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Lead Your Team Strategy

Unique Selling Proposition (USP): Definition, Examples & Templates

Unique Selling Proposition (USP): Definition, Examples & Templates
A Unique Selling Proposition helps a business tell customers how it will stand out among competitors. / Credit: Artgraphics | Shutterstock

Sometimes it is easier for business owners to develop new product ideas than to predict whether those ideas will fulfill customer needs. Fortunately, a tool exists to help entrepreneurs make good decisions. The unique selling proposition (USP) can help entrepreneurs determine if a new business or product is likely to find a market, before they commit funds to development.

First developed in the 1940s as a means of understanding successful marketing campaigns, today a USP can help a company decide if a potential new business, product or service is different from what is already available. If not, the USP helps determine whether there is any reason for a buyer to purchase the new product or to shop at the new business instead of continuing to use established competitors. Lack of a strong differentiating characteristic means the new business, product or service isn't likely to thrive. If there is a strong differentiator, however, the venture has a good chance of being successful.

It isn't good enough for business owners to know what sets them and their products or services apart from competitors, however. A business must also convey those reasons to consumers, so they understand why spending their money with the new service or business, instead of with an established product or brand, is a good decision. The USP ultimately becomes a key component of a business's marketing campaign.

Jonathan Raymond, director of marketing at business coaching service EMyth, adds that a USP can add value beyond product differentiation. "Whatever tool you use, the most important resource is you. It's about getting absolutely clear — which for most business owners is the first time they'll do this — on what really is the heart of their business. What really drives them? Who are they 'for'? What is the impact they want to have that's different than anyone else in their industry?" Raymond told Business News Daily.

Writing a USP

Though many USPs are only a few sentences long, that doesn't mean they should be created quickly. In an infographic on Webs.com, marketing consultant Perry Marshall lays out three essential questions all solid USPs should tackle, with examples of good answers for each:

  • Why should I do business with you instead of anyone else?
  • "We offer the nation's most affordable health-care coverage to businesses with 10 employees or fewer."
  • What can your product or service do for me that others can't?
  • "We sell the only pain-relief cream that will completely eliminate carpal tunnel symptoms in seven days."
  • What can you guarantee me that no one else can guarantee?
  • "We are the only car dealership in the tri-state area with a five-year, 50,000 mile warranty."

To determine what truly sets them apart, businesses should look at several key areas, including the service they offer, the market they cater to, the products or services they sell, their customer experience, and their pricing, Marshall advised.

"A USP is not merely a slogan — it is your company's DNA and reason for being," Marshall wrote. "If you cannot summarize exactly what sets you apart in one or two sentences, you are not unique enough within your marketplace."

To further help development of a USP, Entrepreneur.com recommends organizations do several things, including:

  • Put yourself in your customers' shoes: Step back from your daily operations and carefully scrutinize what your customers really want. The answer might be quality, convenience, reliability, friendliness, cleanliness, courtesy or customer service.
  • Know what motivates your customers' behavior and buying decisions: You need to know what drives and motivates customers. Go beyond the traditional customer demographics, such as age, gender, race, income and geographic location that most businesses collect to analyze their sales trends.
  • Uncover the real reasons customers buy your product instead of a competitor's: As your business grows, you'll be able to ask your best source of information —your customers. You will be surprised how honest people are when you ask how you can improve your service.

And beyond its value as a product-analysis tool, the USP can teach valuable lessons about your business and its potential, Raymond advises. "The best outcome is that you discover something new about your business that you didn't know before, that you challenged the assumptions of what you think is true about your customers and your business, and you got to [know] what's really true about them." Raymond said.

Examples of unique selling propositions

To better understand the concept, entrepreneurs should look for examples of the USP of businesses they know well. Wendy Connick of the National Association of Sales Professionals points to a few good examples:

  • Avis: "We're number two. We try harder."
  • FedEx Corporation: "When it absolutely, positively has to be there overnight."
  • M&Ms: "The milk chocolate melts in your mouth, not in your hand."
  • Dominos Pizza: "You get fresh, hot pizza delivered to your door in 30 minutes or less, or it's free."

Other well-known examples include:

  • NyQuil: "The nighttime, coughing, achy, sniffling, stuffy head, fever, so you can rest medicine"
  • Target: "Expect More. Pay Less."
  • Geico: "15 Minutes Could Save You 15 Percent or More on Car Insurance."
  • Enterprise: "Pick Enterprise. We'll Pick You Up."

While many of these USPs also serve as company slogans, Raymond cautions business owners not to make writing a slogan their primary purpose. "The worst mistake I see people make is to use their USP as a piece of marketing instead of what it's really there to be, which is an internal touchstone and rallying cry. It's the thing you want other people to feel come through in your marketing, not try to convince them of," Raymond said.

USP writing help

While business owners won't find traditional templates for writing a USP online, they will find many options that will help walk them through the process of defining their USPs. Sites to visit for help include:

This article was originally written by Chad Brooks and updated by Katherine Arline.