On a previous blog, DevonshireDozer asked for evidence for the "business axiom" often quoted by those promoting Business Angel activity. Namely that returns are 5:4:1 (5 companies fail, 4 repay the investment and 1 is a star returning ten times the investment). Here are the results from two recent reports on angel activity and the results from the UK & USA. Do they conclude with the same ratio? Answer: I don't think so – better or worse? Read on to find out more...
There is only one Unique Selling Proposition. It could be many things. For example, if it is price, what are the implications for the product or service going forward? What does this tell you about the market place? Would this make an attractive investment proposition or not?
I’ve seen a large number of business plans which make a couple of mistakes when it comes to USPs. The most usual mistake is not understanding the term. One of the definitions from dictionary.com is “existing as the only one or as the sole example; single; solitary in type or characteristics.” That is, there is only one unique selling proposition. Have more than one and it suggests that the author of the plan is “hedging their bets” and hopes that one will resonate with the reader.
The second mistake is in the choosing of the unique element. An example is “Price”. If the only thing that is special about the product or service is that it’s cheap then I know that we’re in a commodity market. That is, there is lots of competition with similar products and the only way that this new product will get new customers is to be cheaper. Usually the price of the competition will be set by development costs, support costs, production costs, etc. If you’re a lot cheaper, how can you support all these costs? Will the competition be worried? No, they know you can’t provide the backup to make your sales. Of course, there is the rare case where there is excessive profit being made by all the competition who are acting in collusion.
A unique selling proposition is something that marks this product or service as different from the competition, is memorable and easy to articulate. In fact, it is the one liner that gets people to buy the product and allows them to talk about the product with the friends. Some of the great ones include “Melts in your mouth, not in your hand” (M&Ms in USA, Minstrels in the UK) and “You get rid of dandruff” (Head & Shoulders, although later this became an issue because some assumed if you use Head & Shoulders you have dandruff!).
So next time you read a plan or write one, think carefully when you come across the word “unique”. Does it demonstrate “woolly” thinking by the author?