Differentiation, niche marketing, and positioning. These and other related business buzzwords have no doubt crossed every small business owners ears in recent years.
But what do these words really mean to the average entrepreneur?
Usually, they mean that a business will attempt to sell a product or service which is somehow different than the competitions to a certain, specific kind of customer.
In theory, this is a great idea. If you could just reach that one segment of the market with your great, new, innovative product...
Welcome to reality.
If your company is innovative enough to develop a truly unique product or service that is earning you a profit, the following inevitably happens:
Competition springs up from nowhere to imitate your product, undersell your price, and steal your market share. It’s immutable.
So, as your next line of defence, you choose to position yourself as the quality leader within your field. Or as the low price leader. Or as the service king.
You soon find yourself in a battle with four other companies, all claiming to have the largest selection in the state...
CLARITY IS MORE IMPORTANT THAN VOLUME
A marketing free-for-all usually ensues. Each competitor tries in vain to shout with the loudest voice that his business is superior.
Headlines get bigger, radio ads get more obnoxious, advertising agencies get richer.
More significantly, customers begin to discount any claim made by any of the companies.
Is niche marketing the way to go then?
Obviously different is better than me-too.
Target marketing is more profitable than selling to the masses.
The question isn't whether or not to be different, but rather how to communicate those differences in a way that your customers will believe and embrace them.
Your Real Opportunity for Innovation Lies in the Marketing.
Avoid The Ostrich Theory of Marketing
This theory comes into play when you begin to believe that your customer is only interested in your company and your products or services, and is not being bombarded or seduced by all sorts of other services and products all of the time.
Let me explain with a short story...
A seminar was put on in Las Vegas which had well over 100 businesses scheduled to attend. Sounds great, but one fatal mistake was made...
After they had registered, it was figured that they were in the bag, so the organisers went along doing other things without sending them any confirmation letter or follow up call.
The result of this "head in the sand" attitude?
Over 30 businesses had canceled by the time the seminar date rolled around.
That cost several tens of thousands of dollars in revenue.
Not to mention an extremely embarrassed group of marketing consultants!
The moral of the story?
Keep your head out of the sand and don’t take anything for granted... especially your customers.
Here's an example...
The city a friend of mine lives in has just over 150,000 people.
Google lists over 32 (I stopped counting!) companies that repair air conditioners.
Of those, 34 spend from a couple hundred dollars to a few thousand dollars a month in adwords in addition to the regular places listing.
Some of the advertisers claim to be the experts.
Most tell me in bullet points that they only charge one low rate, even if service is needed after hours or on weekends. Almost all of them tout that they fix all major brands.
None of them, however, gives me a compelling reason why I should call them instead of their competitors.
The “unique” claims of each company have become generic, non-appealing, and meaningless to the prospect who is just waiting to be sold.
Surprisingly, very few businesses really make more than a token attempt to distinguish themselves from their competitors.
Once a company stakes out a position in the marketplace, the usual strategy is to foolishly proclaim to all potential customers:
“Here we are, now give us all the business that you have been giving to our competition for no justifiable, rational reason.”
Fortunately, you can cash in on what your competitors are doing wrong.
The most powerful tool you can use to stand head and shoulders above your competition is the Unique Selling Proposition (USP.)
Your USP is the singular, unique benefit that your customers can expect to receive when they favor your business instead of your competitors stated in specific, graphically illustrative terms.
ARTICULATE YOUR ADVANTAGE
An air conditioning repair company I know of in Las Vegas harnessed the power of the USP and tripled the size of its business in less than a year.
Before developing and articulating a USP, the company had been guilty of running “me-too” advertising.
Their ad (where 90% of their business came from) had the company name plastered across the top in huge letters. Bullet points let everyone know that they provided 24-hour service, that they serviced most major brands, that they had 22 years of experience, etc.
Because everyone else’s ad said essentially the same thing, and since their ad was relatively large, they were able to build a respectable business in spite of their me-too approach.
Each year they were able to generate enough revenue to do the following:
1) Add a new truck or two to their fleet.
2) Keep their repairmen busy most of the time.
3) Generate a small profit for the owners.
4) Continue to run the advertisement.
What more could small business owners ask for?
A lot more!
The first step in developing their USP was to determine what customers wanted most from an air conditioning repair company.
In the 8 month long Las Vegas summer even a couple of hours without an air conditioner is sheer misery.
Clearly, fast service was to be the premise for their USP.
