Chapter 3. Creating a Unique Selling Position

Once you’ve chosen your target customer and the needs you plan to fill, the next step is to create a unique selling position, or USP, for your product or service. In order to zero in on an effective and useful USP, we need to look at three types of market criteria. They are

• WIIFM (What’s In It For Me)

• The Four Ps

• The Big Five

We’ll talk at the end of this chapter on how the integration of the customer niche and market niche criteria, if done properly, will give your USP more than just the sum of its parts. For the USP must be designed into the online storefront, not after it’s up and running.

What’s In It for Me?

The last thingyou want visitors to say to themselves when they view your carefully constructed offer at your online storefront is “So what? What’s in it to me?” It could be that you’re not answering the ever-present question of the online shopper, “What’s in it for me?” And you have to answer it in less than 10 seconds or they’re off to your competitor.

Many years ago, a company called Federal Express (www.fedex.com) came up with a new concept: delivering packages overnight. Until FedEx came along, if you wanted to ship a small package to the next city or state or even across the country, you had to go down to either the local bus station, post office, or airport and hand the small package over to the bus company, post office, or airline for them to deliver it. You were pretty much at the mercy of these shipping companies who would deliver the package on their schedule, not yours. Back then it might take up to several days to have your package delivered because the bus companies and airlines were in the business of moving people or, in the case of the airlines, people and large cargo, not small packages. Then, it had to be picked up at the package’s final destination! And though the post office would deliver small parcels, you never really knew when they would be delivered.

FedEx saw an opportunity here. All they had to do was convince the public that they could deliver packages in a convenient and speedier fashion. But they needed a slogan that would say that their package delivery service was better than those of the airlines and bus companies. And they needed to say it in one simple phrase.

After much thought, they decided that what differentiated them from their competitors was that they owned their own planes. This meant that customers could ship and receive products on the customer’s schedule, and not the schedule of the airlines or buses. So what was the unique selling position that FedEx chose? We have our own planes.

It didn’t fly with the public.

People didn’t get it. “So you have your own planes,” they said. “What does that mean to me?”

So, FedEx went back to the drawing board and came up with this: “When you absolutely, positively have to have it overnight.” That worked. The public responded, and the rest is commerce history. Consumers didn’t care if FedEx had their own planes. They didn’t care if their packages were delivered by plane, train, bus, car, or Pony Express. The benefit to the consumer was that the package was delivered overnight, right to the recipient’s door.

Another good example is Domino’s Pizza (www.dominos.com). How do you differentiate one pizza service from another? Domino’s differentiated itself when it first got started from the competition by promising to deliver your pizza in record time: “30 minutes or less, or it’s free!”

There’s a lesson here, one that you can use when creating your own unique selling position (USP). You need to always remember WIIFM: “What’s in it for me?” This is what a customer is looking for when he or she buys. Phrase your USP in those terms and you’ll go a long way in creating an effective and successful unique selling position.

Differentiating Yourself from Your Competition

It’s a competitive world out there, and getting more so every day. Your business is faced with the challenge of differentiating itself from your competitors and giving the consumer a reason why they should buy from you rather than your competition. But that’s not as easy as it seems.

For example, ask a random sample of business owners to tell you what makes them different from their competition, and you’ll get a blank stare, or perhaps a response like one of these:

“My prices are the lowest.”

“I guarantee satisfaction.”

“My products are of high quality.”

“I give great customer service.”

But none of these responses sets them apart from the competition. Many businesses can claim the same things. A business must know what they offer a customer besides general statements and why they think a shopper should buy from them. That is, what makes the business unique in the market and in the eyes of a potential customer? To do that, you need to ask yourself the following questions.

• What gives your company a unique advantage over your competition?

• What is the distinct reason for consumers to buy from you?

• Can you portray in the consumer’s mind a compelling image of what your business will do for them that others can’t?

Notice those highlighted words: advantage, reason, and image. That’s your objective when creating a solid, exact, and usable unique selling position that both positions you in the marketplace and convinces a consumer to buy from you. A good USP creates the framework and lays the foundation for your compelling product or service offer.

If that isn’t enough, a good USP also keeps your business pointed in the right direction.

