Options at a glance

The USP in circular business models

What influence do societal and economic changes have on the fixed USP of companies? What are the unique selling points of circular business models? Sustainability via multiple use, or the uniqueness of the products? What role do digital experience and service diversity play in this? A roadshow on possible options.

May 17 2021

Rosser Reeves 

Originally defined in 1940 as a "sales promise" by the American advertising expert Rosser Reeves, it developed into today's marketing term of the Unique Selling Proposition/Point (USP). He fixed three main features in his book "Reality In Advertising" in 1961: 

  • Every advertisement must make a proposition to consumers, offer an advantage. 
  • The proposition must be unique, stand out from the competition 
  • The proposition must be strong enough to persuade and win over customers  

What began with Rosser Reeves has undergone changes in the meantime, but the basic structures of the concept at that time still exist in marketing theory and are currently applied in the MBA programmes at Harvard Business School in Cambridge, for example. 

In this article, however, we do not want to delve into the theoretical foundations. We want to look in detail at the effects on the USP and its design possibilities in the context of the Circular Economy with changing business models or new business models. 

Not set in stone 

Business is like love. In the case of change, what is already in place must be examined to see if it can continue. You have to be prepared to look for alternatives. And have the courage to go new ways. Otherwise it's like in the song by Del Amitri - "Driving With The Brakes On". 

This also applies to the USP of existing companies. Changing or expanding the business model can have an impact on the USPs that have been fixed up to now. If the transformation of the business model strengthens the existing USP, then the customers should know about it. Appropriate communication must take place, otherwise the potential will remain untapped. 

Perhaps one's own competition is carrying out the same development, but previously had a worse market position, adapts its USP strategy, gains attention and passes by. A result of the review may also be that the previous USP no longer fits the new orientation. Either way - action is called for. 

What options exist for USPs in circular business models and how Rosser Reeves' criteria can be applied to them - A look at possible scenarios. 

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Measurable sustainability 

Being sustainable is an imperative for any company, regardless of its business model. And for circular business models it is a prerequisite. Giving sustainability a face and developing the USP from it, a multi-layered option exists via circular products - also for the furniture industry. 

  • Design: The task - how can resources be kept in the cycle? Product design starts here and must be thought through for all the following elements. 
  • Production: How can raw materials and materials be used in a way that conserves resources? How can ecological production and processing be achieved, including the handling of chemicals? 
  • Use: Are the requirements for multiple use and long life cycles met? What possibilities do the products offer for rental or product-as-a-service? 
  • Refurbishment/Re-Manufacturing: The focus here is on the options to be created for maintenance, refurbishment or rebuilding. 
  • Upcycling/Upgrading: How can repetitive or new usage processes be created? Which interfaces need to be integrated?
  • Recyling/reclamation. How is material separation and recovery conceived and transferred back into the design and production processes?   

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Many approaches to design the unique selling proposition via circular products with a transparent face of sustainability. One option could be the design of modular furniture offers. Certified seals and labels such as "Made in Germany" are supportive and create trust. 

Digital experience 

What applies to sustainability also applies to digitalisation. Digital structures are a prerequisite for competitiveness and a compelling necessity for interacting with customers. Designing digital experiences in customer journeys is an option for a USP in circular business models. They are the salt in the soup of online and social media strategy. 

A unique position can only be achieved if, in addition to transparency, security and simplicity in communication with customers, one thing is always in the foreground - innovation. Especially in the digital world, there are permanent changes due to customer requirements and new offers. Adapting the needs and creatively designing new experiences is both a challenge and an opportunity. 

A possible example for the industry

Online trade is booming. Customer acceptance is increasing. However, even with circular business models, the journey often ends in the familiar pattern of the online shop. What if customers could be personally greeted in the online shop and accompanied through the virtual showrooms? What if the entire process of selecting, paying and shipping is integrated? 

On the other hand, brick-and-mortar retail suffers, there is still too much lack of innovative concepts in the stores. What if customers were to encounter a shopping world designed from real and virtual products? Customer relations could be completely redesigned. 

What is possible - and has long been implemented in other industries - is shown, for example, by Microsoft with its new tool Mesh. What influence will such technologies have on our shopping experience in the future? If we use AR technologies - will we shop differently and in a more targeted way because we were more selective before? We could make better use of our resources and drastically reduce waste and returns. A possible USP approach to circular business models via designing digital experiences. 

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Service First 

Thinking in terms of service, putting services first and integrating products - definitely an important element for circular business models. The implementation of servitisation has already been written about in detail here. 

How can a USP be developed from this? Subscription models are the way to go. They create a variety of touch points with customers and offer new possibilities for creating customer proximity. However, a unique selling proposition can only arise from this if the offers generate real customer benefits. Therefore, the subscription approach must be thought through further.  

Two possible examples of a service USP via subscription expansion: 

1. Status Quo - Service offer for office furniture for use by B2B customers.

  • USP - Flat rate for defined customers, for example coworking.  
  • Basic Rental 

2. Status Quo - Service offering for living room/bedroom furniture for use by B2B customers

  • USP - Rental payment only on booking/occupancy, for example serviced flats.  
  • Basis Product-as-a-Service 

Service - the home base for USPs in circular business models.

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Thought Leadership 

How do you define your USP with new business concepts in an existing market? How do you achieve acceptance and create trust among customers when everything is new and still unknown? What role does existing expertise play in this? When building circular business models, this question arises for companies. Regardless of whether one is already active in the respective sector or is starting up. 

Taking up the role of thought leader, with existing experience and new ways of thinking - with the right mix. Perhaps the most interesting option for a USP. 

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Andre Hempel Senior Management
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