What Is a Unique Selling Proposition and Why Do You Need One?
A unique selling proposition (USP) is a statement that explains how your business is different from everyone else in the market. It tells your customers how you can better meet their needs and what makes you special. Your USP essentially tells them why they should buy from you instead of from your competitors. It takes some creativity to come up with a compelling USP, but it’s the biggest decision you’ll ever make for your business. In essence, it defines why you are the Obvious Choice!
Why You Need A USP
The simple reason that you need a USP is that, no matter what product you’re selling to which market, there are other companies you’re competing with, and you need to stand out. You want your market to think of YOU when they need your products or services. If you create a good USP, it will stick in their memory and put you above the rest.
The Elements of a Good USP
There are three things that make a good USP:
- It specifically addresses the needs of your market. It should be something they can’t live without, that solves their problems, or makes their lives easier.
- A good USP is memorable. It has to stick in people’s minds so that you’re the one they think of when they need your products.
- It connects with your buyers emotionally. Good USPs speak to the fears, worries, desires, and frustrations of your target market. Remember that people make decisions logically but buy based on emotion!
A good USP is especially essential in a crowded market. If you’re up against a large number of competitors, you need an especially strong USP to cut through the noise. On the other hand, even if your business is the only game in town, you still need to create a USP that speaks to your audience. It’s not only about battling the competition, but also establishing your brand in the minds of your customers.
Failing to Plan is Planning to Fail
Amazingly, a majority of those who start their own businesses fail to create a unique selling proposition. Of those who don’t, almost 100% fail. However, creating a USP that suits your business and speaks to your audience doesn’t automatically guarantee success. Your products or services need to deliver on the promise that your USP is making. Otherwise, it won’t get you very far.
The Creative Process
Your unique selling proposition won’t appear out of thin air. Since this is such an important decision, it’s a process that takes some time. However, it’s not difficult to come up with the right message if you follow certain steps. Pay attention to your market, check out your competitors, and analyze your products to find their unique selling point. If you put in the time and refine as necessary, you can create the right USP for your business. Many business owners find that they are just too close to the business to think objectively. The success that can be achieved by working with a Business Coach is powerful.
Step 1: Understand Your Target Market
In order to create a winning USP, you need to understand the people in your target market at an individual level. This means not as a mass of demographic statistics, but as actual human beings. Your USP needs to appeal to their needs and desires, as well as their frustrations, worries, problems, and pain points. When you connect in this way, you create an emotional bond. The first step is getting to know these individuals. What “keeps them up at night”? What is something that would solve a specific problem to make their life dramatically easier?
Study Demographics
Start by looking at demographics. Find out your target customers’ age, gender, occupation, education level, and income. Try to be as specific as possible. Although you may have a good idea about your target market’s demographics, don’t leave it up to guesswork. When creating a demographic profile, rely on hard data wherever possible. You can go to your local library to get access to very powerful computer programs that can shine light on your target audience and demographics.
But wait! You may be thinking that this is the section on Competitive Advantage and what makes your business stand out from the competition. Why are we jumping into demographics? It’s like Steven Covey said in his book 7 Habits of Highly Effective People: “Begin with the end in mind”! You must understand your target audience so that you can effectively communicate your competitive advantage.
Observe Your Market
Gather data about your market both online and offline. Online, you can use social media sites, forums, reviews and blogs. Find out where your customers hang out online and spend time there. Locate them on Linkedin to see what groups they are in, then join too! Offline data gathering methods include surveys and focus groups.
In addition to looking for demographic information, also look for psychological data. How do people in your market feel about themselves and the products they buy? Try to understand what makes them tick.
Engage Your Market in Conversation
Get into conversations with your target market to learn more about them. A common offline market research method is to conduct surveys. Surveys work well but they’re one-sided. A better approach is to get a dialogue going. You can do this through social media sites like Facebook, online forums, or your blog. Engage people in conversation related to your product or just come right out and ask them how they feel about it.
Take Good Notes
When conducting market research, it’s important to take good notes. Record all of the data you gather and organize it so that it’s easy to analyze. Separate data into categories, such as demographics and psychology. Look for data that’s consistent from one person to another.
Try to find ways to quantify your results. When it comes to market research, objective data is the most important. Subjective data, such as someone’s feelings about your product, should be used to support the objective data.
Draw a Picture
Take all of the consistent trends you find and create a picture of your ideal customer. Identify their demographic information, their opinions, their buying habits, and all the other data you’ve gathered. Once you’ve done this, it’s much easier to create a unique selling proposition. You now have a good idea of what your customers want and need in the products they buy. You can write your USP so that it speaks directly to those wants and needs.
You can even look at the physical picture you’ve drawn as you’re doing your writing, so that it sounds as realistic and personal as possible. You can even name your “persona” so that while you are working on marketing campaigns you can make sure you are connecting directly with “Emma” (or whatever name you chose!)
An Edge on the Competition
Armed with all of this information about your target market, you’ll have an edge over the competition. It’ll be easy to see what mistakes they are making and how they are not delivering. You and your company can then fill in the gaps and give your market exactly what they want.
Step 2: Spying on Your Competitors
One of the key elements of a good USP is that it’s unique. It offers something nobody else in the marketplace is offering. In order to come up with something unique, you need to know exactly what your competitors are offering so that you can offer something that’s more attractive or valuable for your target market. Study your competitors’ products and strategies so that you can create something that really stands out.
Research Products
Spend time researching your competitors’ products. If possible, buy them and use them yourself. In particular, look at how they meet (or don’t meet) the needs of your customers. Stay up-to-date on each new product line your competitor introduces. It also helps to understand how your market feels about your competitors’ products, so keep your eyes and ears out for any mentions of them.
