Business, Startups, Strategy

Small Business Mistakes – Lack of Unique Selling Proposition

In case you’re keeping up, this is the fifth installment in my Small Business Mistakes series. If you’ve missed the other four, you can read the Introduction, Failure to Validate, Misunderstanding Your Target Market, and Having No Marketing Plan. Just follow the blog to keep up and read the rest of the series as I post.

Every day we read about the latest innovative company or industry disrupter in Silicon Valley. But the reality is that most small businesses are merely competing against very similar businesses, usually in an already-crowded market space. This means, as a small business owner, you must tackle a big problem right off the bat; how do you convince your target market to do business with you rather than your competitors? It doesn’t matter if you’re a manufacturer, distributor, retailer or service provider, if your business model does not set your business apart from the rest, in a way that provides value to your potential customers, you can’t hope to take your share of the market.


Photo by Andrew Wulf on Unsplash

Enter: The Unique Selling Proposition

First, let’s get the semantics out of the way. You’ll see the same or similar definition from many different sources using different terms; Unique Selling Proposition (USP), Unique Value Proposition (UVP), Market Differentiator, Value Positioning Statement, Elevator Pitch, and Elevator Speech are all basically versions of the same thing. The purpose of (whatever you want to call it – I’ll stick with USP) is two-fold; 1) to point out what makes your business different from your competitors, 2) in a way that matters to your target market. Only if you have both elements, will you succeed in differentiating your business and winning your share of the target market.


Photo by Alexandre Debiève on Unsplash

Second, let me be very clear about a very important point; if you Google “Unique Selling Proposition”, the majority of results will define this as a “statement” that describes a business’ differentiators, etc. That’s true – it is a statement. But understand this: a USP is not merely a statement or tagline to place front and center on your website. A USP must reflect reality and be integral to your business model and mission; it’s the “Why buy from them?” for your customers. In other words, you can make up the prettiest sounding USP in your entire market but if you can’t deliver, it’s no more than a marketing ploy. If you say it then it better be true or you won’t last very long.

How Do You Formulate a USP and What Does it Look Like?

You can find tons of articles and books on how to draft your USP. One extremely thorough article by Tor Grøndsund, written in 2011 (with a follow-up in 2013) reviews 10 different templates proposed by various authors and scholars. I strongly advise reading both articles and putting one of the featured templates to good use. You’ll need to be able to answer the same basic questions to formulate your USP, no matter what format you use:

  1.  Who is your target customer?
  2. What is their specific need your business fills?
  3. What is your product or service?
  4. How does it fill that target customer’s need?

For example, in his initial article, Mr. Grøndsund features Geoff Moore’s Value Positioning Statement template, which I find to be the easiest and most straightforward:

For ____________ (target customer) who ____________ (statement of the need or opportunity)

our (product/service name) is ____________ (product category) that __________ (statement of benefit).

A USP could then read like this:

For small business owners (target customer) who need occasional legal advice (statement of the need or opportunity) Concision’s Subscription Service (product/service name) is a flat-fee monthly subscription (product category) that makes it simple to ask business and legal questions at a fraction of the usual law firm price (statement of benefit).

Again, remember, if the business does not live up to the USP, you have a real problem.

General Mistakes Made Regarding USP

Small business owners will generally make one or more of the following mistakes regarding their USP:

  1. Fail to formulate a USP
  2. Fail to focus on issues that matter to the target market
  3. Focus on the same or similar issues as the competition
  4. Fail to effectively communicate the USP


Photo by Mark Rabe on Unsplash

MISTAKE #1 – Failing to Formulate a USP

Ask yourself why someone would do business with you rather than your competition?  What specific need do you fill (or pain do you alleviate) for your target market? Think about the reasons you started the business and why you thought people would be persuaded to do business with you. Did you think you could do it better, faster, nicer, etc. than the competition? You can’t expect to draw customers away from your competition unless you provide them with a reason that matters to them. This is especially true if it’s a bit of a pain for the customer to make that transition. Your USP must make it worthwhile for the customer to choose you over your competitors. What need does your business fill for your customers and what’s in it for them to do business with you?

If you didn’t plan your business model around a USP, it’s not too late and if you make it a focus now it could make an enormous impact on your current revenues. Think about it. Be creative. How could you make your product or service more valuable to your potential customer? “Valuable” can mean many different things: more convenient, fun, emotionally-fulfilling, better price, higher quality, etc. Examine the different facets of your product or service. Can you tweak something that could make a big difference to the customer? You probably don’t have to change your entire business model or make huge changes. Think small. In many businesses, it’s the small things that make a huge impact.


Photo by Clem Onojeghuo on Unsplash

Look at Warby Parker for example. WP is an online shop (they have a few physical locations as well) selling non-name-brand prescription eyeglasses at a significantly reduced price. But WP also features many other small differentiators that even if the price different were not so significant, could possibly make a big difference to their target market. I recently ordered my son a pair and it was a fabulous experience. I decided to order online because I have a teenager and it’s hard to get him to take time out of his busy social schedule to go to the store and look at glasses. WP was appealing for several reasons (all of which were readily apparent by looking at their website). First, it was convenient; they allow you to choose 5 pair online to be shipped to your home, free of charge, to try on. They include a return shipping label so all you have to do is drop them in the mailbox after you make your decision. Second, it was the price; almost every pair of glasses is a flat $95 and they pay shipping fees. Third, was selection; although they only carry their own brand of glasses (no Ray Bans, etc.) the look and style of the glasses are identical to the name brands.

