The value of a Unique Selling Proposition, or USP, to a small business entrepreneur doesn’t become clear until after many are entrepreneurs are already in business.
The value didn’t become apparent to me until well into developing my second business. My second business was in a much larger niche (helping small business owners make more money) than my first business and I quickly realized the absolute necessity of appealing to a narrowly focused group of people.
That might sound ridiculous if your are a new entrepreneur. The knee-jerk reaction is to want to attract as many potential customers as possible. But I’ll sprinkle this article with many examples of how that will head you down the path of lower profits, more competition, and a greater chance of failure. Hopefully before we are through here at least one of these examples hits home. You know… convinces you to come to the dark side. The unique side.
Let’s begin with an obvious example.
If you purchased a McDonald’s franchise, would you build your new McDonald’s right across the street from an existing McDonald’s?
Probably not a good business move right? There is no compelling reason for a person to choose one store over another if they both sell the same thing…
…Unless It’s Price Driven!
And that is the kiss of death if you are a small business owner! Selling a product or service whose only differentiating quality is PRICE will lead you into bankruptcy faster than an Olympic skier on an icy course! (It’s a Winter Olympic year so I had to use it…)
Both McDonald’s restaurants offer the same food, the same experience, the same everything. The only compelling reason to choose one over the other would be price!
But building a Subway franchise right across the street from a McDonald’s would probably do pretty well. Actually… they DO do pretty well.
Why you might ask?
They are both in the fast food niche… right? On the surface you might think they would cannibalize each others sales by both being in the same overall fast food niche. Not so. And here’s why…
Subway appeals to a different niche of buyers than McDonald’s even though they both sell “Fast Food”. Subway appeals to the health conscious fast food customer and McDonald’s appeals to fast food customers on a budget that want a consistent meal fast. Both can co-exist and be profitable because they specialize in their deeper sub-niches (no pun intended). McDonald’s doesn’t sell sub sandwiches and Subway doesn’t sell burgers and fries. Each could try to expand their customer based by offering what the other specializes in… but they would run the risk of trying to mean everything to everyone and wind up meaning nothing to anyone.
Each business has specialized and thus each are wildly successful franchises.
OK…. maybe fast food isn’t your thing.
How about music?
There have been plenty of mildly successful music artists throughout the years, we won’t use them as an example here even though most of this still applies to them. For this example lets look at the mega bands or artists in music.
Elvis, The Beatles, Michael Jackson, Madonna, Garth Brooks, Liberace, ACDC, Van Halen, Aerosmith, Frank Sinatra, and many others. They all had their own niche. No two sounded alike.
And if you dig even deeper into the rock and metal genre… bands like Kiss, Nirvana, Metallica, Motorhead, Alice Cooper, and Pearl Jam carved out even smaller sub-niches within the larger overall niche with their unique sound, look, and performances. The more the fickle “flavor of the day” mainstream music scene hated these artists the more their loyal group of followers worshiped and supported them with their pocket books. These artists found that being unique was very profitable.
It PAYS to have a small group of loyal fans (buyers) who love the products or services you provide instead of a larger group who could care less about you.
Speaking of hate… who are the two of the most popular… yet despised radio talk show hosts to ever don a microphone?
Rush Limbaugh and Howard Stern.
But who has two of the most fanatic followings in radio… you guess it, Rush and Howard.
They aren’t trying to appeal to everyone. As a mater of fact, the more they piss off the 80% of people the more the fanatic 20% love them and will buy just about anything they recommend.
How well do you think Howard Stern would have done trying to mimic what Rush Limbaugh was doing? Not very well. Better to be unique than to copy.
How about dentists. If you need braces are you going to your general dentist? Most likely you are going to an Orthodontist. He/she is the one who specializes in braces, not the general dentist. And which one do you think makes the most money? The Orthodontist by far!
Still not convinced? Say your car needs a new muffler and you are Googling muffler repair. You find three general car repair shops and one that specializes in only mufflers. Who ya gonna call? The one who specializes in mufflers most likely.
Or say your kitchen sink started to leak. Are you going to call a handyman or a plumber? A plumber of course. You might even find a plumber that specializes in only kitchen sink repair. All the better!
The more you can specialize the better you will be at what you do and the more money you will make.
People pay for specialization, not to mention it also reduces your competition. That is what a finding your USP is all about.
What do you do that is different than anyone else and better than anyone else?
Creating a sub-niche inside a larger niche looks something like this:
Say you sell clothes… maybe you could sell only women’s clothing… or really niche it down and sell to only women who are tall and full figured.
If you sell music… maybe you could sell only 1960’s to 1980 music… or just hard to find live recordings from that era. Do you think you could charge a premium for those recordings??? Hell Yeah!
Say you sell sporting goods… maybe niche it down to only golf clubs… or only golf clubs for left handed golfers (I’m one and would pay a premium to find everything left handed at one easy to shop website or store!).
Finding your Unique Selling Proposition is vitally important for your business. It will get you laser focused on a specific niche, clearly define your perfect customer, increase the perceived value of your product or service, reduce or eliminate your competition, and enable you to create marketing material that speaks directly to that specific market!
Some of the best ways to find your USP is by combining two things that work in two separate niches.
A perfect example of this is Subway.
Subway took what was working in the fast food niche and combined it with what was working in the weight loss niche. Think about it for a minute. All subways commercials feature athletes or people who have lost a considerable amount of weight (Jared Fogel) while eating “healthy” fast food.
By combining the two, Subway in effect eliminated their competition. They basically have no direct competitors in their market because they created an entirely new market. No one to push down their margins or make them react in a defensive manner in any way. They are clearly number one in their niche and carry all the clout that goes with it.
A well thought out Unique Selling Proposition (USP) can give your business all these advantages too! All the advantages that are much better to have at the beginning of your journey rather than at the middle or end.
This is just a small portion of what I cover in depth in Small Business Marketing Basics home study course.
Originally published on: Small Business Marketing Revolution
Follow Gregg Zban on Twitter: www.Twitter.com/GreggZban