Study Their Marketing
Gather your competitors’ marketing materials and study them. Look at which benefits they are emphasizing to their customers. Make sure you pay attention to the specific language and communication methods your competitors use to relate to their customers. Is it more casual or more formal? Do they focus more on visuals or audio materials?
Take a look at the channels your competitors use for marketing also, since that’s where your customers are. What different marketing methods are your competitors using in each channel? You’re going to try to do something different with your message, so you need to have a very clear understanding of what your competitors are already saying. The last thing you want to be is a copycat.
And don’t forget to look at the keywords your competitors are targeting since that will show you exactly which search terms you might have to compete for, or which ones you want to avoid.
Understand the Relationship with Their Customers
Find out what your competitors’ customers think about them. Look at websites that have customer reviews of their products. Search for the company’s name on related forums. You can often turn up information by simply searching your competitor’s name in Google along with related terms like ‘great deal’ or ‘terrible.’ Especially when customers are dissatisfied, you can discover areas where you can excel.
Customer Service Considerations
Even if you offer similar products in a similar way, customer service is one area in which it’s easy to excel over the competition. When researching your competitors, pay attention to how they treat their customers and how their customers feel about it. If you have better customer service, this is an incredible edge.
Your Competitors’ Report Card
After you’ve gathered all of your information and checked out your competitors everywhere possible, add up all the data. Create a ‘report card’ for your competitor that shows where they excel and where they fall short. Take a look at your strengths and weaknesses and compare.
Your company’s natural strengths – the areas where you excel without necessarily trying – offer the best starting point for creating your USP. For example, if you’re naturally faster at what you do than the competition, this is a good point to emphasize.
Online Tools
This type of competitive research used to be time consuming and expensive, but now it’s incredibly fast and easy, because most of it can be done through the Internet. Find your competition everywhere you can online and follow everything they do. You don’t need to pay money to conduct surveys or focus groups. With social media and online forums, you can simply find your competitors and be a fly on the wall. You can sit back and observe, and the market will tell you everything you need to know.
Step 3: Create a Product That Blows Away the Competition
A unique selling proposition is only going to get you so far if you don’t have a great product behind it. Your product needs to live up to the promise of your USP, surpassing other products on the market and providing the customer with unique benefits.
Review Your Research
By this time, you’ve researched your market and your competitors, and you should have a stack of data. It’s time to analyze this data to discover exactly what your customers want and how your competition is meeting their needs.
Make a chart and do a side-by-side comparison of your products with those of the competition. You should also examine your sales data and customer feedback.
When looking at this data, there are a few important questions to ask yourself:
- Do your current products and services uniquely address your customers’ needs?
- What exactly is unique about your products and sets them apart from other products available to your customers?
- Where do your products and services fall short? Wherever there’s a weakness, this is an area you can focus your energies on improving.
- How can you offer a solution to your customers that your competition isn’t offering?
New and Improved
At this point, you’ll need to ask yourself whether you can make improvements in your product or whether you need to develop something entirely new. Your analysis of your products’ weaknesses along with customer feedback and sales figures will help you decide this. Sometimes, your current products can simply be repackaged and sold with the new USP.
If you need to develop something new, you can use your old product’s weak points as the basis of the new product’s USP. For example, you have a software program that a number of your customers complain is complex and counter-intuitive. After you rebuild the program so that it’s more user friendly, create a USP that says something along the lines of, ‘You don’t have to pull out your hair figuring it out.’
Laser-Target Your Market
One good way to differentiate your business is to choose a more specific sub-set of the market. Take a certain demographic of your market and laser-target it.
For example, if your products appeal to an age group that stretches from “twenty-somethings” to over fifty, focus on one small part of that spectrum, such as customers in their early twenties. You can focus on a demographic subset based on anything – geographical location, language, economic status, occupation, family structure, etc.
Get Ideas from Established Brands
Another simple bit of research that can help you generate ideas is to look at other brands and their products and figure out what makes them unique. Pay attention to how they tailor their message to their target market.
Step 4: Create Your Unique Selling Proposition
You now have all the knowledge you need. It’s time to put it all together and create a unique selling proposition that tells your laser-targeted market why they should buy from you.
In order to do this, here are a few questions to get your creative process started:
- Whose needs am I addressing? (Look at your target market’s demographic information)
- What do I offer that no one else can?
- Why should people buy from me and not another company? (Note: this doesn’t have to be based on your products. It could be your unique understanding of your customers, your delivery method, or extra services you offer)
Writing Your USP
The process of creating a USP involves brainstorming and refining. When brainstorming, get down as many ideas as possible and don’t worry about which ones are good and which ones aren’t. The goal is to come up with quantity. Later you’ll narrow it down, and the more you have to consider, the better.
Tips for Writing Your USP
Keep It Short but Compelling. Your USP should be something your customers will ‘get’ immediately. After you’ve narrowed down your list, take each idea and see if you can trim it without losing the meaning or impact.
Talk to Your Market. In previous steps, you detailed the characteristics of the ideal customer who represents your target market. Run each of your ideas by that fictitious person. You may even put a physical picture of the person on the wall and speak out loud. Read your USP ideas and ask yourself whether they sound compelling enough.
Test It. Test your USP on real people in your market and get feedback from them. Offer a small incentive like a freebie or discount for participating. Use their feedback to make tweaks.
Why Be the Best?
One of the best USP strategies is to forget about telling your customers that you’re the best. They’ll find that out on their own. Create a USP that says, ‘We may not be the best, but we’re the only ones who…’ That tells your target market the unique benefit they’ll get using your company.