Your competitors usually offer, essentially, the same goods and services as your own.

Example:

Consider retail grocery shops where every shop offers, by and large, the same product line.  To stand out from the crowd, the shop needs to differentiate themselves in the minds of the consumers. This is to bring buyers to their grocery store.

"Unique Selling Proposition" (USP) is the business term used for differentiating yourself from your competitors. If your business falls into this category, you need to think long and hard about your USP as part of your strategy. Yellow Belt.

Potential customers are faced with several competitive choices. 

With the rapid growth of internet marketing and sales, your competitors are no longer just shop fronts in the same main street.  They can be anywhere in the world.  Bear witness to the impact that businesses like Amazon have had on main street retailers.  Some consumers are willing to buy online and wait for delivery by post instead of going down to their main street shopping precinct and buying there.

One would ask 'why is this so?'.

Amazon (in this example) has managed to differentiate itself in the minds of the consumer.  This is to such an extent that the consumer prefers to buy from a distant supplier rather than a local one.

There can be a whole host of reasons for this including:

  • More competitive pricing.
  • Larger product range.
  • Better returns policy.
  • Availability of reviews about the product or service.
  • and so on....

Is your business one that has competitors, either nearby or around the globe?

You need to give active consideration to your points of differentiation.  These will make you attractive in the minds of your potential customers.

The generic management term for this is Unique Selling Proposition (USP).

The Peril of Being All Things To All Customers

You may resist trying to develop a USP for several reasons.

Typical resistances include:

  • It seems like a very sales-cheesy thing to have.  You may be uncomfortable beating yourself on the chest as the "best" architect around.
  • You may think that using various formalised marketing strategies is a little crass.  Many of them are so obvious in your mind that you don't want to join that group.
  • You may be thinking, "if potential customers really like me, they will find me".
  • Narrowing down what goods and services you offer may give you a dose of FOMO (Fear of Missing Out).  You worry about not getting customers now or in the future.  Once you outgrow the demand for whatever is in your USP, how will you get additional customers that lie outside the ambient claim of your USP?
  • You would like to be able to help anybody so you don't want to narrow down your target clientele.
  • It seems impossible for you to narrow down what you offer to just one thing.  If you are the equivalent of a department store, either in the street or online, you sell potentially thousands of items.  It seems difficult to narrow it down to a comparative few.

While these are quite legitimate concerns, in reality, they are just things to keep in mind as you develop the USP for your business.

If, at the end of this exercise, you still feel that you haven't satisfied your concerns expressed in the dot points above, then by all means don't use a USP.

USP in Relation to Other Business Identity Techniques

Your potential customers:

  • Other marketing related techniques are available for you to build your image in their mind.
  • Give them a reason to deal with you, let them know what your business means to them.
  • Why choose you, rather than your competitors, who are offering the same product/service?

Until you differentiate yourself in their mind, you are just one of a maze of alternative providers.  Customers are understandably confused when faced with a huge range of choice.  You can almost hear the sigh of relief when they find a business that articulates what it is that they have to offer and why that should resonate with them.

Is a USP a Brand?

A brand gives your actual and potential clients a "hook" which they can use to remember that you exist.  Amazon is a brand, but in its own right it doesn't tell customers anything about what Amazon does.

The services offered by your brand can be elaborated upon by the careful use of a "tag line".
A book written about Amazon, in 2013, introduced a de-facto tagline for them.  It referred to "the everything store" in its title.  "The everything store" encapsulates what the Amazon brand stands for; it sells everything.

Your business will need a brand to have a mental "hook" that potential customers will be able to hang onto.

Other articles in Profit Savvy cover the development of the ideal brand and its associated tag line.

Further reading on this topic at the article: Brand Development

USP and Positioning

Positioning is also a mission critical identity tool for any business.

Positioning is how you want to be perceived in the minds of your target audience.

USP and Positioning are rather similar but one might be thought of in terms of the other.

