Imagine this scenario: You jump out of bed and realize that somewhere between hitting the sack and your REM cycle, you have come up with a product idea that is going to revolutionize your business—it might even revolutionize the world. You are confident that your product is going to sell itself, because it solves a huge need and nothing like it has existed before.
For most people, this is not how the ideation process will go. In all likelihood, your business idea won’t be all that unique, but rather a slightly different version of a business you’ve already seen or heard of. One of the most successful approaches to starting a business is to take what someone else is doing and do it better. You know that there is already a market for this business or product, and others are already making money in this space. The tricky part, however, is differentiating yourself from the competition. This is where the Unique Selling Proposition comes in.
What is a Unique Selling Proposition (USP)?
A USP states very specifically why your product or service will matter to the consumer. It communicates to customers how your product or service is better or different from similar ones that are currently available on the market.
Why does a USP matter?
If you are going to sell a product or service to the masses, you have to first sell it to yourself, your investors, your employees and anyone else with a vested interest in your business. As the business owner, creating a USP walks you through the very important process of determining what is unique about your product or service so that these distinctions can guide your marketing and sales efforts, as well as your strategies for growth.
It also helps to think like a customer or an investor in order to truly evaluate the merit of an idea. If you were a customer, would you really buy this product over any of its competitors? Would you invest your money in this idea if someone else came up with it? If the answer is no, then it’s likely you are not differentiating yourself enough from the competition.
How do I develop a USP?
Drafting USP shouldn't be quick, and it shouldn't be an afterthought. To do it well, you will need to spend some time researching your competition and tweaking your idea. You must be ready to let go of any emotional attachment you might have to an idea; that way, you are totally honest and realistic about the potential it holds. Here is a simple step-by-step process to guide you through composing a USP:
- Create a name. The name might change as the idea is fleshed out. However, start with a compelling, catchy product or service name that you could envision getting a customer’s attention. If part of your sales strategy is to have a very unique brand, your company name can play a big role in your USP.
- Provide a brief description of the product or service. What will it do? How will it function? What features and benefits will it offer? What is your expected price point?
- Determine the type of person who will buy this product. People can think a product or service is really cool, but that doesn't mean they'll actually buy it. You must have a very clear picture of the type of person who will be willing to spend money on what you are offering.
- Answer "What problem does this product or service solve?" How will it make your customers' lives better? What are the three most important benefits customers will gain if they purchase the product? What value will the product or service offer your customers that they can’t get anywhere else?
- List competitive products or services. This step requires that you conduct market research and compile data on your competitors. Spend some time browsing competitors' websites, or visit their stores if possible. Read online reviews and testimonials on their products. Check out their social media accounts. What are customers complaining about? What are the strengths and weaknesses of the competition's products or services? Then thoroughly detail what makes yours unique, better or more innovative. In short, what is so special about your product that customers will choose yours over the competition?
- Be flexible. If your target market is already oversaturated with available products or services, you might consider marketing your product to a new vertical. For example, let’s say your town already has two travelling IT services that are fairly popular amongst young people; perhaps you will differentiate yourself by targeting parents and elderly customers who are less technologically savvy, and tailor your branding and your customer service approach to their needs.
Once you've drafted your USP, see if it actually resonates with people. Rather than making assumptions, take time to actually ask people within this demographic if they would use your product or service, and set aside some resources to conduct market surveys. If the response from your target audience is bleak, you either need to take a new approach to this idea, a new approach to your target demographic, or you need to go back to the drawing board to flesh out a new idea altogether.