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How to determine your USP as a small or medium-sized business

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In a previous article, I explained why every business needs a Unique Selling Proposition, a USP.

  • Your USP gives your customer a reason to choose you.

  • It tells customers why they should buy from you instead of from your competitor.

  • If your USP clearly distinguishes your business from your competitor’s business, it will be easy for you to promote and sell your products or services.

  • A Unique Selling Proposition gives your business an identity that customers acknowledge and interact with.

So how can you determine your USP as a small business? Or as a medium-sized business? How do you find out what makes people want to buy from you instead of going to your competitor?

If you do a Google Search, you will find many different websites showing a variety of approaches. All these approaches can be broken down into 3 key ways.

1. Focus on the benefits for your customers

Remember, customers are not looking for a product (or service). They are looking for a solution to their problem or for a way to increase pleasure in their lives.

 This means that in your marketing and sales, you should focus should be on telling your customers how your products will benefit their lives.

This is one of the cheapest and easiest ways for a small and medium-sized business to determine their Unique Selling Proposition.

This means that you need to distinguish between features and benefits.

How to distinguish between features and benefits

Product features are all the things that define a product. Benefits are the reasons customers buy the product or service.

For example, if we look at a pair of high-end sneakers, the features might include:

  • high-quality leather upper
  • memory foam sole
  • moisture-wicking, breathable fabric

The benefits of this high-end sneaker might be:

  • high-quality leather -> will last you for many years and never stop looking good
  • memory foam sole -> adjusts itself to your feet, so no more sore feet
  • moisture-wicking, breathable fabric -> keeps your feet cool and ventilated, so no more smelly feet

Note that product benefits are also features. Benefits are those features that are most important to the customer. Product features will not change, but benefits may change according to the individual shopper or customer segment.

For example, you and I may be looking at the same sneaker. But I may mainly be interested in high-quality sneakers that will keep looking good for years and years. While your interest may be in buying high-quality sneakers that you can walk long distances in without getting sore feet.

I have noticed that business owners sometimes have a hard time understanding how to use benefits instead of features in their marketing.

Since focusing on benefits is one of the best ways for a small and medium-sized business to determine a Unique Selling Proposition that sets them apart from their competitors, let’s look at a few examples.

Examples of benefits of products and services

  • A car dealer starts selling a new car model. The main feature is a hybrid engine that includes both gasoline and electric power. The benefits to the customer are that this car will save them money – the hybrid engine makes it possible to travel more kilometres per gallon of gas. This means that the customer will be spending less money on fuel. The car also saves time – the customer can drive longer distances without having to stop for gas. They are selling financial savings, not a car.

  • A fish farm sells fish to various customers. The features are 3 types of fish, locally produced and organic feed, limited use of chemicals or antibiotics, always fresh. But in their marketing, the fish farm does not focus on the features. Instead, they emphasize the health benefits of eating fish: reduced blood pressure, lower rate of heart disease, and highly nutritious. The features are mentioned, but in such a way as to put more attention on the benefits. This business is selling health, not fish.

  • The products being sold by a carpet company can have many different features: rectangular, round, wool, polyester, red, blue, gold, made in Turkey etc. In their marketing, they distinguish themselves from other sellers by showing customers how to use the carpets to create attractively decorated rooms. Pictures of beautiful rooms are their Unique Selling Proposition because they are selling beauty, not carpets.

  • A consulting company offers services that have features like business coaching, training, customised products, and strategic advice. The methods that you use are the features. The benefits for the customer are not the consulting methods that you use, but rather the result of the consulting service that you provide. In my own case, with Guide My Growth, my services have the above-mentioned features. The benefits that I offer my customers are higher profits, faster business growth, and improved business performance. I am selling profitability and business growth, not consulting.

  • A building contractor offers home painting services. The company’s services are more expensive than most of their competitors because they use highly-trained master painters whereas most of the competitors work with day-labourers. In their marketing, the company focuses on the fact that by using master painters (a   feature of their service) they deliver high-end paint jobs that maintain their beauty longer and require less maintenance as compared to other contractors (the benefits of their service). They are selling quality and sound investment, not painting.

What does the word “Unique” mean in USP?

It is important to understand something about the use of the word “unique” when we are talking about a “Unique Selling Proposition”.

“Unique” does not mean your product has to be the only product available on the market. Or the only product that has a particular characteristic.

You make something unique by combining certain factors.

Even though your competitors might be selling the exact same product or service, it is the combination of factors that you choose that make your product or service unique for your customers.

This means that you can create a USP by being the only person who is talking about a certain characteristic of the product. Or, you can create a USP by finding a way to improve an existing product or service. Or, you can create a USP by finding a way to adapt a product to a very specific market.

2. Focus on a specific niche in your target market

A second way to determine your Unique Selling Proposition is by choosing a very specific market niche.

This niche could be a part of the market that is not being served well by other businesses.

You can find your niche by thinking about what your business knows how to do very well. Then, study your competitors, the businesses that are offering the same products or services that you are offering.

What differences do you see between them and your own business?

  • Do you have additional experience in a particular industry?
  • Do you have any specific certifications or qualifications?
  • Can you provide services to a specific demographic?
  • Do you have insider knowledge about a particular region?
  • Is there any way that you can add something – or focus on something – that will make you stand out?
  • Or, is there a way for you to specialise?

For example, there are many business development consultants running around fighting to get clients. But what if your consultancy was known as the go-to business development consultancy specialising in food & beverage retailers? Would you still be fighting everybody to get customers?

I think customers would be lining up to buy from you.

Note that even if you choose a specialisation, you can still grow your business by adding more products and services. But when you do so, it is important to always consider how they match with your Unique Selling Proposition.

3. Create a Unique Selling Proposition through branding

This strategy is very expensive.

This is not a strategy that most small businesses can do well.

To be successful in using this strategy, the business will need to launch a professionally-designed branding campaign.

The campaign will also need to be massive, because you are building your Unique Selling Proposition by making sure that everybody hears your name and associates your name with certain benefits. You will need a lot of money to be able to set up and run such a massive advertising campaign.

However, for small businesses, there is another way that you can try that is less expensive. You can work with celebrities or influencers by asking them to be a spokesperson for your business.

Usually, this is done on the basis of profit sharing. Meaning that you give a certain percentage of all the sales of a particular product to the spokesperson.

If you are selling multiple products, consider entering into an agreement with the influencer or celebrity about a specific product to test the impact and to avoid misunderstandings.

How to determine your own USP

Every business should have at least one USP.

To determine your own USP, start by asking yourself these 3 questions:

  • What is different about my product that delivers an important benefit to your customer?
  • Is there an industry, application, or niche I can specialize in?
  • Is there a way to brand my company or product in a unique fashion with appeal to consumers?

The objective of your Unique Selling Proposition should always be to remove pain or increase pleasure for your customers. It is a promise that you are making to your customers. Make sure that you can deliver.

I help small & medium businesses generate higher profits so that they don't have to waste time chasing funders for money

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