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What Is a Unique Selling Proposition?

Meredith Wood

Meredith Wood

Vice President and Founding Editor at Fundera
Meredith Wood is the founding editor of the Fundera Ledger and a vice president at Fundera. She launched the Fundera Ledger in 2014 and has specialized in financial advice for small business owners for almost a decade. Meredith is frequently sought out for her expertise in small business lending. She is a monthly columnist for AllBusiness, and her advice has appeared in the SBA, SCORE, Yahoo, Amex OPEN Forum, Fox Business, American Banker, Small Business Trends, MyCorporation, Small Biz Daily, StartupNation, and more. Email: meredith@fundera.com.
Meredith Wood
Editorial Note: Fundera exists to help you make better business decisions. That’s why we make sure our editorial integrity isn’t influenced by our own business. The opinions, analyses, reviews, or recommendations in this article are those of our editorial team alone.

For almost every market, there are multiple competitors seeking the eyes and dollars of the same customers. So how do you get your business to stand out?

Your unique selling proposition is key to your business’s marketing strategy and overall success. After all, if no one knows why your products or services are special, why will they choose them over all the other options out there?

You know why your business is special, but crafting a unique selling proposition can help you communicate this to potential customers as well. In this guide, we’ll explore everything you need to know to discover your business’s unique selling proposition.

Unique Selling Proposition Definition

Your business’s unique selling proposition, also known as USP, is what defines and differentiates your business from your competitors. Your unique selling proposition is the quality of your business that attracts and retains customers. In other words, it’s why your customers choose your product or service over that of your competitors.

Depending on your business and the number of competitors in your market, it can be difficult to identify your unique selling proposition. However, it’s vital for your business’s success that you have a strong USP. The number one reason why businesses fail is due to a lack of demand. Meaning if your unique selling proposition isn’t carefully thought out, people won’t buy your products or services.

To find your unique selling proposition, you need a deep understanding of not only your own business but your competitors’ businesses and how you fit into the market.

Tips to Create a Unique Selling Proposition

If you’re looking for your unique selling proposition, you need to take a close look at your business, its mission, and what you’re offering your potential customers. In other words, you need to discover what makes you unique within your market. These tips can help you to find and craft your unique selling proposition.

1. Get to Know Your Target Customer

Who will buy your product or service? Hopefully lots of people, but when you first had the idea for your business, you likely had a certain customer in mind. Who would benefit most from your product or service? While your business may appeal to many different types of people, it’s helpful to pinpoint a target customer so you can focus your branding and advertising on one group, rather than trying to please all kinds of people—which will likely be unsuccessful.

Getting to know your target customer will help you to get a deeper understanding of your business, which gets you closer to finding your unique selling proposition. 

When you know who your target customer is, you better understand how to market to them. Even more importantly, you understand what problems they’re facing and how your product or service will solve them. 

2. Define What Problem Your Product or Service Solves

Once you know your target customer, then you can figure out why they should buy your product or service. People buy things for a reason, after all, and generally, that reason is to solve a problem of some kind. If you can solve their problem, they’ll be happy and loyal customers. 

When you’re exploring what your unique selling proposition is, a good place to start is examining what problems you solve for your customers and how. That gives you a strong jumping-off point for discovering your USP.

3. Keep It Short

When you’re pitching your business or selling your product, you have to grab someone’s attention quickly. To do that, you need your unique selling proposition to be short, succinct, and clear. 

Think of the full version of your USP as your elevator pitch—it shouldn’t take you longer than 30 seconds to deliver it. From there, you should refine it even more until you have just a sentence or a few words. You might also find your business’s slogan while you’re at it. 

4. Make a Promise

While your unique selling proposition is a marketing tool that you can use to entice customers to buy, it also acts as a promise to your customers. You’re promising them what they can expect when they buy from your business. Your USP shouldn’t just be a string of buzzwords with no meaning behind them. This is actually what your business provides, so make sure it delivers. And never promise something that isn’t possible. 

5. Talk to Real Customers

While you’re workshopping and writing your unique selling proposition, a lot of what you’re basing your assumptions on is just guesswork. You might know who your target customer is and what motivates them, but you can’t be sure your USP will resonate with them until you test it out. 

