How and why should you create a Unique Selling Proposition

Software development

Coming up with a Unique Selling Proposition has been one of the cornerstones of success for many businesses, including yours. Even though the all-time favorite reference for start-ups – the “Lean Startup” – teaches us not to create what we can, but to create what we can sell, many still spend months of their precious time and don’t meet customers’ or investors’ expectations. Often times, the cause of failure lies in something else than just a weak product or idea; it’s the lack of or misguided marketing skills that can make your product look unattractive to potential customers.

Poor marketing can derail your project in many aspects, one of which being the investor pitch – a presentation of your product(s) in front of an investor team. Oren Klaff describes this issue quite adequately in book “Pitch Anything”:

“You can have incredible knowledge about your subject. You can make your most important points clearly, even with passion, and you can be very well organized. You can do all those things as well as they can be done—and still not be convincing.”

At Astra.Software, we recommend following a well established and proven Software Development Process or Methodology. We briefly touched on several phases that in our opinion are crucial: validation, investment and picking the right Software House for your Canadian Start-up. In this article, we are going to help you create a USP for your idea as well as the steps prior and after establishing a USP.

Getting started, before you create your USP.

Before you perform any marketing effort, you need to clearly define what you’re doing and for whom. Preparing to creating a USP is one of the critical milestones on your road to a successful startup. However, in order to get somewhere, you need to know where you’re going. To help you prove that your idea is sound, please refer to our other blog post.

Prior to starting working on your USP, you should answer the following questions:

1. Who are you targeting your product to?
2. How big is your target group?
3. Do you know your “ideal” customer?

Don’t hesitate to create a persona of your ideal customer, Hubspot defines personas as following:

“Personas are fictional, generalized characters that encompass the various needs, goals, and observed behavior patterns among your real and potential customers. They help you understand your customers better.”

 

Source: hubspot.com

Focus on the following metrics: age, sex, profession, income level, place of living and interests. The better and clearer you can imagine your customer, the easier the next steps will become. We recommend choosing someone who you already know and/or have done business with in the past.

Which problems of your customers does your product solve?

Most probably it is the most important part of your start-up idea. In this phase, it is very helpful to come up with a detailed description of this problem as well as the solution that you provide to this problem. These are going to be your building blocks for a Value Proposition.

Jill Konrath, a sales strategist, speaker and the author of the sales books, writes in one of her blog posts about dangers of not having a Value Proposition:

“Without a strong value proposition, it’s much harder to sell your products or services in today’s economy, much less even get in the door of big companies. But what is a value proposition? And how is it different from other commonly used terms?”

Naturally, at this stage, you can only provide partial answers to the questions raised above. Do it as best as you can, though. Eric Rise, in his Lean Startup, claimed that you can never be a 100% sure what the customers would buy and that you learn constantly from the feedback you are getting. The startup has to be lean so that the learning process doesn’t outweigh your business’ thrust and momentum. A great component of a promising vision is an MVP – Minimum Viable Product – a product with just enough features to gather validated learning about the product and its continued development. For more information about MVP, see our blog post about idea validation.

Next step in your Lean Startup is creating a Unique Selling Proposition.

USP first.

What is a USP? As specified by The Chartered Institute of Marketing, in their report on USPs, its purpose is to differentiate your product from the competition. Creating a good differentiator list will tremendously help your customers decide if the product is what they are looking for or not.
Time.com reports that 55% of people spend less than 15 seconds on a website. Your USP is a tool, a trojan horse, launched full throttle at your customer’s brain in that short 15-second window of opportunity. The cognitive part of their brain will judge, compare and pick out your proposition if it stands out and resonates with customer’s needs.

You’re probably wondering why people are so harsh and only dedicate 15 seconds of their undivided attention. It’s deeply rooted in our evolution. As far as sales pitches, Oren Klaf put it correctly in “Pitch Anything”:

”The croc brain is picky and a cognitive miser whose primary interest is survival. It doesn’t like to do a lot of work and is high maintenance when it is forced to perform. It requires concrete evidence—presented only in black and white—to make a decision. Minor points of differentiation don’t interest it. And this is the brain to which you are pitching.”

You are going to be targeting the same brain with your USP, knowing this will help you prepare.

Preparing a USP

For the next step of creating your USP, we recommend creating three lists. CIM report distinguishes the following three pools, and you should dedicate 15 minutes for each one of them:

1. List all the pros of your product – list everything without judgments
2. List what your competition has to offer – you will need this list to identify your differentiators
3. List the ways how the customers can use your product

Uber is a great example of a successful implementation of such approach. Many city-dwellers struggled to hail a cab, pinpointing the pick-up and drop-off location. Even a printed or written address didn’t guarantee success. To name a couple of locations Bangkok, or pretty much anywhere in India or China. Travelers also struggled with having cash, foreign currency exchange or access to an ATM and above all getting fleeced by a cab driver.
All of the above has been included in Uber’s USP:

Marketing Donut makes a point with an important element of a USP:

“Match each USP against what you and your business are good at. Also, think about how you want to be seen. Don’t advertise yourself as always being available if you don’t want to work a 60+ hour week!”

Being client-oriented only can also ruin your business. Keep that in mind.
Having the three lists, move on to the next step:

Create a detailed USP description

Having all of the above in mind, in a few sentences answer the following question:

how to set up usp

In this text, create your Value Proposition. We’re not done yet.

One-sentence USP

In the last step, extract your largest differentiator in one sentence. It doesn’t have to be a full offer, rather think of your potential clients’ interests towards your company or products.

Does Apple in their USP – Think different? – Describe the details of their business activity? Not really. Even though other technological companies have caught up with Apple, to have one is a synonym of unconventional thinking.
Another legendary example of a great USP is Domino’s Pizza:

Be warned however before slowing down your startup due to a non-ideal USP. Don’t spend more than a few hours to get through this process and create a USP that is as good as possible, yet not perfect. You can always go back and tweak it later. eBay did that quite a few times.

“Instincts are experiments. Data is proof.”

Thus, build an initial version of your product, start your marketing efforts in the form of USP and next iteration test your thesis on a live organism. Let Peter Drucker‘s words be the guide:

“If you can’t measure it, you can’t manage it.”

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