What is USP and why does your marketing need one?

How can you differentiate yourself from your competition? Everyone has asked this question to themselves at least once, especially when offering products and/or services in a large market. The answer is simple and in the advertising world, it’s known as USP: Unique Selling Proposition. 

This simple concept is the key to making a difference between what you sell and how you sell it compared to your competition. 

Do you want to know how to make a unique selling proposition for your potential customers? Don't just stand there, read on:

What is a Unique Selling Proposition?

What do you think was the key to Netflix's success several years ago? Simple: having exclusive shows that could only be watched on their platform. 

What was the key to steam? To offer a platform where users could find exclusive titles, but also a community and library where they could have all their games.

These are two clear examples of what a unique selling proposition is, in two different market areas altogether. Not enough for you? Then let's look at a more concrete definition.

USP is short for unique selling proposition, which is a term used in marketing and sales psychology. It’s used to refer to the quality that makes a product and/or service stand out from its competition. 

Of course, it’s necessary to clarify that this does not apply exclusively to marketing, as similar cases have also been seen in art, games, politics and other areas. 

The truth is that this concept can be applied to almost any aspect in the world, since having a unique proposal that provides value will make the target audience look at you and, more importantly, choose you to meet their needs.

Why is it important to have a USP in marketing?

Imagine you are a lion looking for prey among a herd of zebras. You will look for those that have conditions that make it difficult for them to run away. In the same way you need to highlight your product and/or service, but with the purpose of standing out in the eyes of consumers.

Having a distinction, either to position, promote and/or sell products or services is key in the market. Now, considering that there’s saturation in almost all markets, this becomes even more important. 

Requirements for your product to have a USP

If you are interested in creating a USP for your product or service, there are 3 aspects that you cannot leave out:

• Focus on the target audience: every USP you develop must be oriented to a specific audience and their needs.

• Profitability: USPs should not be expensive in order to be profitable in the short and long term.

• Competitiveness: your USP needs to stand out from the competition in the market you are targeting.

Something they don't tell you in advertising school is that if the market you are targeting is not saturated with similar products, the Unique Selling Proposition concept works excellently from launch to growth, since it’s a unique offer and the advertising will always stand out.

Create your Unique Selling Proposition step by step

Now that you have the 3 necessary requirements to know how to identify a USP, why don't you set out to create your own? The truth is that this can be summarized in 4 simple steps: 

• Define your target audience: you must delimit your potential customer base in a concrete way. The ideal and what is recommended is a correct segmentation. It can be by characteristics, occupation, preferences, interests. All in order to identify and define the needs that your product will satisfy. 

• Identify the problems: put yourself in your potential customers’ shoes to understand the problem and to know more about their desires. It will help you have a better picture of how to meet their expectations.

• Define your differences in the offer: list your services, then choose those that best meet and satisfy each need of the target audience you defined before. Now, analyze your competitors' offerings. Based on this, you can add features that will help you stand out from your competitors.

• Define a sales promise: it should be simple and short.

The USP in today's marketing

The USP is part of almost any branding and/or marketing campaign for a product or service, after all, it’s used in many areas of the advertising world. 

However, the USP has a lifespan process that is a function of the product. It goes from its entry to its exit from the market. By knowing the stage your product or service is in, you can choose better advertising strategies to maximize profitability. We can identify 5 stages:

1.Market introduction

It begins when a product reaches the market and can be considered as concluded when it’s accepted by the target public. 

Its acceptance is reflected in the number of sales it obtains since its introduction up to a period set as a limit by the company and/or brand that introduced the product to the market.

Let's say you introduce a new action figure for children, but you set a time limit of 3 months to see its acceptance. Depending on the sales achieved, you will be able to see if it was accepted or not. This is when it reaches a point called "break-even". 

2.Growth and market expansion

The moment when the product is already generating profits and sales continue to increase is when we can talk about growth and expansion in the market you have attacked. 

If we continue with the previous example, we would have more parents buying the toy for their children.

However, you also have competitors entering the market with similar products, although there are exclusive cases, such as a patent, since competitors will not be able to offer a comparable product. 