Positioning is the behind the scenes structuring of an identity for your business.  The customer is not aware of it, but it manages to convey to them "who you provide what service/product to".

USP, on the other hand, is a more obvious and overt strategy to explain what it is that you do.

While not important, you can have both a Positioning Statement and a USP.

Further reading on this topic at the article: Positioning Statement

USP and Value Proposition

A Value Proposition is a statement that clearly identifies what it is that a client can expect to receive by purchasing your product or service.

Many liken a Value Proposition to a very short sales pitch that you offer a client while going up several floors in an elevator.  This "Elevator Pitch" might only last for the 2 or 3 minutes that you have someone locked with you in the lift.  You need a very short one or two paragraph description of what it is that you do.

A Value Proposition is undoubtedly "valuable".

First:
It allows you to train your staff on what your business considers to be its principle purpose and goals in relation to the customer.  As the staff become word perfect with this "Value Proposition", they will begin to reflect it in the way they service their clients.

Second:
Is a mirror image of the first above.  A good Value Proposition means that your clients can quickly understand "What’s In It For Me" (WIIFM).  This is the most powerful marketing device known to human kind.

The faster you can provide a clear mental image to your potential clients, about what you offer and how it advantages them, the more likely you are to get them as clients.

USP and Slogans or Tag Lines

As mentioned above, a tag line is a very short, 2 or 3 word, description of the service that you offer.

Because it is very short, you will find it difficult to convey the full benefit and differentiation of your business to the customer.

As with the brand, it is also a short hand "hook" for trying to grab a piece of your very crowded customer’s mind.  When they next need your product, they are more inclined to remember you.

A tag line is often rather "clever" and uses marketing techniques to grab that hook in a customer’s mind.

On the other hand, the purpose of a USP:

  • Is to communicate a unique message.
  • In a way that resonates with your potential clients.

The differences:

The tag line is easily memorable but not necessarily fully descriptive of your service.

The USP is unlikely to be remembered word for word. The sentiment encapsulated in it will remain with the potential customer when it comes down to a choice of businesses.

USP and Mission Statements

A Mission Statement is a strategy building tool. 

It is designed to focus the mind of the reader on what it is that you are setting out to do.  Aim a Mission Statement at the internal staff of your business rather than the external potential customers.

You may not want to make your Mission Statement publicly available to your clientele.  Elements of your Mission Statement, like “maximise profitability”, won't resonate with your customers.  It may even alienate them.

Mission Statements may also be the unfortunate outcome of a committee decision making process.  There is an often quoted saying "that a camel is a horse designed by a committee".  Your Mission Statement may need to have all sorts of elements to it to placate your business’ stake holders.  For that reason, it may talk about staff, customers and stakeholders, among other things.

Your customer is not really interested in all these other parties; they want to know “What’s In It For Me” (WIIFM).

Although you may have a Mission Statement for your business, it is unlikely to be as succinct and targeted towards the customer as a USP.

There is a case for both of them and for each of them to be targeted towards their particular audience.

We have established the role of a USP in relation to the constellation of other marketing and strategic positioning tools.

Now begin to think about how to create and test the idea of a USP.

Characteristics of a Good USP

In this section, we begin to outline the process for arriving at a USP that suits your business operation.

Experts suggest that there are six design concepts to keep in mind when putting together a USP.

1. The USP must be quickly and easily understood. 
There is no point in having a USP that cannot be grasped in a matter of seconds.  That is all the attention span you have from a business customer trying to find a solution.

2. It must clearly identify the WIIFM (What's In It For Me) elements of your goods and services. 
Customers are only interested in why your business is good for them; not why it might be a nice business in general.

Further reading on this topic at the article: What's In It For Me (WIIFM)

Very often business owners like to boast about how virtuous they are in their business.  But frankly, most customers don't care about why you are proud of your business.  They want to know why they should trade with you.

