Why should I buy from your business compared to any of your competitors?
This is one of the most critical questions you need to answer if you run your own business.
But I am amazed at how many business owners aren’t clear and concise in their response.
The most common answer I get is, “Our quality and service.”
Now while that is commendable, it hardly inspires me with the compelling urge to rush out and buy what is being offered. After all, that is what everybody says. You can’t hope to stand out from the crowd by being so similar to your competitors.
You have to come up with something that describes your business or your offer in a way that makes you unique.
In other words, I can’t get what you offer from anyone else. Or you make your offer so bold that I would be crazy to risk going somewhere else for fear they can’t give me the added elements that your offer implies.
Unique Service versus Unique Value Proposition
The concept of a unique selling proposition, or USP, was first proposed in the 1940s by marketing researcher Rosser Reeves. These days, the term USP has been used to describe why one business has a competitive advantage over its competitors.
An even better concept, though, is the Unique Value Proposition (UVP) which explains the added value that can only be acquired from you.
A great, bold claim of unique value that you can back up with action can quickly establish you as the market leader. For example, the following slogans were the catalyst for these companies to gain superiority and market dominance:
Federal Express: When it has to be there absolutely, positively overnight.
Domino’s Pizza: Fresh, hot pizza delivered to your door within 30 minutes, or it’s free.
M&Ms: Melts in your mouth, not in your hand.
These examples indicate how a USP or UVP can be created and used effectively. Each of these slogans highlight a recognised industry problem that is solved by the particular product. For FedEx, the issue was reliable, overnight delivery of packages. For Domino’s, the generic industry problem was cold, unappetising pizza delivered long after it had been ordered. M&Ms solved the problem of chocolate-covered fingers.
To effectively create your own UVP, just look at the way your industry currently operates and see if you can identify a standard practice that creates an annoyance factor for customers.
Identifying an annoyance factor
These annoyance factors are often difficult to spot, because they are taken for granted by almost everybody in the industry.
For example, in the health care industry, a visit to a local GP is often set for a specific time, but most patients have to wait around long after the appointed time until the doctor is ready to see them. Very few doctors seem to worry about this poor service factor and take it for granted that customers will put up with it. After all, that’s just the way it is.
Go down the road to the next GP and you will find it’s just the same.
Well, what if an efficient, customer-focused doctor decided that appointments would be kept on time, and made a guarantee there would be no charge if more than three minutes late and they could achieve this without sacrificing the important medical service factors?
There would be a stampede of busy, time-constrained people to their door.
This business would not satisfy every patient in the market, but that’s not the point. Its UVP would be ‘on-time appointments’. It would quickly dominate the market niche of people who need to receive speedy, timely medical service.
This type of approach has worked in many situations. For example, One-Hour Photo Developing, 24-Hour Dry Cleaning, 60-Minute Courier service.
Developing a UVP is not about coming up with a totally unique product, although that would help. It is more about differentiation of a specific element of service which no one else offers to a significant market segment.
When you can achieve superiority in one element that is highly valued by that market segment, you can name your own price. If your UVP is crafted properly, you will dominate that market segment your offering targets, because they have a particular problem that only you have decided to solve.
How to Develop Your UVP
Conduct a survey to determine what customers are dissatisfied with in the way your industry serves them. These surveys can easily be done online these days at low cost.
When you have sufficient feedback, analyse the answers to your survey and see if a common factor emerges.
In most cases, this won’t be difficult to identify. You may find more than one. Then determine how you could do things differently to solve the problem. Finally, spread the word that you have a unique approach that means people with this problem will find your solution unbeatable.
You will soon find you have a path beaten to your door.
Greg Roworth is managing director of Business Flightpath, a business consultancy operating in New Zealand, specialising in business growth and strategic development. He is the author of the books Put Your Business on Autopilot and The 7 Keys to Unlock Your Business Profit Potential, which show how to develop a highly profitable business that runs on autopilot, freeing the business owner to enjoy the rewards the business provides.
Image by Lin Pernille ♥ Photography