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What is a USP and how can one benefit your business

Without a unique selling point (USP), making your start-up stand out in a crowded market could be difficult.

To give your start-up the best chance of succeeding in a competitive market opens in new window, you could identify and focus on what makes your business different.

But many businesses are the same, and their products and services may not be as unique as they appear, so how do you stop yours from being lost in the crowd?

One way to do that is to have a unique selling point – a differentiator that allows customers to clearly understand how your business differs from competitors.

But what is a USP – and how can defining your USP help your business?


What is a USP?

USP stands for unique selling point, although it is sometimes referred to as a unique selling proposition.

A clear USP can help your business stand out from the competition opens in new window, as it allows customers to see a clear point of difference and can be a vital part of marketing your business, giving customers a reason to buy.

Your unique selling point isn’t just limited to a specific product feature or unique service offering – it can be applied throughout your entire organisation, such as customer service opens in new window, pricing opens in new window, materials, and manufacturing processes.

For example, a local restaurant business that only uses locally sourced ingredients would have a USP against other local chain restaurants and might attract local customers looking for a sustainable dining option.


Why does having a USP matter?

A strong USP can be a valuable marketing tool to help your products or services gain customers ahead of the competition.

With a USP, you can define your products or services’ place in the marketplace, showcasing the specific benefit you can offer customers with your products or services that your competitors can’t.

Other benefits include:


Examples of unique selling points

Some of the biggest brands have well-defined USPs – and many started as smaller businesses with a clearly defined USP that helped them differentiate themselves in their market.

  • Zoom – Zoom became synonymous with virtual meetings due to its ease of use, reliability, and free basic plan, distinguishing itself in a crowded market of video conferencing tools, especially during the growth in remote working during COVID-19
  • IKEA – IKEA’s USP offers stylish, functional, and affordable furniture, a unique in-store experience, and a unique self-assembly model that reduces customer costs.
  • AirbnbAirbnb’s USP opens in new window is offering unique, local accommodation and experiences that traditional hotels can’t provide, often for far less cost than a hotel room
  • Lush Cosmetics – Lush’s commitment to fresh, handmade, and ethical cosmetics is a clear USP – supported by a stance on no animal testing and the use of organic ingredients, which appeals to ethically conscious shoppers opens in new window
  • Poundland – It has a clear price-driven USP where customers can expect the majority of its products on sale to cost £1.


How to develop your USP

There are many areas where your start-up could offer a unique selling point or proposition – from pricing and product features to customer service and innovation.

  • Pricingcompetitive pricing opens in new window, such as pricing that is lower than competitors or new models such as subscriptions, can be a strong USP and include strategies such as price matching, bulk discounts, and loyalty program benefits
  • Product or service features – this could be a unique design, additional capabilities, or customisation options for products or services
  • Customer service – exceptional customer service, including personalised support, easy and no-cost returns, extended service hours, or dedicated account management opens in new window, can be a major differentiator
  • Speed or convenience – offering faster or more convenient services than competitors, such as quicker delivery times, easy-to-use interfaces, or mobile accessibility, can be a valuable USP
  • Sustainability – depending on your target market, using eco-friendly materials, adopting green practices opens in new window, or contributing to environmental causes can set your business apart from less sustainable operations.


How to develop your USP as a start-up

Start-ups can be well-placed to clearly define their USP – a unique proposition is often one of the reasons why a start-up business launches in the first place.

To define your start-up’s USP, consider looking at your business from your customer’s perspective.

You may want to conduct business research opens in new window into what your customers prioritise when they shop for similar products and services to find out what is most important to them and what influences their purchases.

With this research, you could answer questions such as:

  • are they prioritising faster delivery?
  • how much are they willing to pay for a product or service?
  • what materials or ingredients are they focusing on?
  • what are customers complaining about when reviewing competitors?
  • can products or services be redeveloped for a different target market, such as older consumers?


How to communicate your USP

Clearly and effectively communicating your business’s USP to your customers can be an effective way to attract and retain them.

Consider how you can communicate your USP in marketing materials, such as social media posts opens in new window and marketing emails opens in new window.

For example, you could promote unique product features or include client testimonials and reviews showcasing your unique customer service experiences.

Read our guide on how to market your start-up on a small budget opens in new window.


Learn with Start Up Loans and help get your business off the ground

Thinking of starting a business? Check out our free online courses in partnership with the Open University on being an entrepreneur.

Our free Learn with Start Up Loans courses opens in new window include:

Plus free courses on finance and accounting, project management, and leadership.


Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.

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