If you are planning to start a business, the first thing you need to do is to find out why people would patronize your product or service over the competition. This quality is your Unique Selling Proposition, or USP. It is unique in the sense that it should differentiate your business from everyone else in the industry.
It must be a quality or determining factor that will make your business stand out or be readily identifiable with a target market.
The globalization of business has made competition tighter. Local businesses are challenging foreign brands and often present lower priced alternatives to gain market share. But pricing is just one aspect of differentiation. Not all consumers patronize a product just because it is more affordable.
Product quality is also just another criterion for differentiation. Again, consumers are not easily sold on the promise of quality because this can be subjective and consistency is nearly impossible to deliver.
More From Entrepreneur.com
While you can certainly reference the Four P’s in Marketing: Pricing Structure, Product Quality, Placement Strategy and Promotional Strategy, given the high degree of competition, you should implement more creative ways to find the USP for your business.
1. Study the competition.
When an entrepreneur develops an idea, he or she believes it could be the “next big thing”. That type of thinking could make your product the next “what might have been”
The first place you should start is with the competition. Find out:
- What consumers like about their product or service
- Possible product or service differentiators
- Where they position their business
- How they promote their business
- Possible pricing points
A good example would be athletic apparel maker Under Armour. For years it lay in the shadows of Nike. As a long standing fixture in the industry, Nike had to position its brand to appeal to a wider demographic. It could not implement marketing strategies that would discriminate other market segments.
And this is how two-time NBA MVP Stephen Curry landed in the lap of Under Armour.30 percent with revenues hitting $1.05 Billion
2. Understand your market.
Because of the Internet, today’s consumers are more informed. Not only can they search for the information they need but social media has become a big influence on their decision to buy.
According to surveys, 61 percent of consumers have had their purchasing decisions influenced by a blog or a social media post.
Tastes, preferences and demand patterns are more difficult to pinpoint now because of the availability of information.
Related: The 7 Stages Of Branding
Thus, you must remain attuned with your market’s buying behavior. If you have a website, you can use analytics to help identify possible factors that influence buying behavior. These include the source of traffic, the topics which interest them and their frequency of visits.
You could also conduct surveys through email marketing or engage them in forums or your social media page. Find out what factors motivate your customers to purchase your product.
In 2010, after years of sales decline, Domino’s CEO J. Patrick Doyle publicly apologized to the public for selling “awful pizza”. Their market studies showed consumers were not happy with the taste of Domino’s Pizza.
Management decided to spend millions to improve its recipe. Domino’s subjected many combinations of cheeses, sauces and ingredients to 1,800 taste tastes until it came out on top of the competition.
By 2013, Domino’s recorded the highest international store growth at 43 percent much higher than Starbucks, McDonald’s and Dunkin’ Donuts. Its net customer satisfaction rating grew from 69 percent to 81 percent.
3. Find out your comparative advantage.
Once you’ve researched the competitive advantage of your competitor, it is time to shift your focus on your comparative advantage.
A comparative advantage is a unique feature your product or service has that your competitor does not have.
A good example would be Marcos Mollman of ClosetBox.me, a self-storage business from the US that differentiates itself from its competition by offering free pick up and on- demand return delivery services to its clients. These add – on conveniences are enough for clients to choose them over others in the same industry.
The idea behind comparative advantage is to find a niche that would readily acknowledge and appreciate your value proposition. You are not directly competing for the same market as your competitors. Instead you are narrowing your search for a target market.
Niche businesses are often referred to as boutique firms and are fast becoming the preferred option given the unpredictability of business conditions. Not only are boutique firms more affordable but their programs and plans are more flexible.
4. Integrate your personality.
In ways you can view your USP as the purpose of your product or service. It should answer the question “Why?” The best way to define your purpose is to identify your core values.
Core values are more than just words on a website. Your core values are the guiding principles of every decision you make. Many businesses have focused on refining their values because consumers are more discerning with the brands they identify with.
Integrating your personality into your purpose will help consumers understand who you are and what you business is all about.
One of the best examples would be the late S. Truett Cathy, the founder of Chick-Fil-A. A devout Christian, Cathy closed all Chick-Fil-A stores on a Sunday. Even though Sunday traditionally presents a big day for sales, Cathy did not want it to compromise his beliefs one of which is to keep Sunday work-free.
Instead of vilifying him for it, consumers praised Cathy for adhering to his values. Chick-Fil-A generates the highest average sales per store at $3.1 Million. The closest competitor, KFC, is far behind at $960,000.
5. Test and refine your USP.
If you have identified a list of potential USP’s, the next step is to test them to your target market. The testing period is very important because this is where you can refine your message.
Your message has to be consistent and aligned with your USP. It must deliver the content to your market clearly and definitively. Consumers do not have much time or patience to analyze your message. It must resonate with them as soon as possible.
When testing your USP, present your marketing and advertising paraphernalia. If you have website, have our respondents visit it and comment as they see fit. Showcase your logo, tagline, catchphrase and marketing copy.
All of these must be aligned with the respective USP. Be patient when testing your USP. Your tests must consistently yield consistent results.
Establishing the USP should be the very first item on your agenda when starting a business. Without it, you may be lost or overlooked in markets that are perfectly competitive.
It may take time to identify your USP but do not be discouraged. Finding the USP for your business is not about perfection or accuracy. It is about determining the differentiating or defining point that will make the market take notice of your business.