What is Your Unique Selling Proposition (USP)?
This is an exclusive extract from Boss It by Carl Reader.
A USP is what sets a business apart from its competitors. If you cannot describe your USP, you will find it difficult to attract customers, staff and funders. Even if you are a sole proprietor, you need to work out what it is that you do differently, and how to promote it to the outside world.
Let’s take an example. Imagine you’re a decorator. You’re currently employed and are frustrated with the way that your company does business. You hate leaving customers with what you feel is a sloppy job and a bill that is much higher than expected. What’s more, you don’t see any of that high fee because you are paid an hourly rate. Enough is enough!
You decide to set up on your own. You make a commitment to only charge on a fixed-fee basis, rather than by the hour. Once you’ve quoted an amount, you commit to it. You’ll use the highest levels of protection on the floors and offer a ‘no-spill guarantee’. Those two service differentiators will lead towards your USP and should set you apart from other decorating companies.
You’ve also thought about the future of decorating as an industry and decided that you need to keep on top of what’s happening in the wider world. You know that DIY stores are offering ‘mess-free’ painting products, and customers might feel that they can do what you’re offering by themselves, and you’ve also got your guarantee to live up to – so, it might be that you decide to attend trade shows and use the latest tools and methods to help you live up to your standards, and offer a better option than DIY.
You might also decide to buy a route mapping service, so that your customers can find out exactly when you will be arriving, by text message. Not only will these things continue to add to your USP, but will also be an investment in ‘sustaining innovation’. You aren’t reinventing the wheel, but you are keeping on top of changes and trends.
For most businesses, their USP lies in how they do it – the ‘internal’ operations that set them apart from other companies – or in what they do for their customers – the ‘external’ selling proposition. I’ve listed a few ideas in Table 3.1 to help you to start thinking about where your USP could lie in comparison with other businesses.
Table 3.1: Internal and external USPs
Examples of internal USPs
Technological advancements – you may have market-leading technology, either self-built or purchased.
Robust processes and procedures – you may have invested time in ensuring that your processes are as efficient as possible.
Buying power/economies of scale – you may be able to buy your stock cheaper than others.
Contacts – you might simply have a better ‘black book’ than your competitors.
Exclusive distributorships – you may be the only one able to buy your stock in a region.
Examples of external USPs
Sales channels – you may have the opportunity to sell your product in supermarkets, or fit the right criteria to sell your services into certain corporates or the public sector.
Speed – you may be able to turn around your service more quickly than other businesses.
End price – you may be able to produce your goods or price your services cheaper than your competitors.
Convenience – you might be able to offer your customers more convenience, perhaps by visiting their homes in an unserved region, or through online offerings.
Service – you may offer a personal service that bigger businesses just can’t.
You’ll see in the examples in Table 3.1 that some internal factors of your USP naturally lead to external factors; and some desired external factors may prompt you to work on internal matters to be able to achieve them.
One thing that is important to remember is the "U" in USP – Unique. If your USP is something that is considered to be industry standard, it’s not a USP worth shouting about. There’s only one way to find out if your offering is truly unique, and that’s research! We cover research in a little more depth when we talk about your business plan, but in the meantime, a quick search online will give you some clues about what your competitors are doing. Usually, if a business has a genuine USP, they shout from the rooftops about it!
Your USP also then allows you to think about your ‘elevator pitch’. This isn’t an excuse to create a sales pitch, but instead is an opportunity to summarize your business in a compelling fashion, in just a couple of sentences. A perfect way of creating an elevator pitch is to focus on your customer-facing USP and the benefits that your customers receive. So, rather than describing yourself as ‘a decorator with 15 years’ experience who prides themselves on their work’ (you-focused), you can be ‘a decorator who transforms rooms, at a fixed price with a no-quibble money-back guarantee’ (customer-focused). Who would you rather do business with?
A moment to reflect
How is your customer going to benefit from your business? How are you different? What is your dream? What is your USP? And how will you communicate that in an elevator pitch?