It is also difficult to have enough of the potential client’s mental bandwidth to sell them a new idea. 

  • It is most effective if they already know what they are looking for and you sell to that existing desire. 
  • If a customer is looking for the ideal dog food, there is little point in trying to tell them that your cat food is the best around. 
  • They are simply not interested.

Also, it is very difficult to interest a client in something they don't see as a problem.  Although you may educate them, if they are not ready to buy, you waste your effort. 

  • If your client is in the market for a high end automobile, there is little point in having a USP explaining how good your budget range of cars is.
  • But, if your customer is buying a form of bran for better health, a USP that stresses the advantages of oat bran over wheat bran would appeal.

3. Your USP, by definition, must be different from your competitor’s.
Consider how pointless it is for you to argue that you are "the best" at something when your competitors are saying that they are "the best". 

  • Until you can find a particular something that you are "best at", and emphasise that in your USP, you are just one of a range of competing businesses. 
  • You are all making an unfocused allegation that you are "the best".

4. Being different for different's sake, may not appeal to the customer.
You may to choose to say that the colour of your widgets is better than the colour of your competitor’s widgets. 

  • If your customer doesn't really care what colour their widgets are, your USP is not appealing.

For this reason, you cannot afford to make an assumption about what elements in your USP will appeal to customers.  You have to test the various elements of your USP to determine what works in the minds of the consumer.

We discuss testing your USP later.

5. You have a very small window (2-3 seconds) to get the attention of the consumer.
Get your USP across fast enough for them to spend more time understanding your service.  This attention span is getting less and less as the overwhelming deluge of electronic media continues to grow exponentially.

Above are the design attributes in the ideal USP.

How do we go about creating it?

Creating Your USP

As we discussed above, a USP is a "tool" for rapidly, and positively, differentiating your goods and services from your competitors.  There are several different ways of achieving this.
Focusing on one, or merging more than one, may give you some insight into creating your USP.

The following takes a more detailed look at this.

Differentiating by Copying the Best

If you can find a USP that encapsulates what you would like your business to do, then consider copying the essence of it.  Make small adjustments of it for your particular case.

There is the Oscar Wilde quote that "imitation is the sincerest form of flattery".

When trying to think of modifiers, you can use the same sort of leverages and differentiators that we discuss elsewhere in this article.

These include such things as:

  • Speed of delivery.
  • Pricing.
  • Extra special appeal of what you offer.
  • Convenience like ordering and delivery.
  • Risk reduction strategies like no question return policies.

When you found the attractive USP, did thoughts of its limitations, compared to your business, jump into your mind?

That is the thing to test as your modifier.

Differentiate by Buyer

The choices you have, when developing a USP that is oriented towards buyers, are almost endless.

They include such things as:

  • Age.
  • Gender.
  • Nationality or Race.
  • Sophisticated and unsophisticated.
  • Wealthy and Budget markets.
  • Convenience over Price.
  • Marital status and families with children or not.
  • Fashion versus comfort.
  • Income bracket.
  • Educational aspirations; wealthy private schools versus affordable state schools.
  • Boasting appeal. Will obtaining this good or service enable you to brag to your peers.
  • And so on...

It is up to you to decide which of these buyer profiles are relevant.  The lesson here is that you need to be very confident in your mind who your target audience is.

Having decided that audience, you can test the appeal of your USP before going "live".  This will ensure that it works for the customers; not just appeals to you.

A potential difficulty with a buyer oriented USP is when you want to appeal to more than one buyer profile.

Example:

  • Trying to appeal to both high end wealthy clients and lower end less wealthy clients

Your product/service is not particularly buyer oriented.  You need to build your USP around one of the other methodologies discussed in this section.

Differentiate Your Business by the Solutions You Offer

The solution that you offer might include things like:

  • Fast delivery.
  • Quality.
  • Product range.
  • Your target buyer makes you unique.
  • What you sell makes you unique.
  • You have an unusual angle that makes you unique.
  • You are unique because of the things you don't (bold word) do.
  • You are unique because of the time frame around your offer.
  • You are unique because of how you guarantee your product.
  • And so on...