One of the things that made both FedEx and Domino’s a success was a measurable and beneficial USP. They were measurable (overnight and 30 minutes, respectively) and carried a unique benefit (FedEx delivers to the recipient’s door; Domino’s promises it’s free if not delivered on time).

Getting the picture? A good USP is specific, measurable, and conveys a customer benefit. Let’s review.

So how do you differentiate yourself from the competition? How do you answer the consumer questions of WIIFM? Start with this: Using a pad and pencil, ask yourself the following questions and answer them as simply as you can. Remember, you’re not creating a corporate mission statement here, so keep your responses simple.

“Why is my business special?”

“Why would someone buy from me instead of my competition?”

“What can my business provide to a consumer that no one else can?”

“What’s a benefit to the consumer that I can deliver on?”

Keep your answers simple, specific, and measurable, and show a benefit to the buyer. If you’re confused by what you offer, your customers will be, too.

Keeping Your Eye on the Competition

Ignorance may be bliss, but in the knock-down, drag-out world of business, ignorance of your competition can be a deadly mistake.

Keeping track of your competitors can be a difficult and time-consuming task. You can hire a corporate spy to infiltrate your competitor’s organization; do a little dumpster-diving for useful discarded memos, manuals, and correspondence; or work smart by monitoring your competition’s activities right from your desk, using the Internet. The Internet is filled with resources that can provide your company with media sources, web directories, clipping services, and competitive intelligence to keep you up to date on who the competition is and what they’re doing.

By using these online sources, you can discover the answers to questions such as

“Who are the leading companies in your industry?”

“What information on your competition is available?”

“Which of your competitors are most likely threats?”

Positioning Your Business—The Marketing Mix

If you’ve been anywhere near a marketing course, you would have heard of the Four Ps of Marketing. They are price, place, product and promotion. The Four Ps is another set of criteria that can help you choose a market niche. Let’s look at price first.

If you’re going to compete on price, don’t just say you’re the lowest—say why. Customers will not accept a blanket statement unless you can prove it. For instance, perhaps you can sell at such a low price because of your ability to source product from the closeout industry, buying products at pennies on the dollar. Or perhaps you have an exclusive arrangement with a distributor or manufacturer that no one else has, allowing you to sell at the lowest price. On the other hand, you may sell at the highest price but offer some added value, such as free shipping or free 24/7 support. Play up these unique factors in your USP.

Next is place. The Marines are a good example of this P.

The Marines are looking for a few good men—not all men, just a few, and only good ones. This is a great positioning statement, which makes their “business” unique and differentiates them among the other services of the armed forces. Another example was the tagline “The Pepsi Generation.”

Look for a similar positioning with your business. Perhaps your focus is gender-based. Perhaps it’s age-based. Sell to a unique segment of the population, not to all of it.

Following place is product. Take a common product that others sell and repackage it in a new way. For instance, take the iMac. It’s just a PC, but look at the packaging. Not only does it sell, but it sells at a premium price! It also has a great positioning statement. Think Different! The iPod is another example. There are portable music devices at a lesser price, but Apple has learned that a sexy package goes a long way in differentiating the product, plus carrying a higher price tag.

Then there’s promotion. Study the promotional possibilities of your product or service. Can you tie your product or service with a season or holiday where you can benefit from the promotional activities and mindshare of consumers that already exist at that time of year? Targeting your promotional message at the right time is the key to acceptance. So sit down and make a list of the popular seasonal events, including religious and cultural events other than those with a Euro-Christian focus, such as the Jewish and Asian religious holidays and ethnic holidays like Kwanzaa.

Finally, remember this very important fact when constructing your USP. Your USP is not about you nor is it about your business—it’s about your customer.

The Big Five of eCommerce

Shoppers don’t care about your site, your business, or your life. What they care about is themselves. When they come to your site, they want to see if there’s anything there that interests them. They want to know, “What’s in it for me!” They come to your web store with a certain set of expectations. Your job as a web merchant is to meet those expectations.

Your customers expect to find what they came for: a fair price, a good selection of product, great service, and a secure and safe place to shop. In other words, they’re looking for the Big Five of online shopping. And if they’re from “out of town”—that is, another country—they’re also looking for a site that speaks their language!

