Determining Your Unique Selling Proposition (USP)

Part III of a Four Part Product Series (Part I / Part II / Part IV)

Your Unique Selling Proposition, or USP, refers to the benefits that a consumer gains by choosing your product over another. Ask yourself, “What benefit am I trying to deliver to consumers?” Then, put that into words that speaks to your target market and distinguishes your product from your competition.

Our first task, then, is to determine who our competition is. Our beer is poised to bridge the gap between craft and macro breweries, so our direct competition is both of those (along with imported beers). Our indirect competition includes any alcoholic alternative to beer, from wine and wine coolers to cider, hard lemonade, Smirnoff Ice, and the like. Let’s do a deep dive into our direct competition, and see if we can’t come up with a niche to call our own.

Let’s start with the microbreweries. Any craft brewery that has distribution in Iowa college towns is our competition. There are 53 microbreweries in Iowa as of 2014, more than half of whom sell their beer exclusively within Iowa.¹ This means that there is already a fair amount of competition for the “locally-made” angle, while simultaneously implying that there’s a healthy demand for local beer in Iowa. Our next step would be to go through the offerings of those breweries that sell in college towns and figure out what makes them unique. I would also visit as many beer stores and bars as I could in Iowa college towns and find out from the retailers and bartenders which are their best selling craft beers. Then I’d look for a common denominator as far as style of beer, branding, alcohol content, etc, that most appeals to our target customer. We don’t want to copy those beers, but we at least want to bear its success in mind while crafting & branding our own.

As for macrobreweries, the style of beer is totally uniform: American Adjunct Lager. This is the best selling style of beer in the United States.² It encompasses all of the major brands: Budweiser, Miller, Coors, Pabst, etc. The word “adjunct” refers to unmalted grains (such as corn or rice) or grain products (such as corn syrup) used in brewing beer, usually with the intention of cutting costs³ while lightening and softening the characteristics of the beer. Today’s adjunct beers have undergone decades of refinement in order to appeal to the broadest number of people, making it refreshing and drinkable at the expense of bold flavor characteristics.⁴

As we determined, our target customer wants to drink better beer, but they’re poor and their palates are accustomed to bland macrobrews. To Millennials, better beer means better ingredients, locally- and sustainably-sourced wherever possible. What is Iowa known for? Corn! So why don’t we give them a American Adjunct Lager made with non-GMO, organic Iowa corn? (Hey, I never said this is a good idea. But I do think it’s potentially a viable one.) Adjunct lagers use cheap substitutes for more expensive, flavor-imparting ingredients, so if we can figure out a recipe that tastes just a little better than the macros, and a little less bold than the average craft beer, then we can probably keep our ingredient costs down while making a tasty beer that appeals to our budget-conscious target customer of unrefined taste (along with their college-student awareness of environmental issues).

Okay, so, now that we know who our competition is and how we’re going to distinguish ourselves, we can start to put our USP into words that speak to our target market. Bear with me here, we have to get a bit more theoretical, but I promise it will pay dividends for you because what we’re about to discuss is totally fundamental to everything you will ever do as a salesperson for a small wholesale producer.

In order to arrive at our Unique Selling Proposition, we have to know what our Unique Value Proposition is. In his article “USP vs UVP,” ⁵ Brett Curry offers some excellent insights. Check this out:

“There are really two sides to any company: the Inside Reality and the Outside Perception. The Inside Reality is who you are as a company, it’s your products, your process, your people, it’s ultimately what makes your company great (or not so great). The Outside Perception is what the market thinks about you. It’s what a prospect in your market might say if asked what they think about your company.”

From this he goes on to say that your UVP encapsulates your Inside Reality. It articulates internally who you are as a company — your personality, identity, and strengths — so that everyone working with you is on the same page.

“A UVP tells you and your team what you are all about. It’s what will guide you into the future through changes, challenges, and opportunities. Your UVP also serves as a great basis for making decisions. If you know ultimately who you are as a company, then making decisions becomes much easier.”

In other words, your UVP is your raison d’etre. It’s the value that you have set out to create as a company. Your UVP will inform and guide all of your sales efforts, and keep you focused and cohesive as a brand (we’ve all seen brands that seem to be having an identity crisis, aka “brand confusion”). The Harvard Business Review lists three basic types of UVPs that might apply to Small Wholesale Producers:

1. Best quality. This is a common one for small, independent producers. Handmade, locally made, premium and/or sustainable ingredients, etc. These all add up to higher quality than the commodity competition, and make for a great selling point for small companies who could never compete with the big guys on price alone.
2. Luxury. Luxury products “promise the experience of a wealthy lifestyle to aspirational consumers.” In her book Cooking up a Business, Rachel Hofstetter puts it like this: “To create a sense of luxury and worth, tell a story. Take a beautiful photo, then write or talk about where and how the item was made and the special, precise details. The goal is to connect customers to the product so they see the value in the price tag. That luxury story should also come through in the logo, packaging, and retail locations.” ⁶
3. Best value. Many consumers look for the budget option, particularly when it comes to grocery items. “This doesn’t necessarily mean lowest price on the shelf, but rather the best quality-to-price ratio.” ⁷

Our beer is certainly not a luxury item. What about the other two? Relative to other American Adjunct Lagers on the market, it offers the best quality, and relative to the other craft beers on the market, it is cheaper (though certainly not the best quality-to-price ratio). Our UVP, then, is “Better quality than American Adjunct Lagers, more affordable and accessible for college students than other craft beers.”

This is a great UVP that tells us exactly the value that we as a company are creating in the world. The problem is, it isn’t sexy enough to sell to the public. We now need to translate our UVP into a USP that immediately resonates with our target customer and shows them how we’re different. According to Curry, our USP helps steer the Outside Perception of our company, and tells our market why they should care, or what’s in it for them. “A great USP comes from a deep understanding of who your customer is, what they want, and what makes them tick.” ⁸

In other words, your USP is essentially your tagline. So how’s this for our USP: “Graduate to Better Beer.” It’s short and sweet, appeals to a senior in college, and speaks to their experience of having had their tastebuds hijacked by the macro beer industry. As for the second part of our UVP, that it’s more affordable than other craft beers, our price tag will speak to that. We’d want that to fall somewhere between macros and craft. (We’ll tackle pricing strategy in a later post).

One last thing to note about USPs: in all likelihood, you would have a different USP for each product that you offer.

Now that we have a solid USP, a deep understanding of our target market, and a clear idea who our competition is, we can turn to branding, where we get to deliver on everything we’ve learned thus far.

Up Next: Part IV of IV

¹https://www.traveliowa.com/UserDocs/2014_Iowa_Craft_Beer_Economic_Impact_Report.pdf
² http://www.greensbeverages.com/alcohol-u/type/american-adjunct-lager
³ https://en.wikipedia.org/wiki/Adjuncts
⁴ http://www.greensbeverages.com/alcohol-u/type/american-adjunct-lager
⁵ https://onlinemarketinggiant.com/usp-vs-uvp
⁶ Cooking Up a Business, Rachel Hofstetter, Penguin Books/TarcherPerigee, 2013
⁷ https://hbr.org/2009/09/value-propositions-that-work.html
⁸ https://onlinemarketinggiant.com/usp-vs-uvp