Be sure that the solution you are offering in your USP does differentiate itself in the customer’s mind.

Example:

  • Every customer has a reasonable assumption that having purchased the product you will deliver it.
  • Saying that you deliver on time is not so much a USP as a "given" in the market.
  • For the same reason, discussions about emphasis on quality is not likely to differentiate very much in the minds of the customer.

You also want to be sure to claim a solution that is important in the mind of your customers.

Steps:

Be active when listening to your customers or potential customers.  See what appeals to them.
Build a USP around the most appealing solutions.

One smart way of achieving this is to replicate a search in google that your customers might do.

Example:

They might be searching for a Real Estate Agent for a property transaction that they want to undertake.

  • You want to find out what people like in a Real Estate Agent.
  • A cunning way is to find out what they don't like.
  • Make sure that your USP reinforces that you provide a good service in all the areas where others are poor.

To do this, search for negative claims against, in this case, Real Estate Agents.

Things like:

  • "What I hate about Real Estate Agents".
  • "Main problems with Real Estate Agents to watch for".
  • "Ten things to be aware of with a Real Estate Agent".
  • "Why Real Estate Agents suck".
  • And so on...

Market research like this is far faster, and in many ways less biased, than asking friends and family.  They are likely to be biased and polite given you are a Real Estate Agent!

You have found solutions by either identifying the positive or negative things customers feel about a product. 

Now address them in your USP.

Your USP will appeal to customers on the basis of the solution to their problems that you offer.

"Bragging" Rights as Your USP

Nobody likes someone who boasts about the quality of their service.  This is particularly so if the boasting is unsubstantiated.

Think for a moment how much credence you give to someone who says they are "the best" Real Estate Agent in town.  It has no impact on you at all.

Alternatively, quote independent authorities for your assertion that your service is good.  This has much more appeal.

One of the best forms of marketing around are referrals of new customers by previous, existing and satisfied customers

This is because they have the imprimatur of approval from an independent party whom the new client trusts.  They are an exceptionally powerful marketing tool.

You may be able to achieve something similar if you have:

  • Client testimonials that you can point to with a phrase - "as attested by our satisfied customers".
    Point this to a testimonial page on your website.
  • Independent awards that you or your business have received.
    • For example:
      Best Business.
      Fast Growing Business.
      Other awards given by demonstrably independent organisations.
  • Referrals from "Influencers" in the market.
    One of the most influential "influencers" of all time is Oprah Winfrey.  Just saying as "seen on Oprah" is almost certain to focus customer attention on your business.
    There are a large number of other such "influencers" in the YouTube and Social Media space.
    Depending on the nature of your business, your target clientele might have other respected "influencers".
    If you are in the restaurant trade, comments by an independent reviewer will be powerful.

Testing Your USP

Simply coming up with a USP that appeals to you means that you can be confident that it appeals to an audience of one. That is you!

A sensible business manager will want to test the wider appeal of one or more proposed USP's.

Aim to come up with the one that works best.

Cheap and Convenient use of Adwords

In a different age you would have used "Focus Groups".  These were small groups of people given alternatives and asked to rank their appeal.

In their day they were the only option available.  This is despite the fact they were notoriously poor and easily guided in the results they gave.

The classic example of the weaknesses of this approach is how often election polls mis-predict the winner of an election.  One would think that if anyone new how to test the USP of a political party, opinion polls would. And yet they are often dramatically wrong.

Today, we have a much more universally reliable opportunity available to us in the form of paid "Traffic" by use of Google AdWords.  Or the equivalent in Facebook, Instagram and other social media platforms.

Using AdWords Copy to Test Your Proposition

When designing your paid advertising, your headline will be whatever you consider to be the most compelling part of your USP.

