If you’re conversant with business lingo, you must have encountered the term Unique Value Proposition more than a few times before. Maybe you’ve even nodded every time you heard it mentioned in passing by some business executive or marketing expert. But do you really know what it’s about? And, you might ask, why should you be bothered about what appears to be one more fancy sounding phrase from corporate speak?
Here’s why it matters: without it, you aren’t likely to stay in business for the long haul, let alone grow and thrive. It’s that important.
What is a Unique Value Proposition?
A Unique Value Proposition is the peculiar thing about your business or the products and services it offers, that makes buyers choose it instead of your competitors.
In other words, it’s the characteristic your business has that stands it out from among its rivals and causes its customers to keep coming back. It’s the promise made by a brand to its would be clients, which differs from what similar brands offer, and attracts people who would have otherwise stuck with those other brands.
For example, your customers may be using your food delivery service because you have a reputation of getting it to them on time. Or they may be keen on your car rental services because you give periodic discounts and certain extra perks to people who hire your vehicles often.
Note that this isn’t just about being different from other businesses operating in the same space; it’s about giving customers something they’ll value, which other businesses in that competitive landscape aren’t giving them. Your Unique Value Proposition may be the quality of your product (or an aspect of it), its reliability, the strength of your customer service, or a myriad of other things involved in the business-to-customer relationship.
Why you need a Unique Value Proposition
Let’s backtrack a bit. We’ve said that if your business doesn’t have a Unique Value Proposition, it’s very likely to struggle – and fail. Just in case you aren’t convinced of this, here are a few points to consider.
- Today’s consumers are very picky. They’ll have to be convinced that they’re getting full value for their money (as they define it) before they buy your products.
- This is partly because there are so many competitors, product alternatives to choose from.
- Product marketing is more sophisticated and targeted than ever before.
- The online space in particular is a challenging turf. Because of the multiplicity of options presented via ads on social media and other sites, customers have grown accustomed to tuning much of them out. They won’t take a second look at a product on display on Instagram or ecommerce sites unless they recognize that they might need it.
In a nutshell, you’re up against competitors seeking a bigger market share; choosy customers with short attention spans; and a digital world that isn’t forgiving of businesses which don’t clearly tell why users should buy their products. You need a Unique Value Proposition to get your target audience’s attention, attract them, and keep them loyal to your brand.
How to create a Unique Value Proposition
Follow these steps to craft a Unique Value Proposition.
- Find out what customers want
No matter how wonderful you think your product or service is, don’t make it your offering unless your customers will want it. And you can’t just assume that they’ll want it.
Talk to your customers. Ask them what they’d like to see in your business that you aren’t currently giving them. Depending on the nature of the business, you could seek their opinions by having random on-to-one chats with them, or by conducting surveys. Whatever method you use, your aim should be to capture a representative sample of views, in order to properly capture the thoughts of your general customer base.
This leads us to something closely related: market segmentation. You might need to define your target market as a first step, instead of just trying to please everyone. This is based on the idea that different groups of people want different sorts of things. Don’t just try to put people into age groups or income brackets. Try to find out what motivates their buying decisions (it could be aesthetic tastes, the need to belong, moral persuasion, etc). Figure it out, and see if you could incorporate it into your product and marketing message.
- Watch what your competitors are doing
In order to have a Unique Value Proposition, you will have to be doing something your competitors aren’t either already doing, or improving on their existing offers. So you’ll be creating a new niche for yourself, or raising the bar in one that is already present.
The way to do this would be to watch what your competitors are doing. What parts of their business model is under-performing? In what ways can their customers be better served? You could even ask their customers (covertly, of course) what they like and don’t like about those business’s products or services. The answers they give could be useful to you in framing your Unique Value Proposition (UVP).
Another way to understand your competitors’ strategies would be to study their marketing efforts. How do they portray their products? Are people drawn by the messaging? What’s the reason for the sort of response they give (whether it’s positive, negative or just flat)? Do they deliver on their promise?
- Decide what you can accomplish
Having looked at what your customers need and what the competition is offering, the next question should be this: can you close the gap between those two? Do you have what it takes – time, finance, personnel, material, the right external conditions, etc -to get it done? If you don’t, can you (and how will you) acquire them?
You should have a plan in place to help you deal with this.
- Create your Unique Value Proposition
Whatever you decide your UVP will be, you should emphasize it as frequently and via as many channels as possible. It should reflect in your mission statement, your company’s branded material, and in your slogans and marketing campaigns. And, more importantly, you should make it a concrete reality, a promise you’re able to consistently fulfill.
Note that market feedback might suggest the need to fine tune your UVP. Don’t ignore the signs. Adjust things as conditions demand.