The Big Five are

• Selection

• Price

• Service

• Convenience

• Security

Consumers want to know right away if their visit to your site is going to save them time and money and if their shopping experience will be a pleasant one. Can they find what they want easily? Can they place an order in a variety of ways? Can they find your customer service pages, shipping and handling fees, and return policies without spending a large amount of time digging through your site looking for them?

These are the customer’s expectations and you have to meet them if you want your online business to be a success. If your site is designed with the Big Five of online shopping in mind, you’ll provide your customers a pleasant shopping experience and a reason to buy from your online store again.

Let’s take a look at them. The Big Five of online shopping are selection, price, service, convenience, and security.

Selection: Do You Have What They Want?

Shoppers come to the Net for the vast selection of product and services that are available at the click of a mouse. Whether shoppers find you through search engines, store directories, or through your own marketing and promotion, after they arrive at your site, they want to know you have what they’re looking for. Don’t build an impression in the shoppers’ mind that you sell computer software or have an online bookstore and then offer only a small selection of titles.

When building a small- to medium-sized business, you need to focus your product or service offering. Look at your unique selling position. If done correctly, it tells you the market you’re targeting and the unique product or service you’re selling. If you’ve done your homework and created a compelling unique selling position, the shopper will feel that your web store offers the best selection on the Net.

Store Examples

Offering a good selection to shoppers is not necessarily a numbers game. The quality of your selection is much more important for a small web business than the quantity. The following are some good examples of small sites that work in large product categories yet deliver a good selection of product offerings for their market.

Music Stores

You don’t have to be a CDNow.com or an Amazon.com to be successful selling music CDs on the Web. Acres of Videos & CDs at Click4Stuff at stores.yahoo.com/ggroup sells hard-to-find CD sets. Shoppers who come to their web store will find a good product selection specializing in hard-to-find classic music CD sets. Aramusic at stores.yahoo.com/ara-music sells Arabic music CDs from the Middle East (see Figure 3.1). And Harmony Marketplace at stores.yahoo.com/harmonymarketplace carries the best in harmony music on CDs.

Figure 3.1. Aramusic has picked a narrow niche of the market. Middle Eastern music.

Software Stores

You don’t have to be a CompUSA (www.compusa.com) to competitively sell software on the Net. You can offer a specialized selection of software to shoppers and still give them a good selection in the category you choose. Accounting Shop at stores.yahoo.com/2020software sells only accounting software, whereas Natara Software at shop.store.yahoo.com/natara/ sells productivity software for the Palm handheld platform (see Figure 3.2).

Figure 3.2. Natara Software chose to specialize on software made only for Palm PDAs.

Pet Stores

The large pet stores on the Net such as PetsMart (www.petsmart.com) carry a wide variety of pet supplies for all kinds of pets. But a small store such as BunnyLuv-Essentials at shop.store.yahoo.com/shopbunnyl/ offers a nice selection of rabbit care supplies, toys, hay, food, and grooming tools. A shopper who comes to their site would be pleased with the selection of products in that subject area. Houndz in the Hood at stores.yahoo.com/houndzinthehood (see Figure 3.3) offers only coats for dachshunds, mini poodles, and Italian greyhounds. As you can see, you can run with the big dogs of eCommerce if you choose your product or service well and deliver the best selection in that category.

Figure 3.3. Houndz in the Hood saw a niche unfilled by a large section of dog coats and filled it.

Price: Is Your Price Right?

What kind of price animal is your eBusiness? That’s a question you need to answer. And after you answer it, your web store must demonstrate it.

Do you sell products or services at a discount? Do you want to be a low-cost leader in your market niche? Or are you a value-added reseller? Do you add additional value to products in the form of some kind of service charging a higher price? Do you set the price of the products and services you sell, or does the consumer? Whatever pricing model you decide on, you need to make it very clear to the shoppers who come to your site. Consumers do not like surprises. If you promoted your site as the low-price leader, your prices should show it. If you’re a boutique shop and charge better-than-average prices, show the value you’ve added to your products or service. Make it very clear what you charge and why, and be sure it fits the expectations of your site visitors.