The rest of the copy and URL tags will expand on this concept that you are testing.

Let us look at some examples:

You are targeting a particular client demographic with a particular product. Your ad headline would contain those 2 items; the demographic and the offer.

Examples:

  • You specialise in Ocean Cruises for senior citizens.
    Your headline would be "Ocean Cruises for Senior Citizens", very explicit.  The supporting text would explain why that is.
  • You are selling solutions, you want to test that the solution is appealing to your target group.
    • Example:
      You are selling after school tutoring sessions for school age children.  Your ad would be "Improve School Grades With After School Tutoring".  The rest of the ad would describe the benefits of your after school tutoring.
  • You have chosen a unique or unusual angle for what you are offering, you can promote that.
    • Example:
      You are selling half price, off-season, holiday accommodation.  You would have an ad headline that reads "Half Price Off Season Holiday Accommodation".  This tests whether people are interested in that.
  • You are testing the power of reducing the fear of your service not working for a customer.
    • Test that in your heading with the example:
      You think people will not like shoes that they buy online when they arrive.  Offer a 100% guaranteed free return, as Zappo famously did.  This will allow you to test if people respond well to that.
  • The example given in the last dot point also works well when you are offering some form of guarantee, such as lowest price or no risk.
  • Your USP says what you are NOT, thereby offering a service.
    • Example:
      Say something along the lines that "Sky-diving is not for the faint of heart".  Almost by definition, anyone who does click on that advertisement is identifying themselves as "Not faint of heart".  They are therefore a candidate.
    • Stressing a negative can help you with your USP.

Always be Testing

In turn, the best way of doing this is through a program of A/B Testing. 

Further reading on this topic at the article: A/B Testing

This technique provides 2 or more options.  It tests the appeal of each by a positive action taken by the people seeing the paid advertising.

If more people click on USP A, and go to the website discussing the USP, than click on USP B, one can assume that A is a better USP than B.

Test this assumption even more rigorously with the statistical techniques of "Significance".

You can test if USP A is significantly better than USP B.

With several USP's, drop out the weakest and keep the strongest.  You can also tweak the other USP's that are not performing well to see if they can move to the best performing.

When you do have a clear cut, statistically "Significantly" USP, you can be confident that it is customer-friendly.

An interesting by-product of this is to see how many people are attracted to your USP. 

  • This process may have identified the best USP from the options you gave it, but you might find that the click through traffic is poor.
  • This indicates that in fact your business proposition is not sound.
  • This may trigger you to re-think the goods or services that you offer. 
  • Especially if your potential clientele is too small to achieve the growth or profit goals that you have.

When testing these USP's, you need a purpose built single page on your website. This is your "Landing Page".

This page is rich in the terms that you have used in the USP advertisement.  Rich in both its Title Tag and Meta Tags.

Further reading on this topic at the article: Website Design

These Landing Pages should be in the menu structure of your website.
Place them at the bottom of the page where the search engine crawling will find them.  Customers may not bother to go there, lessening confusion.

How long do you test for?

  • The first round of A/B Testing is likely to quickly demonstrate the weakest of your alternative USP's. 
  • Having narrowed the range down, you may want to allow the test ads to run for a reasonable amount of time.
  • This will avoid any seasonal difference.

As an obvious case:

  • If you had a USP that said "Always deliver in time for Christmas".  That would score very well in the Christmas season but not in February.
  • It is a good idea to try to remove seasonality, where possible.  With such things as holiday traffic it is impossible to remove seasonality altogether.

It is up to you to decide how long you run the advertisements. 

  • Best practice suggests that you can drop the weak options in as little as 30 days. 
  • When deciding your best option, you may want to run for around 90 days.

What To A/B Test

Above, we indicated there are a number of different criteria that you can use to differentiate yourself in the mind of the customer.

