What is a USP and how can one benefit your business

Without a unique selling point (USP), making your start-up stand out in a crowded market could be difficult.

To give your start-up the best chance of succeeding in a competitive market, you could identify and focus on what makes your business different.

But many businesses are the same, and their products and services may not be as unique as they appear, so how do you stop yours from being lost in the crowd?

One way to do that is to have a unique selling point – a differentiator that allows customers to clearly understand how your business differs from competitors.

But what is a USP – and how can defining your USP help your business?

What is a USP?

USP stands for unique selling point, although it is sometimes referred to as a unique selling proposition.

A clear USP can help your business stand out from the competition, as it allows customers to see a clear point of difference and can be a vital part of marketing your business, giving customers a reason to buy.

Your unique selling point isn’t just limited to a specific product feature or unique service offering – it can be applied throughout your entire organisation, such as customer service, pricing, materials, and manufacturing processes.

For example, a local restaurant business that only uses locally sourced ingredients would have a USP against other local chain restaurants and might attract local customers looking for a sustainable dining option.

Why does having a USP matter?

A strong USP can be a valuable marketing tool to help your products or services gain customers ahead of the competition.

With a USP, you can define your products or services’ place in the marketplace, showcasing the specific benefit you can offer customers with your products or services that your competitors can’t.

Other benefits include:

• brand messaging – a clear USP helps clarify your brand, potentially allowing for more effective marketing messages
• business strategy – your USP can help guide product development, marketing strategies, and how you provide customer services to support your USP
• pricing strategy – a clear USP can help set pricing and to be able to communicate the reasons behind your pricing to customers
• investments – investors value a clear USP as it helps foster confidence in your market positioning
• customer retention – a USP can play a role in building customer retention and advocacy, with customers sharing your business and returning as repeat customers.

Examples of unique selling points

Some of the biggest brands have well-defined USPs – and many started as smaller businesses with a clearly defined USP that helped them differentiate themselves in their market.

• Zoom – Zoom became synonymous with virtual meetings due to its ease of use, reliability, and free basic plan, distinguishing itself in a crowded market of video conferencing tools, especially during the growth in remote working during COVID-19
• IKEA – IKEA’s USP offers stylish, functional, and affordable furniture, a unique in-store experience, and a unique self-assembly model that reduces customer costs.
• Airbnb – Airbnb’s USP is offering unique, local accommodation and experiences that traditional hotels can’t provide, often for far less cost than a hotel room
• Lush Cosmetics – Lush’s commitment to fresh, handmade, and ethical cosmetics is a clear USP – supported by a stance on no animal testing and the use of organic ingredients, which appeals to ethically conscious shoppers
• Poundland – It has a clear price-driven USP where customers can expect the majority of its products on sale to cost £1.

How to develop your USP

There are many areas where your start-up could offer a unique selling point or proposition – from pricing and product features to customer service and innovation.

• Pricing – competitive pricing, such as pricing that is lower than competitors or new models such as subscriptions, can be a strong USP and include strategies such as price matching, bulk discounts, and loyalty program benefits
• Product or service features – this could be a unique design, additional capabilities, or customisation options for products or services
• Customer service – exceptional customer service, including personalised support, easy and no-cost returns, extended service hours, or dedicated account management, can be a major differentiator
• Speed or convenience – offering faster or more convenient services than competitors, such as quicker delivery times, easy-to-use interfaces, or mobile accessibility, can be a valuable USP
• Sustainability – depending on your target market, using eco-friendly materials, adopting green practices, or contributing to environmental causes can set your business apart from less sustainable operations.

How to develop your USP as a start-up

Start-ups can be well-placed to clearly define their USP – a unique proposition is often one of the reasons why a start-up business launches in the first place.

To define your start-up’s USP, consider looking at your business from your customer’s perspective.

You may want to conduct business research into what your customers prioritise when they shop for similar products and services to find out what is most important to them and what influences their purchases.

With this research, you could answer questions such as:

• are they prioritising faster delivery?
• how much are they willing to pay for a product or service?
• what materials or ingredients are they focusing on?
• what are customers complaining about when reviewing competitors?
• can products or services be redeveloped for a different target market, such as older consumers?

How to communicate your USP

Clearly and effectively communicating your business’s USP to your customers can be an effective way to attract and retain them.

Consider how you can communicate your USP in marketing materials, such as social media posts and marketing emails.

For example, you could promote unique product features or include client testimonials and reviews showcasing your unique customer service experiences.

Read our guide on how to market your start-up on a small budget.