In Search of a USP: the Definitive Guide to Creating a Strong Unique Selling Proposition

As I have mentioned in my previous posts on marketing strategy, one of the most important things you do in marketing is researching, formulating and communicating your USP – unique selling proposition (sometimes called a unique selling point).

what is a usp

What is a USP?

USP in marketing is a short phrase that highlights the main benefit for your customer, is unique to your company or product and makes the customers choose you over the competition. USP may, but does not have to, be identical to your company slogan.  USP is directed at the customer and is the core of the marketing communication strategy.

The USP can be formulated for your company, product, service or brand. It includes one or maximum two points and is never a list.

usp-components

There are different approaches to finding your marketing USP, below I will describe three most common approaches and provide you with examples. I will also outline some typical mistakes.

customer usp

Customer-based approach

    The first approach logically focuses on customers and what they perceive as valuable.
  • Who are your customers?

This includes correctly segmenting the market you are in and selecting the appropriate target segments. Do not try to position your product for too many segments at once, focus is the key to success in marketing.

  • What is important to them?

Try putting yourself into your customer’s shoes. A good exercise for this is creating buyer personas, as this helps to understand the target customer better and even develop more empathy towards them.

  • What wants and needs do your customers have?

An obvious way of finding out what represents value to your customers is asking them about their wants and needs (i.e. doing a marketing survey). However, this will be only be the top of the iceberg. Generally, when formulating your USP it is better to go a level deeper and consider more hidden (secret) needs.

For example, the Rituals brand is built around the need for relaxation and escaping from stress instead of a very basic need of keeping one’s body clean.

  • How do they make buying decisions?

According to neuromarketing, people are often driven by subconscious stimuli that have little to do with their rational decisions. The rule of thumb is: the lower is the price, the less rational is the buying decision. (Think of candy and chocolate bars at the cash register).

In case of larger sums, customers tend to rationalize the decisions more, sometimes taking days or weeks to compare price and quality of similar products. However, what is considered a high price buy will largely depend on the income or the psychometric qualities of your target group. Besides, even rational decisions can be influenced by marketing tools.

  • Why do they buy your product?

If you already have a product that enjoys customer acceptance, make it part of your USP.  If your product solves a particular customer problem, this has obvious value to them. For example, the USP of Walmart is “Every day low prices on a broad assortment – anytime, anywhere.” The reason why customers go to Walmart is that they are able to find a large range of products at guaranteed low prices.  In addition, Walmart in the US offers a good store coverage with over 5,000 stores. It also offers its products online.

  • How do targeted segments differ from one another?

Sometimes it is not possible to communicate a USP that will work across all customer segments. Depending on how different the segments are, you might need to come up with a different Unique Sales Proposition for each segment.

usp competition

Competition-based approach

Another popular strategy for formulating your USP is selecting something that makes you stand apart from your competitors.

  • Who are your competitors?

To understand your competitors, you should be aware of the market you are in. You can analyze both your direct and indirect competition.

  • How are you different from the competitors?

When doing competitor analysis, you can pay attention to the following points:

– The range of products and services they offer

– The target customer segments

– The marketing channels and marketing instruments they use

– What unique value they try to communicate to customers through their marketing

Having looked at several most prominent competitors, you will find some key differences between you and the competitors (whether real or perceived).

  • What are you doing or can you do better than your competitors?

During a thorough competitor analysis, you will find out what they are currently doing better than you and where you can possibly learn from them (benchmarking).

During your analysis you are also likely to find some “weak spots” of your competitors. For this, you can use, for example, reviews and customer opinions. Dig deeper to find if this is something that you are already doing better (or can do better).

  • Why should customers choose you over the competition?

When formulating your USP based on Competition approach, select something that both makes you stand apart from your competitors and is relatively difficult for them to imitate. This will eventually come back to customers because your USP should induce them to choose you over the competition.

internal values usp

Intrinsic approach

The next approach focuses on your company and the unique capabilities you have.

  • What do you do?

Start with listing all products and services you currently offer or would like to offer in the near future.  The list may get quite long, but this is just the first step.

  • What do you do especially well?

After you have a full list of what you could possibly do, select the areas where you really feel comfortable and possess a high level of expertise. Ideally, this should not be a kind of tacit knowledge that only one person has but something that can be shared and transferred between team members.

  • How is that valuable?

Analyze, what products or services are already popular within your target audience and what makes them sell so well.

  • What is difficult to copy?

Your USP should not only reflect what you can do especially well but also set you apart from competitors. The unique quality of your product can be real (e.g. a patented recipe or a geographic origin of a product) or perceived (a strong brand). For example, part of Chanel’s USP (female liberation and wearable haute couture) is the unique personality of its founder, Gabrielle Chanel.

