What is a Unique Selling Proposition or USP?

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If you sell the biggest watch in the marketplace and your prospects all prefer smaller watches, then making the size of the watch your USP is not going to do you any favors. WireImage / Getty Images

A Unique Selling Proposition (USP) is a specific characteristic that makes one product, company or person stand out from the competition. Defining your USP is helpful in selling situations for two main reasons. First, if you don't know what makes your product or company better than its competitors, you'll have a tough time working up much enthusiasm during sales. And second, a USP gives your prospects a clear-cut reason to do business with you.

A good USP is a powerful way to differentiate your product from the competition. Many prospects simply don't see much difference between the different products in your industry niche, so they'll choose which one to buy based on price - not a good situation for you! Having a strong USP takes your product out of the commodity category and turns it into something that has value over and above what's offered by the competition.

Finding the Right USP

The best USP for your situation isn't always obvious. Charles Revson, the founder of Revlon, famously said that “We sell hope, not makeup.” When selecting your USP you must figure out what your customers stand to gain from your product or service, and base your USP around that.

Another factor to consider is that a USP must not only be unique, it must be important and positive to your prospective customers. For example, if you sell a watch that's the biggest watch in the marketplace and your prospects all prefer smaller watches, then making the size of the watch your USP is not going to do you any favors.

Find another unique quality - is your watch battery much easier to change than similar watches? Do you use superior materials? Do you offer the best guarantee in the industry? Does your production process allow you to offer the watch at a price below the competition's, without sacrificing quality?

Many companies use a USP for their slogan.

For example, take Milky Way's slogan, “The sweet you can eat between meals without ruining your appetite.” It's a plain statement of how Milky Way bars are different from other candy bars: they won't fill you up and spoil your dinner. Consider whether your company's slogan also qualifies as the basis for a good USP. If it does, then your USP comes with a huge advantage: it's something customers and prospects have probably heard a thousand times and can recite by heart, so it will stick with them.

Some companies have a tough time finding a good USP because they know their product isn't necessarily the best in the marketplace. Smart sellers can turn this around and point out how a perceived disadvantage is actually an advantage. A classic example is the car rental company Avis, who started out far behind its powerful competitor Hertz. Avis launched a new ad campaign based around the slogan “We're number two. We try harder,” and tripled its market share in just four years.