How to Create Your USP
It’s surprising how many companies will begin their marketing without being able to answer the question, “What is your USP?”
Standing for “Unique Selling Point”, a USP is exactly what it sounds like: an aspect of your company, product or service that convinces customers to buy from you, rather than any of your competitors. A good USP can make or break your marketing strategy, which is why it’s vital to take the time to get yours right. That’s why we’ll be taking a look at creating a strong, compelling USP that can form the backbone of your marketing strategy.
Compare Your USP To Your Competitors’ USP
Look at the differences between your business and your competitor’s business. One good way of doing that is through a simple SWOT analysis – do one for your own business, but then also for your main two competitors. Get a feel for not only your own strengths and weaknesses, but those of your competitors too. If you’re operating in a saturated environment, then you may need to attack your competitors sometimes. This may sound aggressive, but it doesn’t always have to be: if your SWOT analysis shows that your competitor struggles to gain any ground without a particular audience (such as, for example, manufacturers within a particular industry – such as marine engineering), you can attack their market share by targeting that audience for yourself.
Take a look at your core USPs (based around your product or service) first. Is there any difference to that of your competitors? For example, your business may be selling the same product, but perhaps yours is made from a different type of metal – one that is stronger and longer lasting.
There won’t always be an exploitable difference you can find in your core USP. Luckily, you can also look at your soft USPs. A soft USP is anything not related directly to the business or product you’re selling, from better customer service to a more eco-friendly focus. A key aspect of convincing your audience of the value of a soft USP is making it tangible – simply claiming you have an eco-friendly focus is far less effective than demonstrating it, with examples of how your company is environmentally friendly.
What If My Product Costs More Than My Competitors’?
Price can be a strong selling point – but it’s not the only selling point. It’s often overestimated how big a factor price is in a customer’s buying decisions. Think about it: Most of us have the means to make ourselves a cup of coffee at home, yet Starbucks is still packed every day with people from all walks of life, buying coffee that costs them considerably more than if they’d stayed home.
GMA has a client who sells glazing, doors and frames for patios and conservatories. They have a market competitor who also sells doors and frames, but for a much lower price. However, the price is lower for a reason – the competitor’s product lasts, on average, about eight years less. After about five or six years it already looks shabby, and a replacement is right around the corner. Meanwhile, our client’s product is still looking good, and won’t need to be replaced for another eight years – meaning that over a twenty year period, it will actually cost the customer less to choose our client. What makes the difference is justifying this to the client’s customers. A vague statement about quality is too imprecise to convince a customer. But showing them the savings they will actually be making, through comparison images and positive customer feedback, prompts them to start doing the maths in their head.
A competitive advantage is similar to a USP in some ways; they both exist to convince a customer of the value of choosing you over your competitors. However, a competitive advantage is not the same thing as a USP. A competitive advantage sets you apart from your competitors, and offers a value or a benefit that your competitors either do not or cannot.
GMA Georgia has a client in the printer cartridge business, a saturated environment where market share is generally fought on price – who can offer the cheapest cartridges? Rather than losing profit by trying to undercut the competitors on price, they asked the client about their delivery options. “We can deliver in three days,” the clients replied. “Our competitors deliver in six days.”
A key part of crafting a competitive advantage is understanding your customer and what they want. A customer who has just run out of ink for their printer is unlikely to have planned for that – very few people monitor their printer’s ink levels closely enough to have a back-up cartridge or two available whenever they need some. In a situation where your customer needs to be able to print something, but they’re all out of ink cartridges, the most important factor in their buying decision isn’t price – it’s delivery speed.
Dean Spencer, GMA UK Managing Director, asked our GMA Georgia client if they could deliver in one day instead of three? Yes, they said. How about on the same day? They said yes, that could be done. So two premium services were created – one-day delivery and same-day delivery. A desperate customer in need of replacement printer cartridges could pay extra for one of these options, and after relying on the client’s company once, would be more likely to return for future cartridge replacements. This was a strong competitive advantage, and the clients had not been promoting it at all. In fact, they hadn’t even realised how strong it was!
You can still appeal to the part of your customer’s brain that wants to save money without lowering your actual prices. Think about how you sell your product or service.
At GMA we have another client, who typically saw points in the year where their sales were very low, and peak points where sales were very high. The client asked us, “How can I even this out for more consistent sales?” This client sold machinery, so we asked them if they had ever considered letting customers rent machines as well as buy them. “No,” said the client. “I don’t think the value would be there for us.”
We sat down with an Excel spreadsheet and did some figures, and I could see the light-bulb switch on above my client’s head when they realised that actually, the value was there. There were customers who didn’t want to be tied down for three years to a particular machine, and preferred the shorter engagement period, plus customers who only needed the machinery occasionally and couldn’t afford the expense of buying it – but could afford to rent it. Not only that, as we saw with the previous client and their printer cartridges, once customers had a taste of the product on offer, they came back. During previously quiet periods, the rental model – an offer only available during certain times of the year – now brings in new income.
The software market is one great example of how to maximise your soft USP, with companies like Google and Timetastic charging monthly for rental of their products (such as Gmail for Business). With the sub-benefits of being able to use their more secure, frequently updated server, and being able to opt-in month-by-month for the price of a few cups of coffee, these companies are looking at creating loyal lifetime customers.
Use What’s Already There
We’ve looked at differences in your core USP and your competitors’ core USP, and in maximising elements like delivery, commitment and quality to really make a soft USP sing. We’ve discussed competitive advantages and how they can give you an edge over your competitors, but there’s one unique thing your business is sure to possess that you can capitalise on: your people. There’s only one of each person in your team – what knowledge do they have? What expertise and experience? Can you offer your customers a little bit of that expertise?
Picture this: A machine in a busy factory breaks down. The owner calls an engineer to fix it, so production can continue. After examining the machine for twenty minutes, the engineer produces a hammer, and with one short strike hits a particular part of the machine. Immediately, the machine bursts back to life and begins working again. The engineer asks the owner for his payment: £1000. “£1000?” says the owner. “But all you did was hit it with a hammer!”
“Yes,” says the engineer. “But I knew where to hit it, and how hard.”
Sometimes, it all comes down to the expertise of a specialist.
There are several ways you can offer this. There’s offering workshops that relate to your product or service. For example, our client who sold machinery also ran workshops for engineers on how to troubleshoot their own machines. You could also run training courses, or offer telephone or email advice and support. By making the knowledge of your team available to your customers you not only add value to the product or service you’re already selling them, but you give them an extra incentive to choose you over your competitors. The expertise already on your team can be a unique competitive advantage if marketed correctly.
The work doesn’t stop once you’ve got a great USP, of course. You’ll also need a clever marketing strategy to take advantage of it. But if your USP is a good one, then you’re beginning with a strong foundation for the rest of your marketing – and it will show.
Is your USP working for you? Do you have the competitive advantages to stand out in your market? Learn how to maximise your USP, with personal advice from GMA Managing Director Dean Spencer, with our next workshop on Wednesday July 25th.