Unique Selling Proposition (USP) Definition:
The factor or consideration presented by a seller as the reason that one product or service is different from and better than that of the competition
Before you can begin to sell your product or service to anyoneelse, you have to sell yourself on it. This is especially importantwhen your product or service is similar to those around you. Veryfew businesses are one-of-a-kind. Just look around you: How manyclothing retailers, hardware stores, air conditioning installersand electricians are truly unique?
The key to effective selling in this situation is whatadvertising and marketing professionals call a "unique sellingproposition" (USP). Unless you can pinpoint what makes yourbusiness unique in a world of hom*ogeneous competitors, you cannottarget your sales efforts successfully.
Pinpointing your USP requires some hard soul-searching andcreativity. One way to start is to analyze how other companies usetheir USPs to their advantage. This requires careful analysis ofother companies' ads and marketing messages. If you analyze whatthey say they sell, not just their product or servicecharacteristics, you can learn a great deal about how companiesdistinguish themselves from competitors.
For example, Charles Revson, founder of Revlon, always used tosay he sold hope, not makeup. Some airlines sell friendly service,while others sell on-time service. Neiman Marcus sells luxury,while Wal-Mart sells bargains.
Each of these is an example of a company that has found a USP"peg" on which to hang its marketing strategy. A business can pegits USP on product characteristics, price structure, placementstrategy (location and distribution) or promotional strategy. Theseare what marketers call the "four P's" of marketing. They aremanipulated to give a business a market position that sets it apartfrom the competition.
Sometimes a company focuses on one particular "peg," which alsodrives the strategy in other areas. A classic example is HanesL'Eggs hosiery. Back in an era when hosiery was sold primarily indepartment stores, Hanes opened a new distribution channel forhosiery sales. The idea: Since hosiery was a consumer staple, whynot sell it where other staples were sold--in grocery stores?
That placement strategy then drove the company's selection ofproduct packaging (a plastic egg) so the pantyhose did not seemincongruent in the supermarket. And because the product didn't haveto be pressed and wrapped in tissue and boxes, it could be pricedlower than other brands.
Here's how to uncover your USP and use it to power up yoursales:
- Put yourself in your customer's shoes. Toooften, entrepreneurs fall in love with their product or service andforget that it is the customer's needs, not their own, that theymust satisfy. Step back from your daily operations and carefullyscrutinize what your customers really want. Suppose you own a pizzaparlor. Sure, customers come into your pizza place for food. But isfood all they want? What could make them come back again and againand ignore your competition? The answer might be quality,convenience, reliability, friendliness, cleanliness, courtesy orcustomer service.
Remember, price is never the only reason people buy. If yourcompetition is beating you on pricing because they are larger, youhave to find another sales feature that addresses the customer'sneeds and then build your sales and promotional efforts around thatfeature.
- Know what motivates your customers' behaviorand buying decisions. Effective marketing requires you to be anamateur psychologist. You need to know what drives and motivatescustomers. Go beyond the traditional customer demographics, such asage, gender, race, income and geographic location, that mostbusinesses collect to analyze their sales trends. For our pizzashop example, it is not enough to know that 75 percent of yourcustomers are in the 18-to-25 age range. You need to look at theirmotives for buying pizza-taste, peer pressure, convenience and soon.
Cosmetics and liquor companies are great examples of industriesthat know the value of psychologically oriented promotion. Peoplebuy these products based on their desires (for pretty women,luxury, glamour and so on), not on their needs.
- Uncover the real reasons customers buy yourproduct instead of a competitor's. As your business grows,you'll be able to ask your best source of information: yourcustomers. For example, the pizza entrepreneur could ask them whythey like his pizza over others, plus ask them to rate theimportance of the features he offers, such as taste, size,ingredients, atmosphere and service. You will be surprised howhonest people are when you ask how you can improve yourservice.
If your business is just starting out, you won't have a lot ofcustomers to ask yet, so "shop" your competition instead. Manyretailers routinely drop into their competitors' stores to see whatand how they are selling. If you're really brave, try asking a fewof the customers after they leave the premises what they like anddislike about the competitors' products and services.
Once you've gone through this three-step market intelligenceprocess, you need to take the next--and hardest--step: clearingyour mind of any preconceived ideas about your product or serviceand being brutally honest. What features of your business jump outat you as something that sets you apart? What can you promote thatwill make customers want to patronize your business? How can youposition your business to highlight your USP?
Don't get discouraged. Successful business ownership is notabout having a unique product or service; it's about making yourproduct stand out--even in a market filled with similar items.
