What a Unique Selling Proposition Really Means & Why Your Business MUST Have One

If you are interested in business and marketing, at some point you will learn the importance of a unique selling proposition. Entrepreneur.com’s encyclopedia defines a USP as follows:

The factor or consideration that a seller cites as the reason that a product or service is different from the competition and is better.

But what does that mean? How does a unique selling point help your company?

The problem with book definitions is that they rarely help you understand what such a term means. You can read textbook definitions after textbook definitions and never really understand the core meaning.

What exactly is a USP and how does it help your company to be successful?

The true definition of a unique selling proposition

A USP is what your company stands for. It is what sets your company apart because your company stands for it. Instead of trying to be known for everything, companies with a unique selling proposition stand for something in particular and it becomes what they are known for. Let me explain.

Many companies make the mistake of standing up for everything the first time they start. They want to do everything well and they want to be everything for all people. They want to be known for having the highest quality products AND the lowest prices possible. They want the best food and the cheapest prices. They want to be known for the best burgers AND the tastiest salads AND the juiciest steaks and ribs.

The problem is this:

If you try to be known for everything, you will not be known for anything.

As an example, let’s look at two hypothetical companies.

Number one company offers web design, social media marketing, search engine optimization (SEO), copywriting, conversion optimization, PPC and more. Company number two offers SEO and copywriting services but does not offer web design, social media marketing, conversion optimization, etc.

Now let’s look at a client – a seasoned CEO who is looking for an SEO copywriter who can write content for their website. He also knows both companies.

When he looks at company one, he thinks of them as a web design company and he doesn’t even know they do SEO copywriting because they are best known for their web design. When he thinks of company two, he thinks of them as SEO copywriters as this is their specialty.

When it comes to choosing a company for this service, which one do you think they will choose? The one who is generally known for web design or the one who is specifically known for SEO copywriting?

The answer is number two.

Now of course there are always exceptions. A large digital marketing agency can be known for and perform all of these services for many services because it has many employees and multiple departments.

But when a smaller company wants to steal market share from a bigger competitor, it’s better to stand up for something and get known for that thing than to try to do everything. Remember, if you want to get noticed, ie if you want to have a “unique selling proposition”, your company has to stand for something, because that is what you will become known for. It is impossible to stand for everything.

Let’s look at a few more examples.

Unique selling point of Basecamp

Basecamp is a project management software developed by 37Signals that is an excellent example of a successful USP.

According to their website, Basecamp is used by millions of people as an “online project collaboration tool” and is “the first choice for entrepreneurs, freelancers, small businesses and groups in large organizations”. If you pay close attention to the second statement, you will find that Basecamp is not the first choice for large organizations and multinational companies. Instead, it’s about being the first choice for freelancers and smaller organizations. This is done on purpose.

37 Signals chose to set up Basecamp as an online project collaboration tool for smaller organizations. They realized that the product would not be fantastic for anyone if they tried to appeal to everyone ie smaller organizations AND multinational companies. The product would become too complicated for smaller companies and too simple for larger companies.

Unique selling point of basecamp

For Basecamp, their unique selling point becomes second nature. Their entire philosophy is to create software that has minimal requirements, not feature-rich software that is meant to please everyone.

Instead of compromising the product and making it less effective by trying to appeal to everyone, 37 Signals took a stand to develop a product for smaller businesses. Because of this, they are the preferred online project collaboration tool for freelancers and smaller organizations. Instead of creating a product that is made for everyone but doesn’t appeal to anyone, they are known for having the best tool on the market for a specific market segment.

Starbucks USP

Starbucks is another successful company that has a great unique selling proposition case study. They went from a little coffee shop in Washington to one of the most famous brands in America, transforming that country from a nation of Folgers drinkers into a nation of coffee connoisseurs.

How did you do that? You guessed it – you have developed a USP.

To familiarize yourself with Starbucks’ USP, ask, “What does Starbucks stand for and what are they known for?” The answer is simple: they are and are known for premium coffee beverages.

They don’t represent premium coffee drinks AND the lowest prices. If they did that, they wouldn’t stand out from corner gas stations. Because they advocate premium coffee, they stand out from the corner gas stations that sell cups of coffee for $ 0.99. If instead they tried to compete with gas stations on price, the quality would suffer and their product would not be unique. You wouldn’t be able to stand for premium coffee.

Nor do they stand for premium coffee and gourmet breakfast rolls and the best smoothies and the best prices. Yes, they have offered these products in different forms for different periods of time, but that’s not what they represent.

They are not trying to be known as the amazing place for coffee, sandwich AND smoothie, and they are not trying to compete with McDonald’s or Jamba Juice. Instead, they’re the handy premium coffee café that also sells breakfast rolls and smoothies if you want one while you pick up your delicious coffee.

Food on display

Do not be fooled! Although Starbucks offers products other than coffee beverages, they are uniquely known for making high quality coffee beverages.

If they tried to be known for everything, there would be nothing that could make Starbucks unique. When taking a stand as a premium coffee company make sure they are unique and known for something.

Zappo’s unique selling point

Zappos is another company with an excellent USP. They are considered to be the most convenient and customer-friendly online shop for buying shoes. They achieved this position by offering free shipping and free returns. The result is that people are ordering multiple shoes at the same time and returning the ones they don’t want. Sometimes this works in Zappos’s favor with customers keeping the extra pairs, but sometimes it lowers their margin and lowers profits.

Regardless, Zappos is known as the most convenient and customer-friendly online shop for buying shoes. But they are not known as the most convenient store for buying shoes AND the lowest prices. Both would be impossible. If they are offering the lowest prices, there is no way they can offer free shipping and returns on multiple pairs of shoes for every customer.

Zappos has a unique selling proposition that is very simple: the best return policy ever. A return policy that eliminates the fear of buying online and buying shoes that might not fit.

Not only would this be impossible and force them into bankruptcy, but it would also not set them apart from the competition. With so many online stores competing for price, Zappos would for no reason distinguish themselves from only offering the lowest prices. Zappos has the most customer-friendly shipping policies and is known for the best customer service in its industry. It stands out from the crowd by promoting the best customer service and free shipping, and being able to sell shoes at a lower price due to the fact that they stand out from the competition.

FAQs on unique selling points

How does a unique selling point benefit my company?

By helping your company stand out from the competition. In other words, it offers something different from what your competitors are offering.

How do I find my unique selling proposition?

Think about the qualities, values, and attributes of your company that are different from other similar companies. Is there any aspect of your business that is different from what others are offering? How are you “better” than the competition?

How do I find my unique selling proposition?

Ask! Ask your customers, employees, leadership teams, and sales teams what they think of when they think about what makes your company so special.

What does your company stand for?

In order to have a unique selling proposition, one cannot try to be known for everything. You have to stand up for something. You have to decide what your company should stand for and what you are known for. When you assert yourself and choose something that makes your business unique, you will become known for that unique quality and stand out from the crowd.

What will your company stand for? What will you be known for Or what makes your current business unique? Please share in the comments.

About the Author: Joe Putnam is the founder of ConversionEngine, an agency that combines CRO with PPC to help businesses run profitable paid advertising campaigns. He’s helped companies increase SEO traffic by 10x, cut their cost per acquisition in half, and increase leads from AdWords by 20x. Visit now to learn more.

Consultation with Neil Patel

See How my agency can drive Firmly Traffic volumes on your website

  • SEO – Unlock tons of SEO traffic. See real results.
  • Content Marketing – Our team creates epic content that is shared, links accessed and visitors drawn.
  • Paid media – effective paid strategies with a clear ROI.

Book a call

Comments are closed.