But everyone else already claimed to have fast service.
Some companies even put FAST SERVICE in big headlines at the top of their ads.
It wasn’t as if nobody else had ever figured out that being fast was important.
The funny thing was that nobody else had ever figured out a way to say it in a way that would allow them to stand head and shoulders above the competition.
The next year they ran a half page ad as usual (no additional expense), but changed wording to say,
“Because we have 58 repairmen on call 24 hours a day to man our 27 service trucks, we can guarantee that your home or business will be cool within 2 hours of your call - or theres no charge for the repair.”
And that was just the headline!
The rest of the ad went on to explain that if the crews were too busy to fix the unit right then, or if the repair would take longer than 2 hours, portable units would be brought in to cool the house at no extra charge until the repair was completed.
Bottom line, the customer would be cool in a hurry, period.
The company put a lot of faith in their new USP based on previous test results - they actually only had 17 repair trucks and about 40 technicians when they first placed the ad.
They were counting on the ad to generate enough business to afford them the additional trucks and personnel.
The number of calls the ad generated quadrupled in less than one month after the new should book came out.
More importantly, they were able to convert 50% of the calls into jobs - up from from 38% before.
Gross revenues soared, and new trucks were bought to keep up with demand.
The end of the year profit for the owners was higher than they thought they would ever see.
The new articulation of the USP “fast service” was the key element in the company’s turn around.
Obviously, other factors contributed as well, like the the company’s underlying dedication to fulfilling the big promise of fast service.
The company also employed several of the other techniques which will be discussed in this report.
The point is this:
A simple re-articulation of the USP “fast service” increased their bottom line by over 400% with no additional advertising cost.
WHAT'S YOUR USP?
Your USP should be developed around your strengths and your competitors weaknesses.
Some general USP premises might be lower prices, biggest selection, longest warrantee, convenience, quality, superior services, better guarantee anything that sets you apart from the pack.
Keep in mind that how you articulate the advantages of your USP is every bit as important as the USP itself.
The least compelling thing you can say is that your USP is Quality and Service.
Theres nothing unique about quality and service.
I’ll bet every one of your competitors thinks they offer quality and service.
You have to be more specific...
Heres a way to force yourself to articulate your USP in a way that customers and prospects can embrace it:
Imagine that you meet me in line at Sam’s Club and we start talking about your business.
You’ve only got 30 seconds before you have to show the check-out lady your card to tell me what you do and why I should buy whatever you sell from your company.
Practice your 30 second speech right now - thats your USP.
An office supply company, Business Technology, has grown to nearly a million dollar business on a simple USP - “Easy to Order.”
Thats the One-Second version of the USP. The 30 second speech goes like this:
“Business Technology will save you time and hassle when ordering your office supplies. We’ll take your 100 most frequently ordered items and put them on a Fast Order Form then, when you’re ready to order, you just write in the quantity of each item and send it over to us. You don't have to waste time flipping through those huge catalogs for the same old items every time. We also give you a computerized version of our catalog so you can look up less frequently ordered items in a matter of seconds.”
Sounds kind of simple, doesn’t it?
Also sounds like a service that the competition probably offers to their customers. They probably do. Just make a big deal about it, It works like crazy!
Take a few minutes to think about your company and the competitive advantage to be gained by developing and articulating your own USP.
What are you already doing that you could really concentrate on an emphasize to your customers?
Remember, the USP must be something you can truly deliver on, and it must be integrated into every single facet of your business.
Imagine an air conditioning truck. What do most of them say on the side?
“ABC A/C Repair.”
“Broken Air Conditioner? Cool Again Within 2 Hours or No Charge” - then a phone number and name of the company.
Here are a few quick, simple, ways you can continuously pummel your USP into your customers’ and prospects' minds:
1. Print your USP, articulated in a sentence or less, on all company invoices, brochures, business cards, etc. Make sure your print ad headlines or sub-headlines include or refer to your USP.
2. Make your USP the first or second sentence to come out of your sales peoples’ mouths when they contact customers.
3. Continue to find ways to improve the performance of your USP, then let your customers know what you’ve done.
I think you get the idea.
Marketing is a battle for the consumer’s mind.
If their minds perceive your business as truly offering more service and greater value, and you can consistently deliver, you will win the battle.
Write your 30 second sales pitch (also called elevator pitch) down and commit it to memory.
I'd love for you to write your USP in the comments below!Share This Post: