Ou est le USP?

It’s been almost thirty-five years since the term “USP” entered the English language.
On the back of the consumer boom of the 1950s and early 1960s the world was a much easier place. An organisation's unique selling proposition was based on technical innovation. Every brand and every product launch could be packaged and positioned as truly “revolutionary.”
There was no such thing as global competition, in fact, by comparison, many of today’s marketers would look back and argue that there was no competition at all.

In the fourth quarter of 2003, the business world still agrees that an organisation’s ability to demonstrate a valuable “difference” remains the key to its long-term prosperity.
However, from this common “purist” standpoint, the majority of businesses then split into three pragmatic categories:

The first, truly (or maybe blindly) believe in absolute justice. Quality will always prevail and customers will eventually come to their senses and be prepared to pay more for a “superior” or “higher quality” product! Many who subscribe to this view have absolutely no idea or strategy for achieving such a transformation in attitudes.
In the absence of any firm plan they are resolved to wait in Godot’s corporate waiting room

The second group has long since abandoned any hope of differentiation. They know that competition is so fierce that it’s probably impossible to avoid commoditisation. As their margins and revenue streams continue in a downward spiral, they meet at industry events and trade conferences in order to agree just how bad things really are. They whisper of mergers, acquisitions and exits in a world where the key corporate strategy seems to be that of “last man standing”.

The third group have decided the only route left to competitive advantage is to take “price competition” to its ultimate destination and simply give things away in the hope that someone else such as a corporate sponsor, promotional agency or list sales provider will pick up the bill.
Failing that one can always hope that the “CRM process “ will eventually deliver a positive life time value from the customer?
The customer can now get free insurance, free text messaging, free flights, and even free PC software.
In fact, wasn’t it ITV Digital that gave away a free set top box?

By definition, price cannot be a differentiator. Price is the result of differentiation and pure price competition occurs in the absence of any other value differentiator.

Probably the most enduring differentiator is “cultural differentiation”

Organisations such as Virgin, John Lewis Partnership and First Direct instilled “a different” culture from day 1. A differentiator which is valued by employees and customers alike.
There is a fundamental difference in the way they do business versus their competitors.
It’s people first, strategy second.
In the case of Virgin that cultural differentiator is present across its businesses.
A customer has a core expectation of what they are expecting Virgin to deliver regardless of whether they’re purchasing a phone, an airline ticket or a compact disc.

Even if the cultural differentiator is not there from Day 1, Tesco and Burberry are two of the most recent and most successful examples of organisations which have fundamentally changed their “approach” to the way they do business in order to leap-frog over the competition.

Probably the most successful of the other differentiating strategies are market speciality, market leadership, being first to market (and so defining the category), and being the latest or the hottest kid in town.

Organisations who set out to ensure their products or brands manage to take “ownership” of a particular feature become very difficult to dislodge. First Direct is seen as one of the “owners” of call centre customer service in the banking sector. BMW are seen as an owner of “drivability”
Any competitor wishing to take market share from such organisations is faced with the prospect of a duel where the "owner” has defined which weapons will be used and exactly where and how the duel will be fought.

Despite what the corporate brochure claims, the majority of organisations do not have a set of global differentiators.
The key to their competitive success comes from their ability to adapt, reorder, re-package and re-theme their overall differentiators to the local market and local trading situation.

Sacrificing to Protect

Sustainable differentiation usually requires sacrifice. As an organisation expands and looks to the lure of new markets and new product lines it has to ensure that being all things to all people does not compromise its core value.

The recent Abbey National re-brand to Abbey can be seen as a deliberate attempt to re focus its value onto the personal banking and SME banking sectors. Simplicity, convenience and greater consumer choice play well to these sectors. They do not translate in any meaningful way to the complex world of corporate finance. Likewise being seen as a large corporate banking organisation could potentially reduce Abbey’s differential vs. the big 4 in the personal banking and SME sectors.

Several premium car manufacturers have tried to extract mass value from their prestigious brand names by building models for the mainstream. Jaguar’s X type is probably the latest example of this. However, Porsche’s attempt to cross over in the 1980s had a disastrous impact on their overall brand equity.

Customers like their differentiation simple and easy to identify. They haven’t got the time to figure out confusing messages.
Can an airline really be a premium carrier and position itself as low cost as well?

A large number of boardrooms and the vast majority of line managers would proudly tell you that creativity, customer oriented strategies, product range and quality are the things that make their business different.

Of course they don’t! All of these can be copied, adopted or acquired by any other player or new entrant to their markets.
Most of these “positioning claims” are the results of an overdose of corporate buzz from the late 1980s through to the end of the last decade.

For an organisation to be able to say it has a successful differentiation strategy it must be able to describe something which is relatively unique, difficult to replicate or acquire and something which the customer is prepared to pay for.

Next time an organisation offers you advice on differentiation, remember to ask them what it is that makes them different. If they don’t succeed in convincing you it’s one of the above, chances are, they’re not going to be that successful in helping you either.

Copyright AMG Limited