What a Unique Selling Proposition Really Means & Why Your Business MUST Have One

If you’re interested in business and marketing, at some point you’ll learn about the need to have a unique selling proposition. The Entrepreneur.com encyclopedia defines a unique selling proposition as follows:

The factor or consideration presented by a seller as the reason that one product or service is different from and better than that of the competition.

 

But what does that mean? How will a unique selling proposition help your business?

The problem with book definitions is that they rarely help with understanding what a term like this means. You can read textbook definition after textbook definition and never truly understand the core meaning.

So what exactly is a unique selling proposition, and how will having one help your business to succeed?

The Real Definition of a Unique Selling Proposition

A unique selling proposition is what your business stands for. It’s what sets your business apart from others because of what your business makes a stand about. Instead of attempting to be known for everything, businesses with a unique selling proposition stand for something specific, and it becomes what you’re known for. Let me explain.

Many businesses make the mistake of attempting to stand for everything when they first get started. They want to do everything well, and they want to be all things to all people. They want to be known for having the highest quality products AND the lowest prices. They want to have the best food AND the cheapest prices. They want to be known for the best burgers AND the most delicious salads AND the juiciest steaks and ribs.

The problem is this:

When you attempt to be known for everything, you don’t become known for anything..

Let’s look at two hypothetical companies as an example.

Company number one offers web design, social media marketing, search engine optimization (SEO), copywriting, conversion optimization, PPC, and more. Company number two offers SEO and copywriting services, but they don’t offer web design, social media marketing, conversion optimization, etc.

Now let’s consider a customer – an experienced CEO who’s looking for an SEO copywriter who can write content for his website. He also knows about both companies.

When he considers company one, he thinks of them as a web design company, and he doesn’t even know they do SEO copywriting because they’re best known for their web design. When he thinks about company two, he thinks of them as an SEO copywriting company, since that’s their specialty.

When it comes time to choose a business to provide this service, which do you think he’ll choose? The one who’s known for web design generally, or the one who’s known for SEO copywriting specifically?

The answer is number two.

Now of course, there are always exceptions. A large digital marketing agency can become known for many services and can fulfill all of those services since they have many employees and multiple departments.

But if a smaller business wants to steal some market share from a larger competitor, they’re better off making a stand for something and becoming known for that thing rather than trying to do everything. Remember, if you want to stand out, i.e. if you want to “have a unique selling proposition,” your business needs to stand for something because that’s what you’ll become known for. It’s impossible to stand for everything.

Let’s look at a few more examples.

Basecamp

Basecamp is a project management software developed by 37 Signals, and it provides an excellent example of a successful unique selling proposition.

According to their website, Basecamp is used by millions of people as an “online project collaboration tool,” and it’s “the top choice of entrepreneurs, freelancers, small businesses, and groups inside big organizations.” If you pay close attention to the second statement, you’ll notice that it doesn’t say that Basecamp is the top choice for large organizations and multi-national corporations. Instead, it talks about being the top choice for freelancers and smaller organizations. This is done on purpose.

37 Signals made the decision to create Basecamp as on online project collaboration tool for smaller organizations. They realized that if they tried to appeal to everyone, i.e. smaller organizations AND multi-national corporations, then the product wouldn’t be awesome for anyone. The product would become too complicated for smaller organizations and would have the danger of being too simple for larger corporations.

basecamp unique selling proposition

For Basecamp their unique selling proposition becomes second nature. Their entire philosophy is about creating software the meets very minimal requirements and not feature-rich software aimed to please everyone.

Instead of compromising and making the product less effective by trying to appeal to everyone, 37 Signals took a stand to create a product for smaller organizations. Because of this, they’ve become the online project collaboration tool of choice for freelancers and smaller organizations. Instead of creating a product made for everyone but appealing to no one, they’ve become known for having the best tool on the market for a specific segment of the market.