Once I made the decision to shop with them, it was the process after the sale that influenced me to shop with them again: a) the box the samples came in was so nicely presented and organized, b) they direct you to a video after choosing your glasses, that instructs you how to measure your pupillary distance by taking a photo and texting it to them and c) your glasses arrive in a neat little box with a nice case inside with a personal message and their brochure. WP’s brochure states at the top that they were “founded with a rebellious spirit and a lofty objective: to offer designer eyewear at a revolutionary price, while leading the way for socially conscious businesses.” That’s pretty darn close to a USP. If WP were to use Geoff Moore’s template, the USP might look something like this: “For busy eyeglass wearers (target customer) who would like a convenient alternative for purchasing their glasses (statement of the need or opportunity) our online store (product/service name) offers mail-order eyeglasses in styles almost identical to designer brands (product category) that fit perfectly and cost less (statement of benefit).” But their USP isn’t a written statement front and center on their website, it comes through organically in each step of the process and in the business model (which better be the case whether your USP is in writing or not).

If you have not formulated a USP, get busy. You may already have one that your business incorporates daily but you just haven’t formulated it in writing. I’m not saying you need to splash your USP on everything but unless you write it down for your own benefit, you have nothing on which to focus your marketing efforts. Go through the template example above, think about what you already offer. If you truly offer nothing that differentiates you from the competition, you have a little work to do. What do you hear people complain about most regarding the competition? Know your competition well. Carefully research their website and/or physical locations as much as possible. Talk to their customers and find out where they excel and where they fall short. This should help you see any glaring shortcomings that you can use to your advantage. Their shortcomings should be where you put your best efforts. Implementing and communicating the USP to your target market will make a difference in your bottom line.

MISTAKE #2 – Failing to Focus on Issues That Really Matter to the Target Market

If you didn’t learn what your target market wants or needs during your research and validation process, you need to zero in on it immediately. If you focus on just trying to be “unique” without an emphasis on what matters most to the customer, you’ve missed the point. For example, you can dress your pizza delivery guys in pink tights and a tutu to distinguish them from the other delivery guys. But if your pizza sucks and your delivery is slow, all the uniqueness in the world won’t make up for it.


Photo by Baptiste C David on Unsplash

To understand what the customer wants, you must understand your target market intimately. Who is your target market? What are the demographics? Are they college students? Empty-nesters? What matters to one of these markets may not matter to the other. For example, delivering pizza 24/7 may be extremely important to college students but not so much to empty-nesters.  But the more mature group might value a more sophisticated pizza menu, tip included in the price or “early-bird specials”. Know your target market and speak directly to them. Deliver guys in pink tights may not even hurt as long as you get the rest right! Your job is to figure out what the customer wants or needs that they are not getting from the competition – then provide it to them. Set your business apart from the competition in a way that convinces the customer to do business with you rather than the competition. That’s it.

MISTAKE #3 – Focusing on the Same or Similar Issues as the Competition

Perhaps you haven’t noticed but I certainly have. There are several common elements I see small businesses “list” on their websites as differentiators but usually without taking the extra steps to make them an integral part of their business model or formulate a USP: a) price, b) convenience, c) service, d) selection, e) friendliness f) speed and e) experience. Anyone can say they have the friendliest staff or the best service, etc. but when everyone is focusing on the same adjectives, unless your business is the one that really backs up your claims, it means nothing. Again, take Warby Parker for example; they state their objective is to “offer designer eyewear at a revolutionary price…”. I paid $95 for my son’s WP glasses and paid no shipping. I’d say that’s pretty “revolutionary” when to replace the Ray Bans he lost would have been $475. So even though they focused on price as their primary differentiator (which could be the same for a few competitors), they can back it up big time.

Additionally, if your business and every other business in your category are going after the same target and touting the same “differentiators”; they aren’t differentiators! Remember the unique in USP. Providing unique value will always be superior to simply living up to your claims…what if everyone in your category is living up to their claims as well? Come on – put your creative thinking cap on! Fill a need in a way that really matters to your customer.


Photo by Luke Palmer on Unsplash

To illustrate, let’s look at an entire category of small business; tire stores. A quick Google search for “tire stores” led me to the following businesses. Although none of them really had a stated USP on their websites, each did focus on at least one “differentiator”:

Pep Boys – Selection of services

Discount Tire – Selection of products

Goodyear Tires – Price (price match, rebates, online discount)

Pro Tire – Shuttle Service

Not a lot of creativity or differentiation here other than Pro Tire. And instead of just using the word “convenient” at least they show a photo and describe how they are convenient. Their shuttle service really does differentiate them from the competition. But let’s try and put that in a template:

For tire buyers (target customer) who have somewhere else they need to be (statement of the need or opportunity) our automotive and tire service center (product/service name) provides a shuttle service for your convenience (not really a product category) that keeps you on schedule with the rest of your day (statement of benefit). Remember everything doesn’t have to fit perfectly into a template and many times it won’t.

Try this type of experiment in your own business category. Take a look at your biggest competitors. What is their USP? If they are not actually stating a USP, what differentiators are they focusing on? Do you focus on the same?

 MISTAKE #4 – Failing to Properly Communicate Your USP

Read the articles I referenced above. Study your target market, thoroughly evaluate your competition and their USPs, understand your product or service and how it provides a unique value to your customer. Play around with the different templates mentioned in the articles. Make an effort to differentiate your business and put it in writing in a way that can be communicated to your potential customers in a clear and articulate (if not eloquent) manner. Run your final USP by some objective folks – perhaps customers. Then work with your marketing team to put it in play throughout your marketing efforts. Shout it from the rooftops and make it so!


Photo by Clem Onojeghuo on Unsplash

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