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Business planning series – Part 5: competitive advantage and unique selling proposition

Business planning series – Part 5: competitive advantage and unique selling proposition


Welcome to part 5 of our business planning
series – competitive advantage & unique selling proposition
When developing your competitive advantage, ask yourself, why would a customer prefer
to buy from me rather than from my competitors? The answer is because I have a competitive
advantage to win their business. It highlights the benefits a customer can receive if they
choose to do business with you. It could be your products, your service, your reputation,
or even your location. For example, do you offer home delivery, a money back guarantee,
a two–hour call–out service or childcare facilities? It must highlight the benefits a customer
can receive if they choose to do business with you. Preferably it should be clear and
simple, but remember, as your environment can change over time – so can your competitive
advantage. To identify your own competitive advantage,
first try to understand that the buying practices of customers depends on whether:
they trust you you fulfil a need, for example convenience
you offer a higher level of quality than your competitors, or
your product or service has benefits that others do not. A simple example of the competitive advantage
for a floral delivery service could be: ‘The freshest flowers delivered on time,
every time, guaranteed.’ Once you’ve identified your competitive advantage,
you can develop your unique selling proposition, or USP. Your USP is the selling message, slogan or
marketing statement you use in your advertising, and which customers can easily remember. Think
Woolworths ‘the fresh food people’, or Budget, ‘we drive your dollar further’. Your USP is used as a tool to advertise, promote
and position your business against your competitors. It ensures your customers understand quickly
and easily the benefits your offer that your competitors don’t. It’s a statement highlighting
your main selling point. Your competitive advantage will remain invisible
to your customers unless you point them out via your USP. The catchier your USP the better, because
you want your customers to remember it the next time they want to buy what you have to
sell.

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