Starbucks

Starbucks is another successful business that makes for a great case study on unique selling propositions. They went from a small coffee shop in Washington to one of the most recognized brands in America, and they transformed this country from a nation of Folgers drinkers to a nation of coffee connoisseurs.

How did they do it? You guessed it–they developed a unique selling proposition.

To become familiar with Starbucks’ unique selling proposition, you can ask this question: “What does Starbucks stand for, and what is it that they’re known for?” The answer is simple: They stand for premium coffee beverages, and they’re known for the same.

They don’t stand for premium coffee beverages AND the lowest prices. If they did, they wouldn’t stand out from corner gas stations. Because they take a stand to provide premium coffee, they stand out from the corner gas stations that sell cups of coffee for $0.99. If they instead tried to compete head to head with gas stations on price, quality would suffer, and their product wouldn’t be unique. They wouldn’t be able to stand for premium coffee.

They also don’t stand for premium coffee AND gourmet breakfast sandwiches AND the most amazing smoothies AND the best prices. Yes, they’ve offered those products in different forms for different periods of time, but that’s not what they stand for. They’re not trying to be known as the amazing coffee, sandwich, AND smoothie place, and they’re not trying to compete head to head with McDonalds or Jamba Juice. Instead, they’re the convenient premium coffee cafe that happens to also sell breakfast sandwiches and smoothies if you want one while you’re picking up your delicious coffee.

food on display

Don’t be fooled! Although Starbucks does offer items other than coffee drinks, what they are uniquely known for is making high-quality coffee beverages.

If they tried to be known for everything, there wouldn’t be anything to make Starbucks unique. Taking a stand as the premium coffee company makes sure they’re unique and that they’re known for something.

Zappos

Zappos is another company with an excellent unique selling proposition. They’re known as the most convenient, customer-friendly online store for buying shoes. They’ve attained this position by offering free shipping and free return shipping. The result is that people order multiple shoes at a time and return the ones they don’t want. Sometimes this works in Zappos favor when customers keep the extra pairs, but other times it cuts into their margin and lowers profits.

Regardless, Zappos is known as the most convenient, customer-friendly online store for purchasing shoes. But they aren’t known as the most convenient store for purchasing shoes AND the lowest prices. It would be impossible to do both. If they offered the lowest prices, there’s no way they could offer free shipping and return shipping on multiple pairs of shoes for each customer.

Zappos has a unique selling proposition that is quite simple: have the best return policy ever. A return policy that removes the fear of buying online and buying shoes that might not fit.

Not only would this be impossible and force them into bankruptcy, but they also wouldn’t stand out from the competition. Since many online stores compete on price, only offering the lowest prices wouldn’t make Zappos stand out for any reason. By offering the most customer-friendly shipping policies and being known for the best customer service in their industry, Zappos stands out from the crowd by making a stand for the best customer service and free shipping, and they’re able to sell shoes at a higher price due to the fact that they stand out from the competition.

What Will Your Business Stand For?

In order to have a unique selling proposition, you can’t attempt to be known for everything. You have to make a stand for something. You have to choose what your business will stand for and what you’ll be known for. By making a stand and choosing something that makes your business unique, you’ll become known for that unique quality and stand out from the crowd.

So what will your business make a stand for? What will you be known for? Or what makes your current business unique? Please share in the comments.

About the Author: Joseph is a freelance copywriter from  Orange County, CA who writes compelling content for businesses looking  to increase traffic, leads, and sales. You can follow him on Twitter @JosephPutnam to keep up with his latest marketing and writing advice.

  1. This is dead on!

    It’s so hard for companies (or professionals trying to climb the ladder) to hone in on their voice and what sets them apart. All driven by fear that they’ll miss out on some piece of business with “the big guys.” The lie here is that a specific, unique voice & offering is exactly what grows their business and positions them for “the big guys” to notice.

  2. Great case study examples. I really like that you pointed out that you’re not precluded from selling diverse products just because you have a precise selling proposition.

