Unique Selling Proposition (USP): What it is, Types, Tips on How to Formulate It, and Real Examples

In order to stand out in the market among competitors, organizations need to understand their unique selling point and effectively formulate their unique value proposition.

In this article, we will explore the concept of USP, its advantages and disadvantages, types and principles. You will also learn how to skillfully craft a value proposition, and to reinforce the material, we will provide illustrative examples.

What is USP

• Uniqueness: There is no similar product available from other companies.

• Specificity: "The most stylish clothing" does not meet the criteria of a USP, but "Yoga apparel" is more specific.

• Relevance to customer needs: Your proposition should satisfy customers' desires. Excellent examples of unique selling propositions are the slogans of Snickers candy bars: "Don’t just take a break, take a Snicker." and Sprite carbonated beverages: "Obey your thirst!" Both propositions are memorable to customers and help them understand which needs are being satisfied: a sweet peanut bar satisfies hunger, while a carbonated drink refreshes in hot weather.

How USP differs from positioning, offer, and company slogan

Now let's clarify the differences between USP and other similar terms.

To better understand the distinction between USP and other definitions, let's examine positioning, unique selling proposition, and offer using the example of an online workout platform.

• Positioning – PWR zero equipment.

• USP – 25 minute workouts. Body weight only. Plus 15 minute optional express workouts.

• Offer – Free trial, then $19.99 on a monthly plan.

An example of positioning, USP, and offer

A slogan is often a short memorable phrase that grabs attention and reflects the essence of a company. Sometimes it incorporates USP criteria. Slogans may be absent in some organizations, primarily used by big brands, whereas USP should be present in any business regardless of its scale.

USP: pros & cons

Advantages of USP

• Market popularity: USP helps customers learn about a product or service from a positive perspective. This increases the likelihood that they will become your customers.

• Lack of competition: USP allows customers to evaluate a product not only based on its price but also its value. It's important to consider the benefits customers will receive, even if they pay more than for a similar product from another brand.

• Word-of-mouth advertising: When a large audience becomes aware of the uniqueness of your product, it increases your chances of attracting repeat customers. They can motivate their friends and acquaintances to make a purchase.

Disadvantages of USP

• High competition: In today's world, it's challenging to stand out in the market among numerous original brands. Many products in different niches already have demand due to their important and unique features.

• Misalignment with expectations: It's important to remember that your product claims should align with reality; otherwise, you may trigger a negative reaction from consumers. For example, if you notify a customer of home delivery within 30 minutes but fail to fulfill it due to certain reasons, it can lead to a disappointed customer and a tarnished reputation in the market.

Types of USP

1. Genuine. This category includes products that truly possess exceptional qualities and significantly differentiate themselves from competitors in the market. Let's consider a couple of examples.

2. False. This type of USP is created artificially. It is often used when there is high competition in the market.

Principles a USP to be built

1. Audience orientation: The USP is crafted based on the interests, values, and needs of the target audience. Failing to consider this criterion may lead consumers to choose a different brand.

2. Originality: The offered benefit should be distinctive and unique. It is crucial for your uniqueness to be genuine; otherwise, it may result in negative feedback.

3. Value: The USP should deliver tangible or intangible benefits to potential customers, providing them with either material or emotional advantages.

How to create a USP

To craft an effective USP, it's important to study your audience and identify what they are lacking. Let's break down how to do it step by step.

Stage 1: Gather information and analyze it

At this stage, find out what solution customers expect from your product. The following methods are suitable for gathering information:

• Interviews and surveys

Conduct online or in-person interviews with individuals from your target audience who have similar interests and goals. The more participants, the better.

• Social media monitoring

Explore relevant groups, communities, and read user comments, posts, and competitor news.

• Marketing analysis

You can opt for professional marketing agencies, purchase ready-made reports, or conduct your own analysis using the previous methods.

To study your customers, you don't necessarily have to spend financial resources; conducting interviews or surveys is sufficient. It's important to note the specificity of the questions: ask only what will be meaningful in the future. For example, inquire about what customers dislike the most about competitors' products. Avoid generic questions like, "Do you like our product?"

