To develop a unique selling proposition (USP) you need to consider your products and services offering very carefully. Firstly how are you differentiated from your competitors? If it is solely on price, then the augmented or value added offerings that come with your product or service must be very good if not excellent compared to your competitors.
Many people in business who think a ‘Me too’ product means that their price must be the same as everyone else's, it is how you package this product that differentiates you. Your delivery service may be way above your competitors, your customer service levels are the best in the business or the range of products that you have a much better than your competitors.
Armed with all this your prices can afford to be differentiated (higher) than your competitors, because your customers clearly see them in a different light, and you want them to keep coming back for more.
Bearing in mind here of course, that whatever you decide to do in terms of being differentiated, you must continue to do; the market will be adverse to any business that constantly changes their point of differentiation. This does not mean you cannot improve, this means that whatever you say you going to do draw a line underneath this and maintain this point of differentiation and strive to continuously improve it.
Also, can you maintain a constant flow of new products or services to remain differentiated? Once you are known as a business that provides differentiated products or services, and you should ensure that you always are providing such products or services, a good example of this would, of course, be Apple, with their constant stream of innovative products.
Suffice to say we are not in the same league as Apple, however, it is the augmented (or value added) component that customers are looking for more and more in their purchasing activity. And in most cases, this is all about perception, for some customers, perception is the reality.
Develop a feedback system that provides information from your customers that they see your products or services as differentiated (and therefore offering value for money). This may be done by simply asking the question in conversation with your customers, or by surveying your customers from time to time.
So what this means, in short, is find out what everyone else is offering and do something different!
Certainly, the first point of contact with a prospect will provide an indication of whether this person sees your business as differentiated or not. You will reap the benefits if you establish all of your products with a unique selling proposition (USP), not just one or two. And as result of this, the rewards will be reflected in increased profitability compared to your competitors, across your product range.
Consider the following example:
A customer goes into a department store to buy a washing machine. The customer likes the look of the washing machine (A) and goes to the salesperson nearby to enquire further. The sales ticket on the washing machine says $300, the salesperson says to the customer... “Do you want delivery?” the customer says “yes”, the salesperson then says, “oh that will be an additional $30”, then the salesperson says “do you want this connected and installed by us”? The customer says “yes” the salesperson then says “that will be an additional $40”.
So the customer, who first thought that the price of $300 for the washing machine was attractive, is now put off by the fact that he/she would need to pay an additional $70 for delivery and installation. Again this is all about perception, so the customer feels he/she is being ripped off by the department store with these additional charges.
Okay now, let's rewind!
A customer goes into a store to buy a washing machine. The customer likes the look of the washing machine (A); the sales ticket on the washing machine says $370 including free delivery and free installation. Now the customer sees that he/she can get the washing machine and delivery and installation for a price of $370 with no extra to pay.
The perception is we now have a bargain, the perceived value of the add-ons, now outweigh the overall purchase price of $370. Perception is reality; the customer will always perceive service/quality/value for money in their own terms.