You may be immediately tempted to go with the one that works best for you (say lowest price).
But, you may be failing to find that there is even a more powerful one that you didn't bother to test.

Therefore, divide testing into 2 major steps:

1. Attempt to find candidate USP's in more than one of the several criteria given above.

2. For each of the different types of differentiation, you should have at least 2 advertisements.

  • This helps to ensure that it is not a poor advertisement that causes, what might have otherwise been your best USP, not to be chosen very often with your paid ad traffic.
  • Having at least 2 advertisements for each differentiation, may mean around 6 to 12 different paid advertisements running at the outset of the test cycle. 
    • You will be confident that you have bracketed the possible differentiators and given them a fair chance to stand out in your testing.
  • The poor differentiators will show up quite quickly.  None of their several advertisements will work.
  • Some advertisements for some differentiators work well, other advertisements do not. 
    • Revisit that differentiator with new angles of attack on the advertisements.
      That way you can, over time, decide whether it is the advertisement that is weak or the differentiator.
      The last thing you want to do is remove a good differentiator from consideration simply because you couldn't think up a good advertisement at the start.
  • This sounds like identifying the best USP, by a process of testing, is a cumbersome, long and tiresome process.
    • Think of what is the cost of missing out on your ideal marketing strategy.  Particularly if it is because you couldn't be bothered to test it at the start.

Testing the Strength of Buyer Sentiment

Depending on the nature of your business, and the level of comfort you want when choosing your USP, you may want to consider the following:

  • Counting click throughs:
    • This is the number of people who have clicked on your advertisement containing the test USP.
      The number of click throughs can be impacted by various things.
      You want to know the "CTR" (Click Through Rate).  It tells you the percentage of people who have clicked on your advertisement.
  • The percentage is more important than the actual number of people, in many ways.
    • You can get more click throughs by paying for more advertising and appearing on more pages.
      Therefore, the total count may be hiding the fact that you have bought the total count by paying more money.
      You want to pay as little as possible to get clicks so that your future marketing with this USP is as cheap as possible.
  • You want to test the level of commitment and interest.
    • Having people click on your advertisement may simply indicate that they have been attracted by the phraseology in your USP.
      This is, in its own right, a good thing but what you really want is people who are committed to buy.
      You want a Lead Qualification device to be sure that they are sufficiently interested to give you, for example, their email address.
      Today, if people give you an email address, it is a powerful indication that they are attracted to what you have to offer.  Either for now or in the future.

Further reading on Lead Qualification is in the article: Sales Funnel

Wrap Up

In this article we have explored the use of a Unique Selling Proposition (USP).

  • It is a way of establishing how to differentiate your business from your competitors in the minds of your target audience.

We have discussed how to create a USP.

Then how to test candidate USP's to ensure they actually do work in the minds of the consumer.

This will help you select the best from all the various candidates.

USP example:

For Restaurant owners.

Who need high quality waiting staff.

Your business name: Hospitality HR Specialists. 

Is Australia's highest specialised hospitality recruitment service.

That provides the very best staff when you need them.

Unlike other recruitment companies, we specialise in hospitality.

Hospitality HR Specialists is the top performing hospitality recruitment service in Australia.

Resources

As with many marketing concepts, there are many articles and books on the topic.

After many years of experience, we have found one of the best ways to identify a book on USP, worth reading, is going to the Amazon Book Store.
Shortlist by searching USP.  Then look for books that have a large number of positive review scores.

There are a large number of YouTube videos on the topic.
Check the "like this" percentage score for the video as an indicator. Choose video's with a decent number of people looking at them.
Work out the score by dividing the total number of "likes" by the number of people who have viewed the video.  The larger the percentage of "likes" the more likely the video is to be useful.

Read more about Statistical Significance at Wikipedia. 

You are not allowed to view comments

Leave your comments

  1. Posting comment as a guest.
Rate this post:
0 Characters
Attachments (0 / 3)
Share Your Location
Type the text presented in the image below