Your goal is to identify the problems or concerns that customers face when making a purchase. They may sound like these:

• "It's impossible to find the right size; I've been trying to find jeans that fit my figure, but it's nearly impossible."

• "The prices of healthy food products are too high."

• "I enjoy acrobatics, but I have doubts because I lack experience."

Stage 2: Creating a customer profile

After completing the previous step, proceed to create a detailed description of your typical customer. Try to gather as much information as possible about their interests, goals, and problems. Don't focus solely on general attributes like gender, age, location, etc.

• Individuals with specific body characteristics who struggle to find suitable clothing items.

• Young people (students, schoolchildren) who aim to eat healthily and maintain a healthy lifestyle.

• People who have an interest in acrobatics but have fears about starting from scratch or concerns about getting injured. They may think that practicing this sport is only possible from a young age.

Stage 3: Competitive analysis

Stage 4: Brainstorming

Generate several statements and test which ones work best. Formulate hypotheses on how to address consumer problems while standing out in the market. For example:

• "We will help you find the right size with a free consultation from our knowledgeable sales consultants who have an excellent understanding of our entire range and will find a suitable option for you. If your size is not available, it can be ordered."

• "In our healthy food store, there are daily promotions on a specific 'product of the day' where you can purchase it at a discounted price."

• "Free trial session with a professional trainer. Let's dispel myths and fears. It's never too late to start."

Stage 5: Hypothesis testing

Test your unique propositions on customers:

• Try running a couple of advertising campaigns and compare the results. This can be done on social media platforms without significant financial investment.

• Conduct interviews and find out from consumers if they are attracted to your propositions.

1. The company conducted a survey on social media, asking if students and schoolchildren would purchase products if there were daily promotions on a specific "product of the day."

2. Customers responded that this proposition does not satisfy them as they do not know which specific item will be on promotion.

3. The store came up with a new offer: discounted days with a 15% discount on all products for schoolchildren and students (e.g., Mondays and Fridays).

4. The survey indicated that this proposition was much more appealing to the target audience.

Tips for crafting a USP

The following ready-made formulations can help you in creating your unique proposition:

Here, a component that evokes fear in customers should be absent: without sugar, without GMO, without lactose, etc.

This formula works well and provides a certain guarantee to the customer. For example, "If you are not satisfied with the product, we will refund your money."

This benefit should be based on the needs of your target audience. For example, anti-dandruff shampoo or toothpaste for sensitive teeth.

This formula implies uniqueness in the product's properties. For example, "Florist course with subsequent job placement."

Mistakes in formulating a USP

• Lack of uniqueness in the offer. If an organization cannot offer a distinctive product, customers will not be interested in the offering. There are other companies that offer similar products, and customers may turn to them. Therefore, when formulating your unique selling proposition, it's important to study the properties of similar products and what competitors are offering.

• Using typical clichés. There are phrases that do not attract customers because they are used by many companies. For example, there are benefits that consumers do not perceive or notice because everyone is using them. Examples include "Best deals" or "Fast delivery." If an organization still uses these formulations, it's important to add additional characteristics and clarifications, such as "Fast delivery in 30 minutes, or we'll give you the order for free."

• Ignoring the target audience. Sometimes a USP emphasizes the product's merits but fails to consider the desires of consumers. For example, a USP like "An innovative washing machine that can quickly wash your clothes in just 15 minutes" has a rather generic formulation and doesn't take into account the specific interests of the audience. However, a USP like "Did your kids make a mess of their clothes? No problem! Our washing machine with a unique mode can wash clothes in just 15 minutes, helping you save time!" is directed towards parents who have limited time for household chores.

Real examples of UTP

ThirdLove

Arch Motorcycle

Canva

Patagonia

HubSpot

Patch

Zoom

Conclusion

To formulate a unique proposition, it is essential to identify the target audience and segment it accordingly. Then, analyze each segment to determine which product features address their problems. By highlighting the unique qualities of your product, you can craft a compelling USP. For those who find this process challenging, ready-made USP templates can be helpful.

• using fictional product characteristics

• relying on clichés like "best prices"

• ignoring the problems of the target audience. Your product should primarily help customers solve their problems and fulfill their needs.