    It’s true that many new businesses just leap in without really thinking through their USP before they get started. I think that’s partly because it’s so much easier to start a business online with very little funds. However, thinking through the points you made about “what makes us different” and “why should people buy from us” will save so much more time in the long run. Also, being able to state that USP and the value you offer in just a few words is key – and oh so difficult!

  3. essential article for startups (too much repetitive words used though.)

    unique selling proposition is applicable for single product / service level along with organizational level.

  4. Great advice! Worthy of some consideration and application.

    Thanks again.

  5. An ad mentor of mine used to say when you turn some people off, you turn some people on.

  6. My wife recently launched a new site and service where she does the hunting of the best possible web design prices and quotes for people and it looks like its hitting the spot.

  7. This helps us, thank you!

  8. Great article! Pushes me to stay focused on our core!

  9. I don’t know about Starbucks in the USA but in the UK they are known for mass produced poor quality coffee served too hot in oversized childproof mugs by underpaid students who don’t give a monkey about where the coffee comes from or the difference between a latte and a cappuccino. The McDonalds of coffee. I guess my assessment still counts as a selling point but unique. I guess so if we discount their rivals of exactly the same nature Cafe Nero & Costa Coffee.

    As for basecamp. I’m a user and like it. But unique? There’s masses of online project management tools that are aimed at anyone other than large corporates. In part because they are following 37signals business model.

    In actual fact their description of, “the top choice of entrepreneurs, freelancers, small businesses, and groups inside big organizations” is inclusive of so many I’d say it’s not a unique proposition.

    If they had said, “the top choice for freelancers”. Then yeah, I’d be agreeing with you.

    I tend to think a company with a unique selling proposition should be able to start their strap line with the very powerful, “the only”.

    Have a look at http://www.nest.com “meet the only thermostat that improves with time”

    Sorry for being argumentative, but Starbucks, “premium” yuk.

    • I disagree with your comment on a unique selling proposition as being “the only.” There are so many businesses with so many models that it’s nearly impossible to be 100% unique. If you are, then there’s a good chance that there’s not much demand for the product because nobody is competing in the space.

      I think you missed some of the main points in the article, but good luck anyway on your business.

  10. Great post. Thanks.

    You can’t please everyone, no matter what business you are in. It makes much more sense to finely tune your focus on the appropriate target market when stating what you stand for.

    I agree with Gary on Basecamp’s audience being a little too inclusive. However, being “the only” in today’s brand saturated world is quite a difficult task.

    • Hi Robert, your first sentence hits on one of the main points–if you want to be successful and stand out for something, you can’t please everyone.

      Thanks for the comment.

  11. Awesome content, thank you

  12. Great article! Thanks for the comparisons they are really helpful.

  13. Jitesh Navlani Mar 04, 2012 at 12:33 am

    Its really very interesting article and helps in understanding the real meaning of USP.The examples which are taken are relevant to the topic which are quire amazing and helpful.

  14. Good post.
    Many a times, the perception of your audience is quite different from what you are trying to project. So in defining your unique proposition, you should spend time in understanding why people have reached out to you / bought from you in the first place.
    You touched upon this in your hypothetical example. Provider 1 may have tried to build their USP as a one-stop-shop, however, the perception of the CEO was that they are Web Designing firm.
    As many other comments have mentioned above, when one sets about defining their uniqueness, they will definitely be moving away from other addressable markets. And that should be a conscious decision.

  15. A good reminder to us all but a difficult trick to keep to!

  16. just thinking ,
    can number 1 in service be Unique Selling Proposition ?

  17. Gerben van Ouwendorp Feb 27, 2013 at 8:12 am

    I think the USP is getting little bit ‘classic’.
    It is from the sellers point of view. What about the UBR, Unique Buying Reason, it’s more from a buyers perspective.?

  18. Thank you very much:)) very informative! used case studies in exam :))

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