  • What don’t you do?

A successful brand positioning always includes a target segment. There is nothing more dangerous for your brand and your USP than trying to serve too many market segments. This dilutes your marketing message and leads to waste coverage during any marketing campaign.

Compare these USPs by two different IT companies: “Creating value for our customers with our expertise” vs “Innovative IT-solutions for Retail and Logistics”.  I think that the second one offers much more clarity and is more attractive to their target customers.

  • What is your company mission?

Mission is basically a reason why a company exists. This is the value it brings externally (customers & stakeholders) and internally (employees & shareholders) on a day-to-day basis.

  • What is your vision?

As opposed to mission, vision is future-oriented. It is a description of an “ideal self” of a company or where it wants to be in the future. A vision should be (@robert.lueders):

– Easy to remember

– Clear to understand

– Future-oriented

– Inspiring

– Challenging

– Oriented towards your primary goal

Sometimes, mission & vision statements resemble the USP or even replace it in the company communication. Although they can be interrelated, the essential difference between them is that mission and vision are directed internally reflecting company philosophy and the way things are done.

The USP, on the other hand is what the company wants to communicate externally toward the target customer. Besides, if a company offers several products geared towards different customer groups, it may have several USPs, however, it will only have one mission and one vision statements.

usp ideas

Some USP ideas

Below I will list some ideas that can be used for creating your USP:

  • Exceptionally large product variety
  • Offering exclusive products symbolizing status and wealth
  • Providing high standards of security or reliability
  • The lowest price in the given segment or for the given type of product
  • A complex product or technology made easy to use
  • Saving time for your customer
  • Doing good by selling the product (e.g. fair trade)
  • Providing flexibility and customized solutions
  • Making the process of utilizing the product or the service enjoyable
  • Expertise for a given (niche) topic
  • Unique company or product history
  • Local company with high awareness of the local market
mistakes usp

Mistakes in USP

And last, but not least, I will list some typical mistakes in formulating your USP:

  • Ignoring your present state (how you position yourself now)

Choosing a USP that is too different from your present market positioning you will cause confusion and diminish the credibility of the USP.

  • Being too generic (selling everything to everyone)

If someone completely unfamiliar with your company hears your USP, they should get an idea of a) what you do b) who your customers are. Thus, avoid too generic USPs such as “improving your life”.

  • Not considering the customer

Independently of what approach to creating a USP you will choose, you should by no means disregard the customers and their needs.

  • Including too many benefits into a USP

A USP should not include more than 1-2 benefits. These are the key points you focus on, the ones that stand for the highest customer value. Do not dilute your message by including too many points into your unique selling proposition.

  • Not being unique (different from competition)

In order to cut through the clutter, you should try to avoid “standard” phrases and formulate your USP in a more unique or creative way. E.g. the Red Bull energy drink uses the phrase “Gives you Wiiings”

  • Ignoring the market trends

Sometimes a USP needs to be changed or re-formulated over time due to the changing market trends, new technology, changes in the tastes of your target audience or in case of a major event that affects your industry.  For example, due to the increasing importance of environment protection, some brands started to use USPs highlighting the sustainability of their products.

  • Not being truthful

When working on your USP, always make sure that it connects to reality. Negative customer opinions can spread really fast nowadays, so it is essential that the benefit you claim really exists.

As a final thought, I would like, once again, to hightlight the importance of selecting the right USP that reflects your internal expertise, presents value to your customer and sets you apart from competition.

 

 

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4 Most Important Strategic Marketing Steps

In this post, I will outline the most important steps in creating your marketing strategy. This checklist enables you to create a successful marketing plan.

In this post, I will outline the most important steps in creating your marketing strategy. If you start with this checklist, the rest of your marketing strategy will fall into place more easily.

Marketing Step 1: Who am I?

The first and foremost thing to do is to define your company. This includes the type of the company (a start up, a small local business, a medium-sized company, etc.) and the line of business you are in (banking, catering, consulting services, retail, etc.). Also, think about your branding strategy, i.e. how you want your customers to perceive you. You can use different brand-building models. One very well known model is brand identity prism. At this point, you do not have to worry about brand appearance (logos, colors, etc.). Instead, you can ask yourself the following questions:

  • What does my company (brand) do?
  • What impression do I want to make as a company (brand)?
  • What is the personality of my company (brand)?
  • What relationship does my company (brand) have to the customer?
  • What kind of people are my customers?
  • What are my company (brand) values and principles?

For example: Tuscolo is a small local chain of Italian restaurants that serves real Italian food in a friendly and familiar atmosphere. It incorporates tradition and creates authentic Italian experience through its interior, service and food presentation. It caters for families, couples and groups of friends and colleagues who want to enjoy good food in a relaxed setting.

