USP business: Definition, Types, and Examples

A unique selling proposition (USP) is the key factor that differentiates a company's product or service from its competitors. A USP clearly articulates the unique benefit that makes a company's offering superior to alternatives in the market.

The term "unique selling proposition" was coined by television advertising pioneer Rosser Reeves in the 1940s. A USP can be based on product features, price structure, placement strategy, or promotional approach - the "four P's" of marketing.

A compelling USP does the following:

• Targets a specific audience and addresses their needs
• Focuses on what the customer values, not just what is unique about the product
• Makes a promise that is both unique and credible
• Goes beyond a slogan to influence all aspects of a business

The Importance of a USP

Having a strong USP provides several key benefits to a business:

1. Differentiation: A USP sets a company apart from competitors in the minds of consumers. 67% of buyers say it's important that brands provide them with unique content.

2. Improved revenue: A compelling USP gives customers a specific reason to choose a company, leading to increased sales. Businesses with a clear USP see an average revenue increase of 21%.

3. Customer loyalty: When a USP resonates with a target audience, it builds brand affinity and repeat business. 89% of consumers stay loyal to brands that share their values.

4. Streamlined marketing: A USP provides a focal point to guide branding, messaging, and marketing decisions. Companies with a strong USP generate 31% more leads than those without one.

Types of Unique Selling Propositions

There are several common types of USPs that businesses use to stand out:

1. Product-based: Focuses on the superior features, quality, or customization of the product itself

2. Benefit-based: Emphasizes the unique value the customer will gain from the product or service

3. Customer support: Highlights exceptional customer service, generous return policies, or personalized support

4. Positioning: Associates the brand with a specific lifestyle, identity, or set of values

5. Price: Promotes the best value, affordability, or unique pricing model

The most effective type of USP will depend on the company's strengths and target customer priorities. Many successful USPs incorporate elements of multiple types.

How to Develop a USP

Crafting a compelling unique selling proposition requires research and careful positioning. Key steps include:

1. List potential differentiators: Identify all the ways the product or brand is different from competitors. Be as specific as possible.

2. Research the competition: Analyze competitors' positioning to find gaps or opportunities to offer something unique.

3. Understand customer needs: Use surveys, interviews, and behavioral data to uncover what the target audience cares about most. 76% of consumers expect companies to understand their needs.

4. Combine differentiators and customer priorities: Look for overlap between the company's strengths and what matters to the target market. The best USPs sit at this intersection.

5. Refine the USP: Distill the key elements into a concise statement that can guide the brand. Keep it under 10 words if possible. Test variations with customers to optimize performance.

Examples of Effective USPs

Many of the world's top brands have iconic USPs that encapsulate their positioning:

• M&M's: "The milk chocolate melts in your mouth, not in your hand." Highlights a unique product feature that solves a common consumer frustration.

• FedEx: "When it absolutely, positively has to be there overnight." Promises reliable, fast delivery that customers can count on. FedEx delivers over 16 million packages per day.

• Dollar Shave Club: "A great shave for a few bucks a month." Emphasizes affordable pricing and a convenient subscription model. The company grew to over 3 million subscribers in just 5 years.

• Saddleback Leather: "They'll fight over it when you're dead." Suggests extremely high quality and durability that will last for generations.

• Avis: "We're number two. We try harder." Turns a potential weakness into a benefit, promising better service. Avis saw a 28% market share increase after introducing this slogan.

• Zappos: "Powered by service." Focuses the brand entirely on providing excellent customer support. 75% of Zappos purchases come from repeat customers.

Conclusion

A unique selling proposition is a powerful tool for setting a company apart in a crowded market. By identifying a brand's key differentiators and connecting them to customer needs, a USP provides a guiding light for all marketing efforts.

While developing a compelling USP takes work, the benefits are clear. Companies with a strong USP see higher revenue, greater customer loyalty, and a more focused brand identity. By following best practices and learning from top brands, any business can craft a USP to take them to the next level.