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May 24
2011

Creating a Unique Selling Proposition

Posted by: Steve Marr

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A transcript of a teaching by Steve Marr

Why is a unique selling proposition important?

Well, one reason I find out is pretty critical is about half the businesses or more, when I ask them what their unique selling proposition or what their competitive advantage - what is it you do well that other people can't do well or can't do at all, they can't answer that question. In ministry, I call this the unique ministry proposition. This unique proposition is absolutely critical because if you don't know it or you're not aware of it or if you're not using it, that can be one of the absolute fundamental reasons why you've got a problem in your business today or why you're not hitting on every cylinder.

Why should you promote your unique proposition to customers?

Well, for one, you want to be able to target those customers that want what you have, that want your unique proposition. But, for the other customers that maybe are not so keen on that, targeting them is not going to use your time, effort and money terribly well. You want to develop and understand using this proposition. It's one of the most important things that you do. And it's one of the most important things you can do as a business leader after making a decision to follow Christ as Lord and Savior.

If you already have a unique proposition, you need to truly understand what it is and target that to customers every single day. If you don't have one, I believe you need to develop it now because time is not your friend. Every single day that you don't take that step you're losing ground in the marketplace, and it's pretty serious.

So, when you look at it, who are your USP customers?

If you look through the phonebook or newspaper ads or any online listings, you will see a lot of competition. That tells us that customers have a choice every day as to where and how they'll spend their money. A key question you should ask yourself is this: why should customers spend money with me? What am I offering, what is the business offering that is unique and different from others, so they'll want to spend money in our business instead of someplace else?

And the answer to that question is your unique sales proposition.

I'll give you an example that the Lord gave us: “for there is no other name under heaven that has been given among men by which we must be saved”(Acts 4:12). Christ is the only name. Hundreds of religions compete for attention, but Christ is uniquely the only answer. And the Lord spoke about a pearl merchant who, upon finding one pearl of great value, went out and sold all he had and he bought it. A clear understanding of our proposition is going to give us the clarity to distinguish our business from our competition.

There are some things that an effective unique proposition must do. First, it's got to be something that you can do. For example, I know a fellow that retrofits old windows in the Detroit, Michigan area for energy efficient windows. These are done with exact measurements; if you're even a quarter of an inch off, you can ruin the entire job, and it can be a very expensive mistake. So if you don't have the ability to measure with exact, zero-tolerance for errors, it's probably not something that you can do very well.

The next thing is your proposition has to be something you want to do. For example, I had a yogurt store guy ask me, "Well, I'd like to open this store. Can you give me some help?" One of the first questions I asked him was, "Do you like yogurt?" He looked at me kind of funny and said, "Well, what are you talking about?" I said, "Well, do you like yogurt, do you like to eat it, do you like to serve it, do you like to see the toppings on it? Do you like yogurt in every aspect?" He said, "No." And I said, "Well, you probably shouldn't do it because you don't have a passion for that. You're not going to want to do it. And when the days come where you're working a double shift, or you have to fill in for a sick colleague, you're not going to want to do it. So, it's got to be something for which you have a passion."

It's also got to be something that the market's going to value. For example, I don't know if you've ever seen a Zamboni, but those are the machines that clean off the ice at skating rinks. You might say, "I'd like to have a Zamboni driving school," except that in most cities you're maybe only going to have two or four customers a year in most markets. You're clearly not going to be able to generate any business with that tiny of a market.

But, one fellow I know started a woodworking business to home school kids. He teaches them how to do woodworking and carpentering, and he targets these home school kids. He started on Saturdays as a side business, and now he does this fulltime. And he's doing it extremely well.

But, it's also got to be something that people will demand. Some people want things but won't pay for them. Most online websites support themselves with advertising, but customers typically don't want to pay for content unless it's extremely special or high impact. For example, we could make our website at Business Proverbs a subscription site and charge $10 a month, but the reality is that most people aren't going to pay that.

And so we have to recognize that we're offering something that people will pay for. And it's also got to be something that has a distinguishing factor. The unique proposition must answer the question, “What distinguishes you from all other businesses after people's time and money?”

So, one example of my own is that I endeavor to bring scripture in writing, in consulting and in speaking directly to business applications. The marketplace has thousands of consultants and hundreds of business writers, and they all offer their perspectives and insights. But I've accumulated over 80 pages of scriptural references that apply to practical business issues. And for me, this is my unique selling or ministry proposition.