Marketing Step 2: What is my offering?

Decide, what products and/or services you are going to offer. Do not think in terms of what you can possibly offer. This will produce difficulty in creating a well-defined product portfolio and diminish any marketing efforts.

So, how do you define your offering? On the one hand, there should be a market for it (do some market research or ask your current customers and business partners). On the other hand, this should be something you can do or produce really well (see Step 4). Additionally, think about what is feasible to offer at the current company state. Then, you will also need to define the key features and properties of your products or services.

Marketing Step 3: Who are my customers?

The next important element of your marketing strategy is customers. To make things easier for you, you can use the following plan. Firstly, think in terms of generic target group definition – such B2B or B2C customers and the geographical area you want to serve.

Add parameters such as the size of company and the line of business (for B2B) or age and gender (for B2C). Secondly, specify this by segmenting within your target group. E.g. large vs medium-sized companies, retail vs wholesale, etc. Third, dive deeper into the definition of each segment and develop customer personas. In case of B2B, that would be profiles of individual decision makers. Try to understand their motivation, their needs and wants, how they communicate and what they expect from a product or a service.

Marketing Step 4: What is my USP?

USP or Unique Selling Proposition is the cornerstone of every marketing strategy. It is what sets you apart from competition. Basically, it is the reason Why for your customers. You can develop a generic USP for the company or think in terms of USP’s for separate products or USP’s for different customer segments.

For example, you own a bookstore specializing in nonfiction literature located close to a university. The first customer segment is students. The USP for them is low prices/discount schemes and fast in-store delivery for the books they require for their courses. Another customer segment are university researchers and professors. The USP for them is different: a large range of specialized books in several languages available upon request and courier delivery services. You may have more segments and USP’s:  people living in the vicinity of your shop (you have a good coffee bar), hobby researchers (your employees take time to provide advice on a variety of subjects and make literature recommendations), etc.

Generally, you should not jump into doing anything or start spending marketing budget before you have made these four steps and created a solid foundation for your marketing strategy.

strategic marketing steps

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Why I became a Fan of Uncreative Marketing

In this post, I will talk about several cases when an uncreative approach to marketing is your way to go. For example, when crafting or executing a marketing strategy, you need to avoid creative chaos and work in a structured way. Also, nowadays marketing is based on data, so the analytical approach to marketing is often more important than creativity.

Marketers are creative people. This sounds like a general truth, right? However, my experience shows that sometimes the creative part of marketing (or an excess of it) can do more harm than good.

In this post I will talk about several cases when an UNcreative approach to marketing is your way to go.

Designing a marketing strategy

Unless you only want to invest into guerrilla marketing, designing a marketing strategy is a much less creative process that you expect. As I outlined in my previous posts, you need to be very structured and do a lot research to craft actionable marketing steps. Marketing strategy includes competition analysis, market research, working out your USP and product positioning. Let’s be honest, even guerrilla marketing is noways based on research, e.g. of human perception and behavior.

Executing the strategy

This is where creativity can really become disturbing. Imagine that you have just spent several weeks or months on creating your marketing strategy. You are now starting to implement it. At the same time, you are surrounded by a swarm of “creative ideas” on what else can be done or tried. For example, you could implement some new email marketing software or cooperate with a famous blogger or redesign your website with a better color scheme… Those ideas may come from your boss, your colleagues, or even yourself. Are they good ideas? Sure. Are they helpful? Definitely not.

One of my professors used to say that a strategy is basically selecting in which direction to go. However, if you decide to go to the left, this mostly implies that you cannot go to the right.

Having all those creative ideas while you have already started moving in the selected direction results in contradicting marketing messages. It also prevents you from executing the originally selected strategy. And, ultimately, from making any progress at all.

Working with data

Very often somebody “creative” is not really keen on crunching numbers or digging into the database on a daily basis. Well, the bad news is that analyzing and processing data is one of the cornerstone marketing activities. How do you know how your last campaign performed? How would you select a banner design? Which customer segment should you focus on? The answer to all these questions is data – from an analytics tool, A/B tests or a CRM database.

Creativity is fine – as long as it is based on data insights.

Everyday marketing

uncreative marketing grey wall
Marketing is often as boring as this grey wall…

Marketing a product is a long-term process that requires a lot of endurance. This means that the majority of your time as a marketer will be spent on rather tedious tasks. For example, preparing reports. Or re-writing the same marketing copy over and over. Or editing product specifications on the company website. Nothing super fancy or creative, as you see. If your creative spirit prevents you from concentrating on those kinds of tasks and doing them well, this can become problematic.

The role and the functions of a marketing manager have undergone significant changes in the past years. This most likely means that your marketing should become less creative but more data-driven and consistent. 

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