Another important point is not to hide your prices. Nothing annoys a shopper more than going through the process of ordering from you, entering their credit card number, and then being told what the total shipped price is. Be sure that you give your shoppers all the information they need to make a buying decision, up front, before they buy. Don’t draw the customer into the buying process with low prices and then surprise them after they place their order with exorbitant shipping and handling charges on the order confirmation page. If you want to see a shopper bolt for the door, this is the way to do it.

So how do you inform the shopper of your shipping and handling charges? You can do it in one of two ways.

• Provide an easy-to-find section on your site that lists and easily explains your shipping rates and policies in general and your handling charges.

• Present an order review page to the buyer that lists the price of the product and all applicable shipping and handling charges. Give the buyer the total shipped price before you request his or her credit card number.

We suggest that you do both. That way the shopper fully understands the total amount of the sale before he or she completes the purchase. Don’t forget to include any and all applicable taxes in the total of the sale.

Service: How Do You Measure Up?

You’ve put a lot of effort into building your web store. You’ve created a good selection of product for your market category and priced your product or service to sell. But that’s not enough to earn a customer sale. Customers expect to be serviced, so customer service is a top priority for your website. Because you’re not dealing with customers face-to-face, your service policies must instill a sense of trust in your shoppers.

Many current eCommerce companies on the Net today don’t understand this simple fact. Consumers expect service. Your web store must deliver it. Good customer service includes

• Email confirmations

• Multiple means of contact

• Support outside business hours

• Guarantees and return policies

Email Confirmations

After a customer clicks the Place My Order button, he or she immediately wonders what will become of his or her order. It’s only natural that sending an order into the vastness of cyberspace can cause a certain amount of consternation. You can relieve much of your customer’s worries, and avoid frustrations, by sending a series of email confirmations that informs the customer of the status of his or her order right through the sales and shipping process.

As soon as the order is placed, an email confirming that the order was received should be sent to the customer. The Yahoo! store offers this service. The email message should include a complete record of the transaction, including the following information:

• An order number.

• What was ordered.

• Who ordered it.

• Where it will be shipped.

• Total amount of the sale including all shipping and handling costs.

• Customer service contact information in case the customer has a question about the order. Yahoo! store automatically sends an email with all the information cited here except for the customer service contact information. This has to be added by you and you also have the option of additional text in the email confirmation.

Another email message should be sent confirming that the product ordered is in stock and when it will be shipped. A third email message should be sent after the product is actually shipped, containing the name and tracking number of the shipping company that was used. Finally, send an email to your customers after they have received their orders asking them for feedback and even offering them a discount on their next purchase if they buy within the next few weeks. For merchants that use UPS Shipping tools to ship orders in the Yahoo! store Order Manager, an email is sent after processing the order with UPS. The email includes the tracking number, which saves the merchant time cutting and pasting tracking numbers.

Yahoo! store again helps you out here. Yahoo! allows you to create coupons and or discount codes to send to customers if you use their Merchant Standard and Merchant Professional packages.

Provide Multiple Means of Contact

Always provide a number of different ways that a customer can contact your customer service department. There are several ways to do this.

List your customer service email address on your website and include in it all email correspondence with your customer. In addition, tell people where you are located. Include your company’s address, telephone number, and fax number on your website.

List a telephone number for customer service. Let customers know when a live person will answer the telephone. If you use an answering machine, be sure you leave a message that tells the caller when they can expect their call to be returned.

Invest in a toll-free telephone number and list it on your site. Not only is a toll-free number relatively inexpensive, it goes a long way toward building a level of consumer confidence in your business.

Remember that shoppers don’t like surprises. Be sure they understand the terms of their purchase before they click the Buy Now button. Tell the shopper under what conditions he or she can return a product. How many days or weeks do they have to decide to return it? Will they get a refund or a credit? Who shows how to use your product or service and gives troubleshooting tips in case customers run into trouble after hours? Be clear and specific and list all details about your return policy on your website.

Remember that it pays to keep all line of communications open with your customers and to provide a quick response to customer emails.

Convenience: Are You Easy to Do Business With?