This stage is considered completed when growth rates stagnate or decline.

3.Product maturation

This is a transition stage, as well as one of the most important to know whether or not to continue in the market that the company or brand has attacked. 

We are between growth and saturation, where it’s not possible to obtain new customers, so you must maintain your market share against your competitors.

How can you know that the market is saturated? If sales can no longer keep up with their previous growth. Let's go back to the previous example, the action figure is Max Steel, it maintains and continues with its market share, so it is profitable to continue with its production. 

It’s worth noting that you can lose your market share, making it unprofitable to keep up against competitors. 

That’s why it’s so important to know at what stage you are in order to know what advertising strategies to implement to stay in the market.

4.Saturation of supply for consumers

We are now approaching the end of our journey through the USP stages, where sales and, in turn, turnover stagnate. Many times, excess competition is created.

Here you can apply 2 methods, both viable. You can once again analyze your competition to see how to stand out or, decide to move to the next stage, which would be to withdraw from the market. The former can trigger success again and return the product to the first stage.

5.Decline in the market

The upward curve reverses direction, resulting in declining sales and profits. It may occur because of bad advertising decisions or because competitors strategized to take market share with more interesting offers for consumers.

Here companies and/or brands can either withdraw from the market or be prepared and innovate again, repeating the whole previous process.

6 Examples of practical USP

The USP of your product and/or service can be approached in different ways. Here are some examples.

• Time saving: offer a service that speeds up the waiting process for customers. Better response time means more efficiency. Successful cases of this type are fast food chains or express delivery services.

• Recipe: if they can't copy you, they can't take market share from you, an example? Coca Cola is proof that a secret recipe can guarantee success for a long time.

• Service: how can a service be a USP? Customer service is a clear example, because through a good service you can guarantee satisfaction as the success of your advertising strategy in the USP. An example can be Amazon with its online chat.

• Exclusivity: having exclusive services or offers of a product that everyone wants will always attract customers, how has Netflix or Steam kept up? Through their share of games, series and/or movies exclusive to their platform.

• Price: although it may sound obvious, having a more accessible price and the same quality as other companies is a simple but powerful formula for success in almost any market.

• Environmental impact: it’s increasingly common to see that consumers are concerned about the use of sustainable and environmentally friendly technologies. An example of this can be Hybrid Synergy Drive System from the Toyota vehicle brand.

Even a small company can stand out with a properly implemented USP, although with its limitations. It’s difficult to take market share away from large companies such as Coca Cola or Netflix.

However, they can compete in other ways, such as highlighting the way staff deal with their target consumers or customers, or even offering better flexibility in their products and/or services.

History and development of the practice of USP in marketing

Rosser Reeves, who is considered the father of the Unique Selling Proposition, introduced the term and practice to the marketing world in 1940. 

Since then, this practice, which significantly established that every product or service must have a value in contrast to the competition, has marked a before and after for those who decide to implement it.

In 1961 he published a book entitled Reality in Advertising, which is still considered a necessary text to understand and apply the USP in the marketing world. 

Although we recommend that you give the book a chance, one of the most important aspects that appears is the summary of 2 types of USP.

• Natural: those derived from a product, its properties or its production method.

• Artificial: all those that are attributed to the product by means of advertising, but which are also known as Unique Advertising Proposition (UAP).

Reeves developed the USP theory while working at the New York marketing and advertising agency Ted Bates & Co. His work consisted in elaborating the USP of each advertised product, thus giving rise to a concept of which he would be the founder.

As we told you before, this does not only apply to marketing and advertising, so Reeves also applied it to the U.S. presidential campaigns in 1952. That's how Dwight D. Eisenhower became the 34th president of the country.

Are you ready to develop your USP?

Now is when we have to congratulate you for making it to the end of the article. From here on out, it's time for you to start developing the USP of your product or service, but first, let's have a little chat.

Tell us, with all that we've told you, what do you think is the USP of that brand and/or company you use frequently? Whether it's a platform, a social network, a clothing brand, gaming, whatever you can imagine.

And, also, tell us, what would be the way you would implement the USP to stand out from the competition in the market you plan to attack. We'll read you in the comments.