After you have identified your target market and the type of product or service that you want to sell, your next step is to determine what will make you different from your competitors. You need to develop your unique selling proposition (USP), which answers the question, “Why would my customers buy from me instead of my competitors?” You have to determine what unique features or benefits your company can offer to your customers that your competitors cannot. Your unique selling proposition should make a promise to your customers about what they should expect from your business and its products and services. Your USP should be inseparable from your brand in the mind of your customer. Your USP will create a framework for every business decision that you make moving forward.
Here are some successful examples of unique selling propositions in corporate history:
- Domino’s Pizza: “You get fresh, hot pizza delivered to your door in 30 minutes or less—or it’s free.”
- FedEx: “When your package absolutely, positively has to get there overnight.”
- Kiva: “Loans that Change Lives”
- Southwest Airlines: “We are the low-fare airline.”
- TOMS Shoes: “With every product you purchase, TOMS will help a person in need.”
Your unique selling proposition does not have to fit into a one-sentence catch phrase, but it should define who you are as a business. Amazon’s USP is its commitment to creating the best online shopping experience that currently exists. Zappos’ USP is its offer of over-the-top customer service. Your USP can be just about anything that your customers care enough about that differentiates you from your competitors.
The best way to develop your USP is by talking to your potential customers and listening to what they do not like about the industry space that you are in. For example, if you were opening up a lawn care service, you might hear from your potential customers that it is almost impossible to get lawn care service companies to show up when they say they are going to show up. You could turn that frustration into your unique selling proposition by guaranteeing that you will show up within an hour of the specified time that you stated.
Don’t Compete on Price
There is one thing that should not be your unique selling proposition: price. Your USP should never just be that you are cheaper than your competitors. Having a war with other companies in your market space, to determine who can charge the lowest price, is a great way to ensure that nobody in your market has a profitable business. Instead of trying to be the cheapest company in your space, provide your customers more value or unique benefits that your competitors cannot offer. Price is not the key determining factor that consumers use to make purchasing decisions. If it were, everyone would be shopping at Dollar General and Dollar Tree. People are willing to pay more for your product if they see the value in it. Apple’s smartphones and MP3 players are some of the highest priced in the market, but consumers buy them every day because they see value in the products that Apple offers.
Internet Businesses Have USPs, Too
Unique selling propositions are not just something that publicly-traded companies do. Small Internet businesses need to create and utilize them as well. Pat Flynn (www.patflynn.me) created a name for himself by being absolutely transparent with his readers and sharing how much income he made every month. Steve Kamb created a wildly successful online fitness community by catering specifically for nerds (www.nerdfitness.com). Chris Ducker was able to set himself apart from other Internet business gurus by focusing exclusively on teaching how to leverage virtual assistance (www.chrisducker.com). Jaime Tardy was able to set her show apart from other interview podcasts by exclusively interviewing millionaires (www.eventualmillionaire.com). There is a unique selling proposition behind every great online entrepreneur. Look for what your competitors are lacking, what your customers are frustrated with in your industry, or what you could combine effectively to meet customer needs in a unique way.
When I started Analyst Ratings Network in 2011, I had heard from a number of frustrated individual investors who were tired of not being able to access fast and reliable financial data. My readers also told me that the data analysis they saw was sometimes biased, coming from financial authors who owned the stocks that they wrote about, and they were not impressed. There are expensive services from Bloomberg and Reuters that provide professional investors up-to-the-minute financial information, but these services are out of reach for retail investors. Based on this feedback, my unique selling proposition for Analyst Ratings Network has become providing real-time financial data in a convenient format. I am committed to providing only financial data to my readers so that they can do their own analysis. I specifically do not recommend or even comment on any stocks. I am also committed to getting financial data to my readers as quickly as possible, which is why our morning newsletter comes out 30 minutes before the market opens. We also provide real-time feeds of financial data and real-time database searches to our customers as well.
After you have developed your unique selling proposition, it should become an important consideration in every future business decision you make. By making business decisions through the lens of your unique selling proposition, you are making sure that you remain committed to the key differentiating factors that set you apart from your competitors.
- Talk to your potential customers about common frustrations in your industry.
- Develop your unique selling proposition.
- Consider your company’s unique selling proposition when making all future business decisions.