The relation between USP and Value proposition

Many a times, readers get confused between value proposition and USP which stands for unique selling proposition. They generally ask the difference between the same. This article tells you how USP and value proposition are different and yet the similarities between them.

A unique selling point is 1 or maximum 2 things which differentiates the product from its competitors. For example – Volvo is known to have the safest buses and cars. Apple is known to be a solid brand and has a fantastic brand equity. McDonalds is known have fantastic burgers and quality across its all outlets.

So each of the above brands has a unique selling point. Now, to understand the relation between USP and value proposition, lets understand what value proposition is.

Value is built in a product right from its concept stage up to the last point of delivery to the customer as well as its after sales service. To know more about how value is built in a product, read about the value chain by porter. In essence, the more you build a product keeping the customer in mind, there more are the chances of your product’s value being higher.

Naturally, a product will have the highest value when it has a USP or a unique selling point. The reason Volvo is a favoured brand is because it provides security to its travellers. The reason apple has such a fantastic brand equity is because its Laptops are awesome.

So basically, USP is a part of Value proposition. When you want to provide value to your customers, you need to have a unique selling point to sell to the customers. This USP is the main point on which your value stands.

Volvo is just an automobile manufacturer like Audi, BMW, Volkswagen, Toyota and others. However, it delivers more in value because its USP is safety. A Lamborghini has the USP of its design and speed. A Ferrari has its USP in it being a major status symbol. So, each of them deliver value to the end customer, and each of them has a USP.

Does USP exist only in branded product to deliver value? Absolutely not.

A USP can be anything. If I introduce an ergonomic keyboard, the keyboard being ergonomic is my USP. It can sell better than normal keyboards. But if i am not advertising the product, and i am not distributing it in the right channel, then i am not building value for the product. So my USP is in place, but the value proposition is poor.

Alternatively, if the USP is not in place, then too the value proposition will be poor. If you have built value but you don’t have an USP, then it means you have not differentiated the product enough for it to have an USP.

So bottom line – Both USP and value proposition go hand in hand and neither can exist without the other. But for the sake of consideration, USP is always a part of value proposition. A company cannot sell just on the basis of USP. It has to have a value proposition along with it.