Q&As: How to Develop a Unique Selling Proposition

Q: I am having trouble creating a USP. How should I approach its development?

A: Focus on what is unique about your product or service. Is your product or service bigger, cheaper, more durable, faster, more personalized, more convenient, or easier to use than the competition’s?

Then, determine how that product or service feature that distinguishes you from the competition could be perceived as a benefit by the user. For example, if you are selling low-fat ice cream that tastes just as good as regular ice cream, your USP might be “Stay slim eating great ice cream!”

Q: My consumer benefit doesn’t sound convincing. What should I do?

A: In many businesses the principal consumer benefit sounds too similar to those of other firms and not particularly differentiating or convincing. For example, many product and service companies emphasize generic benefits such as high quality or low price. This may work as a business strategy, but it doesn’t carry much punch as a USP.

A better approach is to give the reasons behind such generic benefits. For example, let’s say you are running an accounting service for small businesses. A USP of “high-quality service” is not really unique. It won’t sell your services and, frankly, would be a complete waste of your advertising expenditures. Instead, you may want to relate the reasons why your service is of such high quality. A common but effective method would be to state your years in business—“twenty-five years of experience.” Another approach would be to guarantee your benefit. For example, Midas Muffler emphasizes its quality with the USP of guaranteeing mufflers for “as long as you own your car.”

In price-competitive markets, many retailers offer price guarantees. A typical guarantee is that the retailer will refund 100 percent of the difference in price if you find an identical product for sale at a lower price elsewhere within 30 days. Some firms take this approach one step further and offer 110 percent of the difference. One home office supply store actually offers 150 percent of the difference!

You may want to be creative in your attempts to stand out from the competitive crowd. Offer to refund the difference at 100 percent or better, plus promise a bonus—a bottle of Champagne or perhaps tickets to a movie. Or, as one electronic store does, offer to monitor all competitor ads for 30 days after the sale and promise to mail an automatic refund check if a lower price for the product sold is advertised within that period.

Q: Can my USP be the same as my strategy?

A: It can, but it doesn’t have to be. However, your USP should be in harmony with your strategy. For example, the basic strategy of warehouse club retailers is to offer very low prices by minimizing costs. Some of the ways these firms minimize cost is to offer larger-size packaging, fewer product choices, and less service in a less attractive environment than might be found in a department store or supermarket. The USP of many warehouse clubs is usually similar to their core strategy—“low prices.” However, the reasons behind their ability to offer low prices are not emphasized because these reasons (i.e., fewer choices) might be seen as drawbacks by some consumers.

There are exceptions, however. In the Boston area, for example, Boch Toyota has successfully used a USP that emphasizes both its lower pricing and the reasons behind its ability to offer such pricing. It advertises that, unlike its competitors, it is has no mortgages and pays cash for the cars, saving lots of money and financing costs so it is able to sell cars to its customers for less.

Q: When should a USP be different than a strategy?

A: Two types of situations come to mind. One situation is where the customer will not be attracted to your business through knowledge of your strategy. For example, let’s say your strategy is to rent furniture to lower-income people who cannot afford to purchase furniture. Your USP isn’t going to be “Serving the lower-income populace, who can’t even afford to own a chair.” Instead, you would focus on the benefit to the consumer. Something like “Great furniture you can afford today” would appeal without being insulting.

Another situation would be when your basic strategy is similar to that of your competition. In this case, your USP needs to focus on a real or perceived difference to position your business against the competition effectively. An example of using a perceived difference is a bar and grill on Cape Cod that advertises “the coldest beer on the Cape.” Perhaps there’s no rational differentiation from competitors (who serves hot beer?), but it conveys an emotional good feeling about having a cold beer and perhaps even being a fun place to have it.

About Bob Adams

Bob Adams is a Harvard MBA serial entrepreneur. He has started over a dozen businesses including one that he launched with $1500 and sold for $40 million. He has written 17 books and created 52 online courses for entrepreneurs. Bob also founded BusinessTown, the go-to learning platform for starting and running a business.