When a shopper comes to your web store, he’s got his credit card in hand and he is ready to buy. So don’t let your website get in his way. A web store with a poorly designed navigation structure will frustrate a shopper. Even though you have a great offer, if the shopper can’t easily find it and buy it, he’ll click off to your competitor and probably will not come back.

A lot of thought must be given to how a shopper can search for products on your site. If you offer a shopper multiple navigation options, it will help her find what she is looking for fast. Have the capability on your site for shoppers to search by

• Product name

• Price

• Product category

• Manufacturer

The more site tools shoppers have to search with, the faster they can get to the products they’re looking for, and the faster you’ll make a sale.

But finding a product to buy is only the beginning. Just as important as price selection and service is convenience. How easy is it to navigate through your site? Getting lost in a site is discouraging and will send the shopper away fast if he can’t easily find his way through your web store. Good site navigation entails telling your visitor where he is, how he got there, how he can get back, and where he can go next.

If your site navigation is done properly, your shoppers should be able to get to where they want to go in just three mouse clicks (Three Click Rule). Be careful when designing the navigation bar on your site. Graphic links to the different sections of your site are nice and give a professional look to your web store. But also include text links that duplicate your graphic navigation at the bottom of your pages in case your site loads too slowly through a shopper’s browser.

Remember that your website should be intuitive to navigate. Your site pages should provide a visual map of how to get from one place to another that says, “Here’s where I am. This is what I clicked on to get here. If I click on that, I’ll go there next.”

Security: How Trustworthy Is Your Site?

Good websites establish trust. Online shoppers can be a very skeptical bunch. They’ve been trained by the media to expect all kinds of online scams that are waiting to pick their pockets. If up to now you’ve given them a reason to buy from you, now they have to trust you enough to plunk down their money.

Shoppers are looking for proof that your site is trustworthy to deal with. A good way to do this is join eTrust or the Better Business Bureau (BBB). eTrust at www.etrust.com certifies that the personal information you give a site is protected, and the BBB at www.bbbonline.org shows that you abide by the BBB way of doing business.

You build trust in your website in two ways:

• The customer knows his or her credit card number is secure when placing an order on your site. Tell shoppers to your site that their credit card orders are secure. Put that testament right on your home page and on every product page.

• The customer knows that the private personal information he or she gives you is kept personal and private. A good, well written, non-legalese privacy policy should be easily accessible by visitors to your website.

Shoppers are very concerned about using their credit cards to make purchases online. When you build your store on Yahoo!, all credit card transactions are secured on their server. Still, some shoppers just will not place an order online with their credit card, no matter how secure it is. For these types of customers, provide a toll-free telephone number to call in their order to you. Also provide an order form on your site that they can print, fill out, and fax to you.

Privacy Policies

The Internet is a great medium of commerce. With it, you can create new marketing methods, tap new markets, and target potential customers with electronic ease. And it also can get you sued by millions of consumers for violating their privacy!

If you thought spamming consumers with unwanted email was a blight on your company’s reputation, consumers are even more upset over the incessant abuse of their personal privacy, not to mention the government investigating the business practices of e-businesses. But companies need to gather a certain amount of information to personalize and better serve their customers. After all, how can you connect with a customer if you know little or nothing about her? There has to be some kind of balance between protecting a consumer’s privacy and the need for your business to target and personalize your offers to your customers.

Consumers are sensitive to what’s done with their personal information, but it doesn’t mean they’re against giving it if the circumstances change, including getting something back for the information.

Yahoo! store provides a default Privacy Policy page for your online store, so you are covered there, but you need to read and modify the statement to create your own privacy policy. Finally, make your privacy policy accessible right from your home page (see Figure 3.4).

Figure 3.4. The Tube Store combines Yahoo!’s privacy policy with their own.

Appendix C provides a worksheet that will help you choose and integrate the different elements of a USP to create a unique selling position for your company. The object of this worksheet is to look at each of the elements and decide which of them, and which parts of them, will help define your USP then integrate them into an effective USP.

Now that you have created your unique selling position, it’s time to start planning your Yahoo! Store business. Turn the page and let’s get started.