A Guide to Developing your USP (unique selling proposition) & Positioning Your Business in the Marketplace.
Part 1 – Developing your USP
So you have your target audience, or at least know how to go about identifying it, but the problem is that your audience are likely to have many suppliers of their desired product or service to choose from, so the question now is…..how will you be different?
Step 1 – Ask Your Customers What They Want.
In our last article, we focused on identifying your target audience and asked you to begin the process of developing your USP (Unique Selling Proposition) by first considering what it is that your target audience needs or wants, or what problems are not being solved adequately? Market research helps you to uncover opportunities where problems or needs are not currently being unmet by existing offerings in the marketplace, giving you the starting point to develop your USP.
Perhaps they are looking to get the results they want faster, but the existing solutions offered by your competitors take too long? Or maybe they want a business with more expertise in a certain area and all the local suppliers only offer generic advice? For example, a web design company that purely specialises in building high quality websites for dentists will have the knowledge of the dental industry and required expertise to provide a superior service.
Step 2 – Develop Your Uniqueness
The development and maintenance of a strong USP is vital because the success of your product or service will be determined by your ability to persuade your potential customers to purchase from you, rather than your competitors. Without differentiating yourself and giving them a strong reason to buy from you, it will simply come down to who’s the cheapest, especially in situations where each suppliers product or service is comparable.
You must find a benefit or difference that:
- Your potential customers will appreciate
- Nobody else offers in the marketplace
- Can’t be easily copied
A good USP will give you a competitive advantage so it is worth investing the time to develop one.
Your USP doesn’t have to be something totally unique to your product or service. You could differentiate yourself by how the product or service is delivered, a unique pricing structure or payment plan, an impressive track record of results, a guaranteed service level that no one else offers or a claim that your product / service doesn’t have a particular negative i.e. NO booking fees, NO artificial additives, NO expensive call charges etc.
This unique benefit then becomes associated with your organisation, allowing the customer in their minds to differentiate between you and other providers (your competitors) of similar products or services within the market place.
A strong USP needs to be;-
- Derived from a thorough understanding of your target market
- Based on your company’s strengths
- Tested and refined prior to advertising
- Well communicated to your target market
- Frequently evaluated for continued effectiveness
For a more detailed look at the importance and development of your USP, please read our earlier article https://www.trinity-accountants.co.uk/the-importance-of-a-usp/
Once you have identified this unique selling proposition, it should become the focus of all your marketing and advertising with a view to your company claiming a significant share of the target market and subsequently increasing sales and maximising profit.
Part 2 – Positioning Your Business
What is Market Positioning?
Having determined through your market research what your USP will be, it then needs to be well communicated to your target market in order to influence their perception of your product or service. This is called Market Positioning and its aim is to firmly establish, in the mind of the customer, your place within the market. For example, when you consider Rolls Royce, you probably think high-end luxury and exclusivity, and you’d certainly think ‘expensive’. In contrast, if you think of Daewoo your perception would be more of low-end, value for money cars.
Effective positioning ensures that marketing messages resonate with target customers and create the desired perception, encouraging them to take action by establishing a preference for your brand based on its position in the marketplace and its unique offering.
What do I need to consider?
1. What Marketing Channels will I use?
To position your product or service effectively, you must choose communication channels that are designed to connect with your identified target audience at times when they will be most receptive to these messages. Consider how car manufacturer’s position their products via TV adverts during televised sporting events or toy manufacturers advertise on children’s channels and ramp up that advertising from September onwards just as children are starting to think about their lists for Santa!
For smaller businesses that can’t afford TV adverts there are lots of other channels to reach your target audience. Consider the following:
- Google Search Advertising – people searching for the product or service you provide
- Google Display Advertising – placing your adverts on websites that your target market visit regularly
- Relevant Magazines / Papers – placing adverts in these publications that are read by your audience
- Posters / Billboards – adverts in geographical areas where your target market will see them
- Social Media Advertising – promoting your product or service to your target market using the power of social media
- Leaflet distribution – door to door leaflet drops to businesses or consumers in your target audience
2. Where do I want my business/brand to sit within the marketplace?
Some companies choose to position themselves at the cheaper end of the market with the promise that they won’t be beaten on price but this is not recommended, particularly not for the small business. If you’ve developed a strong enough USP based upon market research, and advertise it effectively, you won’t need to enter into price wars to sell your product or service because your USP creates the perception that your offering has something in addition to your competitors’ that is worth paying for. With a powerful USP, you will be well placed to either charge more for your product / service and position yourself at the premium end of the market or keep your prices in line with your competitors but enjoy higher revenue as a result of a greater volume of sales.
John Lewis – an example of clever positioning
Let’s consider the John Lewis partnership. They are a great example of positioning that has stood the test of time. Their “Never knowingly undersold” positioning statement is 90 years old and still going strong. It creates a sense of trust, a feeling that you’re buying quality but not at a premium price and suggests that they are prepared to price match so as not to alienate those looking for the cheapest price but in an understated way so as not to jeopardise their higher location in the marketplace. This market position has been achieved by the perception created through their brand values of value, integrity and vision, earning them a firm and unique place in the hearts of the nation’s shoppers.
In recent years increasing competition for both online and in-store retail, coupled with a good deal of economic gloom could have caused John Lewis to panic and advertise/price more aggressively to keep up with the competition. Instead they stayed strong, holding on to their belief in their brand and came up with some of the most famous TV advertising in a decade. No in-store shots were used and there wasn’t a price in sight, just extended feel-good adverts that empowered the emotional connection with their audience. Several years on and not only do we still associate John Lewis with quality and trust but we now associate the anticipation of the John Lewis extended Christmas TV advert with the beginning of the festive season empowering that emotional connection with the brand still further and cementing their market position for the future.
Product positioning is at the foundation of any effective marketing plan because the perception of your brand in the mind of the audience is vitally important, it’s the building of a perception of your business that will underpin your brand and ultimately, as a result of all of the above, it impacts the ultimate purchase decision.
Hopefully you have found this article useful. If you have any questions or would like to discuss developing your USP or positioning your Small business, please contact Sam on 02475 185286 for a Free Consultation or complete our online form.