What is an USP why should I have one?business_link

What is a USP and why should I have one?  Some businesses think that they have a USP when what they really have is a clever strap line, so what is the difference?
Okay, first of all USP stands for Unique Selling Proposition.
There is a variation called ESP (Emotional Selling Proposition) but as that is in the territory of some of the major international brands we will keep it simple and relevant for this exercise.
So what is it and how do you get it?


The key is in the word unique, which in this context is having something that is different to the competition.
That 'difference' will need to be something that is real and tangible about your product or service or both. For instance, is it better quality; more durable; faster delivery; better value; better technology; safer; wider product range?  You might try simply dropping your prices so that they are lower than the competition, but the competition could easily do that too and you will end up with a price war and diminishing profits. See defending your USP below. On the other hand your USP may be that you have developed better systems or technology and can therefore pass on some of the savings to your customers.
So having a USP is about difference; if you see yourself as fairly undifferentiated and want to reposition your business in the minds of your customers and the rest of the market, you have to start with the customer. Ask yourself, or better still ask the customers: what are they seeking in the product or service, what things do they value what difference(s) are they looking for?
Establish what it is that customers are looking for and rank them in terms of importance. Next identify what your business is able to deliver for one or more of the identified benefits (or values) in a way that will set you apart from the competition.
You may find that you are already different or easily capable of being so, therefore the challenge is about how you communicate this. On the other hand you may spot something that would give you a competitive edge, but will need action before you are able to deliver it. This requires a strategic decision, possibly investment and definitely an action plan.
Some other things to say on the subject: it almost goes without saying (from what we have already discussed) that the benefits customers will get from your USP should not only be real benefits but ones that they will value highly. Remember that typical objectives for a USP are to lock in loyal customers, to get new ones to choose you rather than the competition and to improve profitability at the same time.

Tell the world you are different.

This is what is called positioning - adjusting how your customers perceive your business and your offer in a way that makes you different and able to stand out from your competitors.
Marketing communications is a huge subject and too big to cover here. See October 2007's newsletter for an article on advertising which covers some basic rules of communication.
Suffice to say here, that you need to tell your customers what it is that is unique about your offering through whatever medium you choose to communicate with them.
Take care though: you can have a great USP and communicate it badly; you can claim to have several USPs and completely confuse your customers or as with some businesses have little or nothing that is different but use a slick message to hype up the product or service.  This latter might work in the short term but eventually people will see through the hype, or your competitors will quickly copy your communication style.

Remember why you want to be different.

What is the point of your USP; is it to:

  • Turn more of your customers into loyal ones?
  • Get new customers more easily than the competition?
  • Command a higher selling price than the rest?
  • Sell more at the same price?
  • Get customers to buy more frequently?
  • Maintain or grow the business in a shrinking market?


Whatever the reason(s) the outcome should be win-win for you and your customers. It is worth repeating that the name of the game is profit; being different can add cost to the business, which is fine if the USP affects your sales more than it does your costs, so some number-crunching is needed, in this case, to identify the amount of sales increase you require to maintain your existing profits and / or achieve your new profit target.  Remember the impact on sales will be influenced by the value that customers place on your USP.

Into battle we go!

And finally be prepared to defend your USP. Anything that is good is worth copying, your competitors will be watching, so you will find that your USP will erode over time as your competitors catch up. Therefore, you must ensure that you are prepared for this and be ahead of the game so that when your customers get to the point you are now, you have moved on and are still differentiated from the rest of the pack.

That's all for this month.

Peter Mulhall
Business Adviser
tel: 07717 290309

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