So, as we work through our USP, we have to recognize that this is something that all business owners or CEOs must determine for their business. It's the responsibility that belongs to the owner or the CEO. It's one task that you cannot delegate. You can ask people to help validate it, you can get feedback, and you can figure out if the market will pay you for your unique proposition, but the leader must work this through. You may need some time to do this. It might take a few weeks. It's hard work. It's not easy. But, on the other hand, once you work through it and get to the other side, it can be a tremendous key to success

The next step in creating your unique proposition is to write it out because that will make it more clear. It should be 25 words or less. If it's any longer than that, it's probably too complex or too complicated. The statement is your way of clarifying to yourself, and perhaps more importantly to the marketplace, what you do better than other people. This is what will help you bring in business. While writing it out is difficult, when you take this step, you're going to be clearer with your staff and with your customers.

Let’s look at some examples from businesses that we probably understand a bit.

One is the pizza industry. Even a small city is going to have a lot of choices. And the question is, how do you create a unique sales proposition amid this clutter? Well, your proposition may be your location, your toppings, your staff, the heritage of the building, your decor, your clientele or something else. But the bottom line is that you need to recognize what will make it unique.

If your location happens to be your unique proposition, then target the specific neighborhood, stressing your location. Poor quality will certainly keep people away, but you need to understand that you won't be competing directly with customers who want high-end pizzas. Another pizza place may create a neighborhood experience with sit down service and a bit of ambience, kind of sending that message, "Come here for a quality experience," you know, "We're more than just a pizza place." And that can be very unique.

Domino's is an example. They initiated this guaranteed delivery originally, delivered in 30 minutes or it's free. The proposition was that they would get it there very quickly. Now they've altered that guarantee a bit, but they still work to get it to you very quickly.

Another example is a Tucson, Arizona little neighborhood pizza place. They believed they had high quality and they drew customers from all over the city. I challenged them a bit and said, "Look, your pizzas, while they're okay, are not at the top of the line. There are other places that have better products in the city."

I asked them to survey their customers, and they found that most of their customers were living within about one mile of their location. And that's typical of most pizza customers. So, they pulled back on their advertising around the city and put the money into local areas, specifically targeting that local geographic area to about the 2,500 customers they had within that one mile radius. And they targeted businesses that might want to buy a pizza for lunch. But, the point is, instead of spending money all over the City of Tucson, they focused spending money directly on the neighborhood in a variety of ways that brought customers in. And that's the key point.

So, how do these propositions work?

I can give you another example of a plumbing contractor. You look in the phone book and, again, you've got a lot of choices. You've got a lot of folks that say they offer emergency service and a lot of companies will advertise 24-hour service at no additional charge. But I ran across one contractor that not only offers the 24-hour service, but when you call his 24-hour number, you get a person who takes your call, keeps you on hold for a few minutes while they locate a service person, and gets back to you with somebody on the line. They confirm that you want the service, and they don't let you go. When you hang up the phone you have a commitment of when the person is going to be there.

Their unique proposition is that you don't get an answering machine. You get somebody on the phone. And if you're like me, when you have a clogged kitchen drain or a leaky pipe or something, you call a plumber, leave a message, and then you call somebody else. You're going to call a number of people until you get somebody to call you back because you don't want to wait around all day. Well with this example, once you call them, they keep you on the phone. They get you locked into a commitment, and they lock in the business. It's an excellent business model.

Another example of how the unique sales proposition would work is a soda guy that I knew. He was selling an off-brand fountain product, and was struggling to make inroads with gas stations and restaurants and those kinds of businesses. And his key selling phrase that he'd tell people was, "Well, my product is just as good as Coke and Pepsi." But I explained to him if that was his key argument, he's going to lose that every time because if that's all he's really saying, why don't they just buy Coke and Pepsi? But, his unique proposition was lower prices that would generate more profit per customer. And the customer could make more money when using the off-brand rather than a Coke brand. He could demonstrate how much additional money the customer could make each month, and in some cases the difference was well over a thousand dollars a month. So it was a significant amount of money.

Finally, I'll give you one more example of a unique sales proposition. And this one didn't actually work real well at the end of the day. It was a tax accountant who wanted to move to a small town, about 5,000- 6,000 people. He wanted this lifestyle change, and he was an excellent tax accountant. He felt he had a unique proposition for that area. The only problem was that there were only about 30 families in the town that were within the income level of his target customer, and they all had accountants. And even if he got all 30, there wasn't enough business.

Further, about half of these 30 families were farmers, and they had tax folks that specialized in farm tax returns. And they actually had more expertise than he did. So the market was way too small for him even before he started, and he had no opportunity to really be the high-end tax guy that he wanted to be. The result was that he had to take in a lot less desirable work at lower fees. He did some bookkeeping. He did a lot of other work. He was planning to do a lot or work during tax season and then coast, but that didn't work. He had to basically grind away each week to make the money that he needed for his budget.

