What is a Unique Selling Proposition (USP)?
A unique selling proposition is a feature, quality, or service you provide which is different from what your competitors offer. Let’s look at the contextual meaning of each of the three words:
- Unlike any other offering on the market. In some way, your offering must provide something that no competitors offer.
- Able to demonstrate value to the consumer. It must exhibit compelling reasons to buy. Being unique is useless if no one desires the unique aspect of your offering. Your uniqueness must appeal to your target market. Selling means that the benefits are communicated clearly enough to get a prospect's attention and convince him to trade his money for your offering.
- A proposal, suggestion, or, at best, recommendation that people buy your product. You cannot force them to make favorable decisions. They will need to voluntarily choose to make the transaction. This underscores the importance of both having a unique offer that is only available from you and communicating a strong value so that the only logical course of action is to buy.
You may have heard similar terms such as unique selling point, competitive advantage, and positioning statement. In essence these terms all refer to the same thing.
The following Domino's Pizza slogan did not only put their brand on the map, it put Domino’s all over the map! "You get fresh, hot pizza delivered to your door in 30 minutes or less—or it's free."
Was that a unique offer in the pizza market? Yes. Indeed, it was unique to the entire prepared-foods market.
Was it a selling offer? It was certainly a welcome promise to a Mom or Dad who had no energy left to make dinner. It also was great for someone short on time. And if the deliveryman was five minutes late, the customer got his pizza free. Who would mind waiting an extra five minutes for free pizza?
Did the target market respond to their proposition? Many experts believe that this USP or slogan is the primary marketing factor that grew Domino’s into a billion-dollar company.
What a USP is not!
- A USP does not claim to be the best at everything. It is only aiming to be the best in one aspect of your company’s business.
- It is not a statement encompassing a broad range of benefits. Rather, it focuses on one or two benefits.
- It is not a generality, such as “better food faster.” It is a concrete benefit stated in specific terms.
How should you go about creating a USP?
While creating a USP is commonly considered a task for the marketing department (and correctly so), this is an exercise that engages the entire company. To have a strong USP, you must develop a niche. This starts with market research to discover a need. You may also want to do a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis on your company and/or products. When you have identified a need you believe you can satisfy, then develop a solution to meet the need.
Many people stop here because they think the rest is automatic. That is not true. The hard work is about to begin — helping your target market understand how badly they need what you offer. They might not even be thinking about your product or service. Who knew they needed a cell phone in 1946 when AT&T began service in St. Louis, MO? That is precisely where your written USP comes in. Your USP clearly sells your niche customer on the great value that you are providing. Since they cannot get it anywhere else, they must buy from you!
Once you have gained enough confidence for customers to hand over their hard-earned dollars, you must fulfil your promise to them.
At that point, you are in business! But it does not stop there.
Continue the development cycle and repeat to perfection. When are you done? Never. That’s right! Never.
Why is creating a USP critical?
- It corners a section of the market place.
- It increases the ROI (return on investment) on marketing investments.
- It helps you to focus on the most important aspects of your operations.
- It helps you understand how to strengthen your position.
Developing a market-worthy USP is a foundational bedrock for business success. You may already have a strong USP and not even know what it is. You might be thinking to yourself, “My business is doing great already. Why should I worry about a USP?” That may be true. However, the danger of not defining your USP is that you will not know when your advantage is threatened. Neither will you know how to strengthen it. Changes in customer needs or preferences, changes competitors make, or even changes within your own company can increase, reduce, or completely remove your USP. If you have a strong USP, you could probably survive on a mediocre marketing approach in a down economy. But if you do not have a USP, there is no marketing approach that will deliver sustainable success.
If your business is struggling, you can keep floundering along until the collapse. Or, you can step back, do your research, and think creatively about how to develop your USP. It will be a challenging journey, but will yield tremendous reward.
If your business is doing well, but you do not know what your USP is, you can keep rolling until some change undermines your USP. By then it might be too late. Why not do your research now so that you can identify threats to your USP and make proactive changes?
If your business is doing well, and you have clearly identified your USP, congratulations! But remember, be alert for changes that could affect your position. As Dean Martin said, “Success is tentative.”