the crowd by making a stand for the best customer service and free shipping, and they’re able to sell shoes at a higher price due to the fact that they stand out from the competition.
One for one. Each pair of shoes you purchase = a pair of shoes for a child in need.
TOMS Shoes is a shoe manufacturer and its USP is that for every pair of shoes a customer purchases, the company donates a pair to a child in need. TOMS Shoes helps put shoes on needy children’s feet.
The business model worked perfectly, because the cost of the free shoe was built into the price of the one that is sold, making a seemingly charitable effort also contribute to its profitability.
TOMS stood out because they distinguished themselves as a mission-driven, ethically-minded organization. Their one-for-one model is widely copied in the retail world today, and they’ve expanded their products to include accessories, eyewear and coffee under the same USP.
4. Apple
Apple used the slogan "Beauty outside, Beast inside." for its Mac Pro campaign to differentiate its product as "beautiful" compared with any other desktop computer. Buyers of this product were willing to pay a premium price, compared with technically similar desktop computers. Apple differentiates itself with a focus on aesthetics and cutting-edge technologies.
When it absolutely, positively has to be there overnight.
FedEx no longer uses this slogan, but while it was in effect, it was a perfect example of a compelling slogan. In very few words, FedEx was able to convey the message that it guarantees that it will deliver your package on time. FedEx replaced it with the slogan “The World on Time,” which is vague and doesn't contain a USP.
6. Domino's Pizza
In the old days, it was hard for Domino’s to stand out in the highly competitive pizza marketplace. Then in 1973, Domino’s found one thing that people hated about their competitors: taking a long time to deliver pizza, at which point it’s cold and not so appealing.
You get fresh, hot pizza delivered to your door in 30 minutes or less or it's free.
This is an excellent USP because it's completely transparent and clear that the customer knows they can hold the company to its promise. Sadly, Domino's no longer offers this deal because it resulted in a number of car accidents caused by delivery drivers trying to beat their 30-minute limit.
Subway is a chain of restaurants that serves different types of subs and sandwiches. These are low fat and extremely nutritious. At Subway, you have many different kinds of sandwich fillings that you can choose from. In fact, you can get the sandwiches made to your specifications. Subway uses the USP of “Eat fresh”, “Healthier”, and “Nutritious” to give the reason for why people should buy sandwiches at Subway and separates themselves from the competition.
When you walk into a Subway you have to make 4 choices. The first choice is concerning the kind of sandwich you want. Next, you have to choose the bread you want to make your sandwich out of. You have a choice between Whole Grain, Wheat, Honey Oat and Parmesan Oregano. Most franchises have their own selections that are usually added to these 4 choices. Every loaf is freshly baked in the franchise itself. Once you have chosen your bread the meat filling is added. This filling is consistent with the type you ordered. Next you are given a choice of a number of different fresh vegetables. Last comes to the sauces. There are number of different sauces that you can choose from. You can even ask your server which are the sauces that are low in calories.
Every sandwich is rich with taste and yet low in calories. It is one of the best choices when it comes to fast food. There are people who have even taken the subway challenge and lost a lot of weight. The menu also has a nutrition chart and a calorie break-up chart so that you can make a more informed choice as to what you want to eat and how many calories you want to consume.
8. Nordstrom
Nordstrom Inc. is an American chain of luxury department stores. It began as a shoe retailer and expanded its inventory to include clothing, accessories, handbags, jewelry, cosmetics, and fragrances. Selected Nordstrom stores also include wedding and home furnishings departments. The company also has in-house cafes, restaurants and espresso bars. Nordstrom, Inc.'s common stock is publicly traded on the NYSE.
There are two USPs that separate Nordstrom from other department stores. The first USP that has given Nordstrom such a tremendous reputation is their return policy. You can return anything purchased at Nordstrom at any time, no receipt necessary, no matter how long ago you purchased an item or how worn out it is. If there is a reason why the item is unsuitable for you, Nordstrom will accept it as a return. This separates them by leaps and bounds from other rivals.
Secondly, Nordstrom is renowned for its exceptional customer service in the retail industry. Here's several favourite examples of Nordstrom's outstanding customer service:-
◼ A Norsdtrom salesperson rarely points. If you have a question about where something is located, they walk you there.
◼ Salesperson are taught to walk your bagged purchased around the counter to you instead of just handing it across the counter.
◼ Salesperson can offer to ring up your purchase without you ever having to stand in line. This particularly happens a lot in the shoe departments.
◼ Departments are generally trained to answer the phone on no more than the 2nd ring.
◼ Salespersons are well-commissioned. Happy and well paid sales people provide better customer service.
◼ One to one service. In most departments, if you indicate the desire to shop, there is a salesperson designated to help and serve you throughout the entire shopping process.
Everything you need in the bathroom from razor blades to grooming products automatically delivered to your doorstep. It doesn’t get any simpler than that.
Based in Venice, CA, the Dollar Shave Club offers a unique product through an appealing USP. The Dollar Shave Club is a subscription-based service that delivers razors and other personal grooming products to customers by mail. The products offered are customizable, as is the timing of delivery.
The mail-service shave club creates a personal experience, eliminates the need to regularly purchase grooming products at the store, and helps the customer dodge the inevitable situation of running out of a certain product when it is needed most.
10. TransferWise
TransferWise noticed the huge fees Western Union is charging and how hard it sometimes was to receive the payment from WU. It simplifies the process, making it more efficiently by not having to deal with independent shops and doing it straight through a banking system.
It helps consumers reduce costs. The first way is by redirecting the flow of money to ensure that the right currency is sent from the sender to the recipient (avoiding conversion fees). The second way involves reducing transfer fees. All TransferWise transfers are handled using the real mid-market exchange rates that banks use. However, while banks charge transfer fees for hidden services, TransferWise applies a low, nominal flat fee for small transfers.
In order to have a USP, you can’t attempt to be known for everything. You have to make a stand for something. You have to choose what your business will stand for and what you’ll be known for. By making a stand and choosing something that makes your business unique, you’ll become known for that unique quality and stand out from the crowd. You therefore need to place the USP of your products at the heart of your marketing campaign.
Edited by: 浪子
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Unique Selling Proposition (USP) - Winning the Game of Business
Reviewed by 浪子
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December 12, 2019
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Reviewed by 浪子
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December 12, 2019
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