Once you have a refined unique selling proposition, get some feedback. You can ask friends and family, get a test group of strangers together, or run a small campaign with your actual customer base.

And if your business is already up and running, talk to real customers and solicit feedback about why they bought from you, what they liked about it, what could improve, etc. A short customer survey can provide you with valuable information—plus, your customers will appreciate that you want their opinions.

6. Look at Your Competitors

Of course, your product can’t be unique if you don’t know what similar products in your market are promising. Take a close look at your competitors, what their products or services offer, what their USPs are, and what their customer reviews have to say (both positive and negative). 

Knowing what your competitors are offering will help you to identify what makes your business unique. Once you know what makes your product or service better or different than the rest, your USP will basically write itself. 

Unique Selling Proposition Examples

To better understand what a unique selling proposition is, let’s take a look at some examples from well-known companies. This can help you to evaluate just how a company differentiates itself within the market and highlights how it solves a problem for the customer.

Here are three unique selling proposition examples to consider. 

1. Southwest Airlines

Southwest Airlines is one of the few truly beloved airlines—which is a pretty difficult industry to please people. While Southwest is a budget airline, they haven’t lowered their standards for quality or excellent customer service. That’s a rare combination. 

Southwest Airlines’ unique selling proposition is to “connect people to what’s important in their lives through friendly, reliable, and low-cost air travel.”

To accomplish their sales pitch, the airline offers travelers low-cost tickets, pricing transparency or “transfarency” as they’ve dubbed it, and happy employees who provide stellar customer service.

While these may sound like basic tenets for any successful business, it’s rare in the airline industry, and travelers remember Southwest for it. Two free checked bags per passenger doesn’t hurt it either.

2. Trader Joe’s

It’s no easy feat for a grocery store to have a cult following, but Trader Joe’s has done just that. For anyone who has visited one of these grocery stores, you’ll immediately understand their unique selling proposition: “Innovative, hard-to-find, great-tasting foods.”

Trader Joe’s USP harnesses so much of its brand and personality in just seven short words. Trader Joe’s is innovative by creating a new way to shop. Each store is on average half the size or less of traditional grocery stores. It’s modular, meaning that they can and do regularly switch the layout around. And, they continuously bring in new products so customers are never bored. 

What really sets Trader Joe’s apart, though, is nearly everything in their stores is their own brand. This makes their products automatically scarce and, when they do well, beloved. (If you’ve ever tried their “everything but the bagel” seasoning, you get it.) 

3. Warby Parker

Another rather new brand that’s taken a well-established market by storm is Warby Parker. 

This brand’s unique selling proposition is “to offer designer eyewear at a revolutionary price, while leading the way for socially conscious businesses.”

This USP harnesses what makes Warby Parker unique, what pain points they solve, and differentiates them from their competitors. 

The pain point they solve: that eyewear is too expensive. How they’re different from their competitors: trendy frames that are less expensive than competitors. What makes them unique: they’re a socially conscious business.

So when a consumer is looking for a new pair of glasses, why wouldn’t they choose a company that offers fashionable frames for a great price, as well as providing glasses and eye health services to underserved communities? It’s a win-win-win.

The Bottom Line

A unique selling proposition takes time to craft, but you shouldn’t get too far into starting your business without one. After all, if you can’t articulate why someone should buy your product or service, it’ll only be an uphill battle. 

Explore your business, your target customers, and your competitors to find what sets your business apart. Then craft a unique selling proposition to help center your brand and develop a marketing strategy that will reach your customers and convince them why they need to shop at your business. 

Meredith Wood

Meredith Wood

Vice President and Founding Editor at Fundera
Meredith Wood is the founding editor of the Fundera Ledger and a vice president at Fundera. She launched the Fundera Ledger in 2014 and has specialized in financial advice for small business owners for almost a decade. Meredith is frequently sought out for her expertise in small business lending. She is a monthly columnist for AllBusiness, and her advice has appeared in the SBA, SCORE, Yahoo, Amex OPEN Forum, Fox Business, American Banker, Small Business Trends, MyCorporation, Small Biz Daily, StartupNation, and more. Email: meredith@fundera.com.
Meredith Wood