Competitor USPs & how to neutralise them

Over the last few days I’ve been looking at USPs (Unique Selling Points) for a small business.  It seems increasingly difficult these days to carve out some unique angle that is hard for competitors to copy.  Even if a USP is embedded into a product specification, the speed of product development in your industry is such that your competitors will match your specification with their next product release.

Look at examples such as laptops, tablet computers and smart phones in the technology space.  Even in major manufacturing industries such as cars and household “white goods”, the advantage gained by some design innovation is usually restricted to one development cycle.

I suppose the good news is that if you can develop an edge into your product specification, you will have this advantage until your main competitors modify their product(s) to neutralise your advantage.  It is unlikely such a USP could be neutralised in any other way except for your competitors to convince buyers that your unique feature was unimportant to the buyer’s specific circumstances.  Of course, you will be stressing how important it is, hopefully with a few reference clients who will substantiate your claims.

A USP which comes from a feature built into your product is still the strongest and persuasive, provided it is viewed as being important by prospects.

If you run a service company then your task is harder.  Finding a USP that is integral to your service but which is not linked to one of your business processes is very difficult, probably impossible.  The USPs I developed while working for service companies all fall into the business process category.  Our processes were improved to give better results, faster results and lower operating costs for our clients.

Process driven USPs can give you good differentiation for a few weeks or possibly months, as this is how long it takes before your competitors catch up with you.  For service companies these USPs are likely to be the easiest to develop.  Expect your competitors to catch you up so to keep ahead, you must develop a new process-based USP every few months.  This constant improving of your service delivery will keep your competitors on their toes.

What if your main competitors have USPs you need to neutralise?

In my recent analysis, there would appear to be 5 different categories of USP your competitors could be promoting.  Let’s look at them in turn and explore what options there are for you to counter them in the short term.

USPs that can be ignored.  The most common USP in this category is being the supplier who charges the lowest price.  You could easily match the price but this will impact your margins.  There is little value in trying to win this battle – if you reduce your prices to undercut your competitor, they could simply reduce their prices again.  A better strategy would be to highlight what extra benefits you offer for the slightly higher price you charge. 

USPs that can be easily matched.  The best strategy here, provided doing so doesn’t destroy your margins, is to match what your competitor is offering.  For example, same day dispatch shouldn’t hurt your cashflows but does require you to become better organised.  Free delivery might be harder for you to match, especially if your margins are already under pressure.  In after-sales activities, you could match a USP offering a 2 hour response commitment (by telephone or email) but would need to think harder about a 4 hour on-site service.  If you have longer distances to cover to reach your client than your competitor, perhaps offering the same USP isn’t possible.

USPs that seem irrelevant.  Sometimes marketing experts can dream up brilliant USPs to give their company an edge over their competitors but these USPs haven’t been validated with their clients.  If you encounter this sort of USP, find a way to survey your clients to see how relevant they believe the USP is to their business.  Obviously, for those clients who indicate the USP is important to them, you will need to introduce a similar USP as soon as possible to neutralise their advantage

These USPs can’t simply be dismissed and ignored, not until you have checked with your clients.  Sometimes your clients won’t be interested in the USP and your best option in this case is to not bother doing anything.

USPs that are process driven.  These USPs are reasonably easy to counter once you have understood what changes you need to make to your own processes.  Examples of this type of USP would be making a decision to accept or reject a loan application within 30 minutes of receiving the application.  Your current process might involve multiple sign offs and take much longer.  However, with some thought the whole process could be changed and you would also be able to offer a quick decision, thus neutralising your competitor’s advantage.

USPs designed into products.  As covered earlier, these are the hardest to counter quickly.  If you encounter one of these USPs there will be little you can do about it until you produce your next product revision.  In the short-term you might explore with prospects exactly how important such a feature was to them and hope you could marginalise the USP in some way.

ACTION IDEAS

  1. Invest some time looking to see which type of USP your competitors have compared to your business. 
  2. Identify how best to neutralise them and ensure you know how your own USPs can be of value to prospects.
Posted in Competitor / Market Knowledge