Originally posted on the Entrepreneur website, excerpts below:
Before you can begin to sell your product or service to anyone else, you have to sell yourself on it. This is especially important when your product or service is similar to those around you. Very few businesses are one of a kind. Just look around you: How many clothing retailers, hardware stores, air conditioning installers and electricians are truly unique?
The key to effective selling in this situation is what advertising and marketing professionals call a “unique selling proposition” (USP). Unless you can pinpoint what makes your business unique in a world of homogeneous competitors, you cannot target your sales efforts successfully.
Pinpointing your USP requires some hard soul-searching and creativity. One way to start is to analyze how other companies use their USPs to their advantage. This requires careful analysis of other companies’ ads and marketing messages. If you analyze what they say they sell, not just their product or service characteristics, you can learn a great deal about how companies distinguish themselves from competitors.
For example, the late Charles Revson, founder of Revlon, always used to say he sold hope, not makeup. Some airlines sell friendly service, while others sell on-time service. Neiman Marcus sells luxury, while Wal-Mart sells bargains.
Each of these is an example of a company that has found a USP “peg” on which to hang its marketing strategy. A business can peg its USP on product characteristics, price structure, placement strategy (location and distribution) or promotional strategy. These are what marketers call the “four P’s” of marketing. They are manipulated to give a business a market position that sets it apart from the competition.
Sometimes a company focuses on one particular “peg,” which also drives the strategy in other areas. Here’s how to uncover your USP and use it to power up your sales:
Put yourself in your customer’s shoes.
Too often, entrepreneurs fall in love with their product or service and forget that it is the customer’s needs, not their own, that they must satisfy. Step back from your daily operations and carefully scrutinize what your customers really want. Remember, price is never the only reason people buy. If your competition is beating you on pricing because they are larger, you have to find another sales feature that addresses the customer’s needs and then build your sales and promotional efforts around that feature.
Know what motivates your customers’ behavior and buying decisions.
Effective marketing requires you to be an amateur psychologist. 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. If your business is just starting out, you won’t have a lot of customers to ask yet, so “shop” your competition instead. Many retailers routinely drop into their competitors’ stores to see what and how they are selling. If you are really brave, try asking a few of the customers after they leave the premises what they like and dislike about the competitors’ products and services.
Once you have gone through this three-step market intelligence process, you need to take the next — and hardest — step: clearing your mind of any preconceived ideas about your product or service and being brutally honest. What features of your business jump out at you as something that sets you apart? What can you promote that will make customers want to patronize your business? How can you position your business to highlight your USP? Do not get discouraged. Successful business ownership is not about having a unique product or service; it’s about making your product stand out — even in a market filled with similar items.