The term USP (unique selling point or unique selling proposition) isn’t unknown to you as a business. You have heard and read about it countless times. You will need to bank on it to create a place for your brand in the market. In most likelihood you aren’t running one-of-a-kind businesses that will attract customers and without requiring much of convincing. In other words, if you aren’t Elon Musk and working on SpaceX project you will need to work hard to put yourself ahead of the competition. Your target customers should perceive the value in your products and services for them to choose it over what your customers offer. When you are competing in a crowded space you need to show value in your products and services.
What is a unique selling point (USP)?
The simplest definition of USP is something that differentiates your products and services from that of your competitors. You have to differentiate yourself from others and most importantly convince the customer that you offer the best product or service they can buy. Customers have a simple question for any business – how is your product better than your competitors? You need to answer that question to survive in a competitive market. In a globalized business environment local brands are competing with global brands and vice versa for market share. Your marketing campaign has to drive the point home around your USP and communicate the benefits you have on offer for your customers.
Components of a USP
- Benefit has to be Tangible – The benefit of your product or service should either be direct or implied. For instance if you offer more memory on the phone compared to other competitors at the same price point this is a direct benefit. Implied benefit in the same case would be that more memory improves the gaming performance of your phone users.
- Benefit Has To Be Significant – The benefit you are promising the customers would need to be significant and not simply a marketing gimmick. Unless customers see significant benefit in your product it won’t differentiate you from your competitors. For instance your competition sells business class tickets for $2000 and you sell it for $1995. While this may be a benefit it isn’t significant and hence customers aren’t likely to choose you on this factor alone.
- Benefit Has To Unique – The benefit you are promising your customer has to be unique. It should be something that your competitors aren’t likely to offer. For example if your hotel is one block closer to their airport than your competitor it isn’t a unique benefit but in case it is miles nearer compared to competition you can sell your location as an USP.
Types of USP
As we have mentioned above, anything that separates a brand from its competitors and convinces potential customers to go for it is its USP. Different businesses use different ideas and creative narrative to gain an upper hand over competition. Here we look at some of the most used types of USPs in the market –
- Price – Price and promised savings to the customers can be one of the best USPs for any brand. In fact there are businesses that solely attract customers thanks to the savings they offer. This has been the success model for Wal-Mart. They don’t promise you the most exclusive products, nor do they assure the most suave shopping experience. They offer great bargains and that’s enough to pull customers.
- Location – Positioning or location can be an unbeatable USP in some businesses such as the hospitality business. If a business has the advantage of location it can avoid getting into a price war. Take for example Dubai International Hotel. It is the only hotel within Dubai International Airport one of the busiest airports in the world. No competitor can ever expect to beat that USP that this hotel has.
- Speed – 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 delivering pizzas within 30 minutes or delivering it free. While there are several other pizzerias that it competes against but along with the quality of the product speedy and timely delivery are factors that attract customers towards them.
- Experience – There are brands that don’t solely bank on their products or their services to grab a lion’s share in the market. They rely on the overall experience they offer to their customers. Take for instance Disney Parks & Resorts. While many of its competitors have better rides, better amenities and even better prices they haven’t been able to match the brand that promises to spread happiness. Beat that!
How USP is Important to Business Success?
The key to selling any product or service in the market is to define your standing against your competitors. In most cases more so in the retail business it is a rat race among brands. Unless you are able to communicate the value proposition to your target customers when compared to other brands you aren’t likely to create a brand advantage. Though you may be able to sell your products you aren’t likely create brand loyalty. USP is the key driver for any business and it can help create brands out of businesses which enjoy unquestioned loyalty and good market share.
Also Read: How Technology Has Improved Business
How to Identify Your Unique Selling Proposition
This is one of the biggest challenges for any business. Like any other business owner you’d be proud of the product or service you are offering. This pride can make you complacent and create a mirage around you. Identifying your USP is a four stage process. Let us look at these four stages
- Know your product – Can you sell the USP to yourself or your employees? It is the starting point of identifying your USP. We have already mentioned about the components of a USP and the USP you are planning to bank on must tick all the boxes before you take it to your customers.
- Wear a customer’s hat – You need to drop the hat of a business owner and wear that of a customer. What does the customer want? Does our product meet those aspirations? There are several counts that customers would judge a product on and these include quality, reliability, customer service etc. While price is definitely a USP but it should be used as a last resort as customers don’t generally choose products or services on price alone ignoring the other factors.
- Know what drives decision – It is important for you to know what motivates your customers’ final buying decision. Do they discuss it in their peer groups? Are the visuals and tag lines used in campaign a motivating factor? You need to establish your USP in a way which can drive customers towards final decision.
- Find USP from Customers – While this isn’t for businesses that are starting out but large brands need to ask customers for honest opinions. There are times when motivation for customers is different from what you perceive and market as your USP. When you listen to the customers you will keep your be able to align your USP with perceived benefits on the ground.
To sum up USP is a part of your competitive advantage in the market. When you differentiate your products and services from others in the market you will be able to create a niche space for your brand. The fact is if you don’t have competitive advantage you won’t survive in a competitive market and hence you should work towards identifying your USP and presenting it in front of your target customers.