So, once we've looked at these examples, we move on and say, “what if our unique sales proposition doesn't work or what if it doesn't exist, what do we do?” Well, idea is that you may want to refine or change it. There's no reason you can't change what you think is your unique sales proposition. If you believe that price is your key differentiating factor, and you find out that there are four competitors beating you on price, at that point you better figure out how to get your price down or you need to figure out a different competitive advantage because clearly you don't have price anymore. It's crucial to understand our proposition to get new customers because, again, it tells us who to target, how to target them and how to make that work.

A key question that I ask people often relating to their unique sales proposition when they say they are better than others is, "you are better than what?” And they look at me quite often and say, "Well, that's kind of a dumb question." And I say, "Not at all because if you don't know your competition, if you can't tell me how you're better, specifically how your business is better than somebody else, then you may not have a unique sales proposition or you may not be totally clear on it. You're not going to be able to really target your customers in a very effective way."

So, it's critical, then, when we look at our competition and we say we're better, we have to know very clearly what we are better than. Who is our competition and in what specific ways are we better?

One example was we see from scripture is when Michael was seeing an enemy coming that was too strong. He turned around and went back home. And there are times when we don't have a competitive advantage. Where a competitor in some area is stronger than we are, sometimes that's actually the best thing to do - to pull back - because when you fight with somebody that's too strong, that's not always an effective way of getting new customers. You want to fight the battles where you have your key advantage, not the battles where you don't have a key advantage. So we must carefully understand our competition, and we must battle in areas where we know and believe that we have an edge.

An example we see from scripture, again, is where the Lord is speaking, and he said, "Suppose one of you wants to build a tower. Won't you first sit down and estimate the cost to see if you have enough money to complete it? For after you've laid the foundation and you're not able to finish it, everyone will see and ridicule you in saying, this person began to build and wasn't able to finish. Or suppose a king was about to go to war against another king. Won't they first sit down and consider whether he's able with 10,000 men to oppose the one coming against him with 20,000? And if he is not able, he will send a delegation while the other is still a long way off and will ask for terms of peace" (Luke 14:28-32).

So, the point is, we need to recognize that we're not going to beat every company, every time, in every facet of our business.

You know, I get people that tell me at times that they want to compete on price, and I'll point out Wal-Mart. I say, "Are you going to beat Wal-Mart on price?" Well, typically not. If you try to compete with Wal-Mart on price, you're probably going to lose that most times on most products. On the other hand, there are other ways that you can compete with Wal-Mart effectively.

So what are the key steps to our unique sales proposition?

You may think, "I don't really have time to work through this. I'm a small business person; I do a part-time home business. I just don't have time to go do this." But, that's exactly the big reason that you need to understand and work through your unique sales proposition. It will focus the time, effort and money that you do have and focus that well.

You may think that you've got a unique proposition. You may all have this whole issue pretty well handled. But, I would encourage you to write out your unique sales proposition. I would encourage you, then, to validate with at least three other trusted advisors or counselors your unique sales proposition so that you can get feedback and get a sense if you are on target, off target, or if they can challenge you in some key area.

I would then identify what customers need and want from your unique sales presentation. When you do that, it's important to understand why customers spend money with you. One question I ask clients at times is, "Okay, of the 15 people that just walked into your business today and bought from you, why did they come in here? What is the key reason? What is the competitive advantage that caused them to come in and buy from you and not somebody else?" It's important that we identify those customers that need and want our unique proposition.

The fourth thing we can do is identify our competitors and determine specifically how we're better. We may not be better on everything, but we can identify the area that we are better. That way we can target the customers that need and want that advantage and grow our business far more effectively than if we're just, kind of, beating up heads.

Remember King Solomon who said, "If the axe is dull and does not sharpen its edge, then you must exert more strength" (Ecclesiastes 10:10). Wisdom has the advantage of giving success.

There's a story about a couple of guys that were in a competition to cut wood. One guy started at eight in the morning, worked all day, didn't take a break, and just kept cutting wood. The second person stopped and about every hour and took a 15 minute break and sat down. At the end of the day, the one that took the breaks and sat down cut more wood. The other guy said, "Well, how did you do that because I was working all day, I didn't take any breaks, and I didn't stop? How come you got more wood cut?" And the guy just smiled and said, "Well, because every time I sat down to take a break I sharpened my axe."

And so I think for us in our business or ministry or in our endeavors, we need to take time every day, every week, every month to sharpen our axe. And that's learning more about our business. It's learning how to do things better. It's how to be more effective. And then, at the end of the day we can really be far more effective because the Lord in his scripture talks about how learning is a lifelong process. None of us have arrived. We all have a lot to learn, including me and everybody else. And the more we focus on that learning, the more we participate in the learning experience, the more effective we're going to be in business.

Steve Marr, Your Christian Business Coach

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Comments (1)add comment

grace said:

...
this is so true! Most of us who wants to try new business forget to create clear and defined USP. It made me realize important things in starting business. Thanks for sharing your wisdom and God bless smilies/smiley.gif
 
June 06, 2011
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