So let’s say you have an idea for a business and you are feeling pretty positive about it, what next?
The first thing you should do are analyze your idea and make sure it is sound. In this post we’ll look at identifying your Unique Selling Proposition (USP).
Previously we discussed framing an idea as a problem-solution couple. That “problem” then is essentially a need that your future customers wish to fulfill – be it finding a way to buy cheap books online, a need to watch videos to entertain themselves and so on.
Now consider that if there is no distinction between fulfilling their need with your business or another business then your idea needs work.
Think about the typical user or customer and ask yourself WHY would this person be using my business.
What are they trying to accomplish? Why do they not accomplish their task or fill their need in some other way?
Every business needs something that sets it apart. You must have a distinguishing feature that separates you from the competition.
Perhaps you target a specific niche’s needs, perhaps you have a service that no-one else has, perhaps you accomplish your task in a simpler or more efficient manner. In marketing people like to call this your Unique Selling Proposition or your USP.
Identifying Your USP
There *must* be some reason why a user or customer will use your service. The stronger the USP and larger the need for your service or product, the better your business idea is.
A USP is the reason why people will purchase from a business and use its services. It is the advantage that you have over your competitors and the reason given when someone recommends a product over others.
Some business ideas will have an inherent USP whilst others will need development.
Although there is often overlap and many ideas will employ a combination of USPs we can broadly classify the types of USPs as follows:
1. A Quality USP
This sort of USP is based around a higher quality of service or product than other businesses in the same field.
Examples of a Quality USP would include a web service that never goes down, a site that serves very fast downloads or a hosting company with really easy to understand help desk support.
2. A Product USP
A Product USP is something about your product or service that is unique. It is a feature or combination of features that are not available anywhere else and thus sets that product or service apart.
Examples of Product USPs might include an online bookseller that intelligently selects books for you based on your browsing behavior or a web mail service that provides high level encryption on all its communications.
3. A Service USP
A Service USP is when you sell a product which includes additional service. An example would be a software provider that includes access to a 24 hour help desk service with every item.
4. An Audience USP
An Audience USP is when a product or service is tailored to a particular audience that no one else attends to.
The product or service might provide information, a community of users or features that are specific to that market. An example of an Audience USP would be a MySpace type site targeted specifically to stay-at-home mums.
5. A Price USP
A Price USP simply means that your product or service is cheaper than competing services. Be careful when targeting this USP as if you are overly optimistic and later find you cannot compete on price for some reason you will experience problems.
An example of a Price USP would be a site selling discount software by passing on bulk discounts to the consumer or a domain registration service that is the same price as its competitors but throws in free hosting as well thereby creating an effective price difference.
6. A Brand USP
A Brand USP is when your product or service has an associated brand value that sets it apart.
For example Porsche and Toyota might make a car that has exactly the same specifications and might even look remarkably similar, however the Porsche will have a Brand USP that enables it to be sold at a premium. A Brand USP can be difficult to develop but very hard for a competitor to take away.
In reality almost all businesses employ a combination of USPs. For example a business might differentiate itself from the majority of the market by targeting a small niche audience, but then also distinguish itself from a similar business on price and quality of service.
Naturally the more positively distinguishing features your business has the more attractive it becomes to the user and ultimately the more likely they are to pay you for your product or service.