Part 2 of 7 in the Smart Business Planning series


Establishing a USP & competitor analysis

A Unique Selling Point (a USP, also known as a unique selling proposition) is what gives you an advantage in the market. It's what you can offer that no-one else can. USPs come in many forms. It may be something like higher product quality, speed of delivery, a better experience, a loyalty bonus, or some kind of innovation in technology or pricing. It could be any number of things.
One or more USPs could be the reason why customers choose you over your competitors. Many businesses find it hard to identify a USP, particularly if they’re selling on price. This short guide will aim to show you, step by step, how to identify valuable USPs and achieve market penetration.

Why is a USP important?

Customers can always make a choice. They may have many options to choose from and little time to make that choice. We’re inundated with marketing messages in every aspect of our busy lives. Customers are more likely to make a decision by focusing on a feature that appeals to them – clearly and obviously. A strong USP should convert unsure audiences and occasional browsers into loyal customers. But you have to isolate and identify that USP, clearly.

How to find your USP

Take time to analyse the market. How big is the market in your territory? Who is going to buy your products or services? What is likely to affect their buying decisions? How susceptible is it to technology and political factors? Is there much regulation? Does the economy affect business? Are there any environmental considerations to think about?

Step 1 – working out what your customers want

The first step involves stepping back from your products or services. Focus for a moment on customers’ most basic needs. What do they want, really? Think about what they value in your product or service. Try to put yourself in their shoes and work out the criteria used to overcome a problem. Is it “I need to stop this tap dripping quickly?” or “I want something tasty to eat?” Or “I want to solve a very technical problem with software?” Or “I want a cheap way to achieve a specific outcome – like budget trainers to get fit by running?”

Now, with those criteria in mind, think about the most common ways you and your competitors are trying to meet those needs or overcome those problems. What do you offer, what’s commonplace and which characteristics do people consider when they’re solving a challenge?
It’s a good idea to involve other people in this brainstorming exercise. You may be surprised by other people’s views on customer motivation. Talk to everyone who’s selling your product, in particular. Anyone who’s in the front line of sales should be getting invaluable feedback about the real reasons why customers are choosing a product or service.

Step 2 – benchmark your business

The next step involves getting to know your competitors’ offers. Analyse the market. How big is the market – are you a local business with competitors nearby, or a company that’s selling internationally perhaps with foreign competitors, online? Try to narrow down an audience that’s going to buy your product, and identify what your competitors are offering – and how.

For example: you offer a local carpet cleaning service. There are three other companies offering the same service in your area, so you want a strong USP that should bring customers to your door. Write down the key characteristics of your product or service, and benchmark the other businesses offering the same proposition:


You may find it useful to add scores for each aspect of the business, based on feedback or reviews. If that’s not possible, try to see things from a customer's perspective. Where you can, think about the way competitors are marketing themselves. What does it say about them? It’s useful to bear in mind that your competitors’ marketing strategy may change at any time, but this is a good starting point: focus on everyone’s core proposition.

Ask yourself:

  • Looking at what you offer, what are the reasons why people make this purchase?

  • What does this tell you about the way people buy your service or product particularly?

  • How are they affected - or not - by changes in regulation, the environment, or simply money?

  • What is affecting people's buying decisions, what matters most to them?

Step 3 – use that position to your advantage

You should be in a good position now to understand what the differences are in your competitors' strengths and weaknesses. Even if something doesn’t leap out at you as a USP for your own business, you can see where other companies may be struggling to match a basic proposition.
However, this exercise should give you an opportunity to examine your customers’ motivations in more depth. In this exercise, for example, it’s clear that customers do value a ‘fewer chemicals’ approach to carpet cleaning. Most businesses offer a ‘no solvents’ approach. But this company’s USP is its breadth of ‘environmentally friendly’ services – organic products, no solvents, organic room fresheners, a carbon-offset scheme… the USP here is something that should really matter to people who care about their impact on the planet.

Step 4 – protect and promote that USP

As soon as you start promoting a USP, observant competitors should be examining their own propositions to see how they can improve them. The next step is to ensure you protect your USP, especially if it’s something that can easily be emulated.
Remember, USPs come in all forms – including intellectual property. You may want to secure a supply chain that protects the quality of material used in your products, for example. You may want to promote the breadth of your product range or highlight a niche service. Think about the quality and origin of images used in your catalogue or brochureware. Can you capture an element of the experience for customers, in shop or online, or when benefiting from the product itself?
Simple USPs may need a little more thought. Your website and the ease of ordering, for example, may feel irrelevant, but if your customers need something quickly, it becomes important. Speed of delivery and follow-up customer service could be highlighted too – as could your attention to detail in aftercare or service for loyal customers. These are all examples of USPs that are well worth promoting.

A word on pricing

A low price may be advantageous in the short term, but there is sometimes more value in the perception of a high price. A ‘premium pricing’ strategy could also work to your advantage. When thinking about luxury goods in particular, sometimes a high price – and the kudos of being able to afford it – may be the product’s single USP.

In summary

A well-defined USP helps customers make informed choices – building loyalty to your brand and products or services. A strong USP can turn a vague enquiry or piece of research into a confirmed sale. When you have identified your USP clearly, make sure you share that detail with colleagues to promote consistency across your marketing. This puts you in an excellent position to make the most of a unique advantage against competitors.

Top takeaways

  • Finding your USP can be as easy as identifying ‘what makes us different?’ – but the reasons why customers choose your business may not always be as obvious.

  • Make a list of problems that your product or service overcomes. Those are the reasons why people buy what you’re selling.

  • Your USP is unique, so you’re trying to identify the ‘gap’ you fill in the market. Reflect on your aspirations and employees’ motivations.

  • Talk to people around you, ask what they’ve heard from customers about your products. You may be surprised at the reasons why people stay loyal to your brand.

  • Double-check – is this a USP someone else could copy? Do you need to take steps to protect your supply chain or intellectual property? Evaluate your USPs in depth.

  • Once you’ve set your benchmark – how you perform, what your competitors offer – turn that regular review into part of your business strategy. That way, you’ll capture emerging USPs.

  • Encourage your team to capture customer feedback that may highlight less obvious USPs. Things like ‘look’, ‘feel’, and ‘friendly people’ are hard to evaluate, but may be priceless.


Please note that these guides are provided for information purposes only and not as advice or recommendations. Before deciding to undertake any course of action you may wish to seek independent professional advice.