Discovering the Strength in Your Unique Value Proposition (UVP)
Do you know your company's unique value proposition by heart? That tells us you may be in sales. But -- does the rest of the company know it?
Despite what consulting firms pitch, your business model doesn't need a Unique Value Proposition (UVP). Many businesses start without a UVP and are just fine – for now. As your company grows, the UVP becomes the true north – the rubric that business decisions are made against. However, if you want to have a successful business, you need to offer customers something they can't get anywhere else. Something unique. Something of value.
This uniqueness can be just one thing, such as having the fastest edge web servers, or it can be a combination of product and service features, like our email marketing platform. Any differences in your offering compared to your competitors equate to your unique value proposition.
Each market is crammed with products and services, but most every market has one or two dominant players. How do they rise to the top – rather, how did they rise to the top? What are they doing better than anyone else? Many times the unique value prop has to do with how that company entered the wide blue ocean – it’s the context of the strategy that influences their success.
Companies like Apple, Tesla, Amazon, and Airbnb have captured a large market share by offering customers something they can't easily get anywhere else. Most of the market leaders don’t sell cheap products. Differentiated offerings come at a premium -- and people are willing to pay a higher price if a company delivers a unique solution to their problem.
What is a UVP and Why is it Important?
Your UVP (unique value proposition) sets your company apart from others and makes you more attractive from a customer's point of view. It describes the benefits that your company promises your customers. It’s not rocket science either.
“We help (x) to (y) by (z)” Steve Blank
A value proposition is the added value and benefits that customers receive from your product or service. Ultimately, the value proposition is defined by satisfying existing customer needs. So, for you to create an effective UVP, the needs of your intended target group must be clear.
“Another way to understand customer needs is to think of them as jobs to be done. By aligning your company with jobs to be done, you can tailor your offerings to deliver value to your customers, achieve differentiation in the market, and avoid disruption.” (Harvard Business School)
What Are the Components of a UVP?
Before you craft your value proposition, you first need to have a very clear idea of who our customers are. Your business needs to shape your UVP around the needs of this specific market. You must identify key demographics, such as generational, marital status, or home ownership, and then design your value proposition to speak to that market.
Three steps in the creation of a unique value proposition are:
Identifying a specific problem being dealt with by a specific target group.
Articulating how your product or service solves that specific problem.
Communicating the target group's specific intangibles and benefits of your solution.
“In order to create value for the customer, companies need to provide personalized offers and differentiate themselves from the competition. Personalization is the key to perfect customer communication, so customers feel valued and understood.” (Andrews Wharton)
Identifying Strong UVPs -- What Does Success Look Like?
There was a memorable saying in the heady days of the dot-com boom: “Learn good website design by looking at bad website design.” Perhaps a better way to know what a great UVP looks like is to analyze companies that have great UVPs.
Here are two examples of companies with amazing UVPs: Apple and Slack.
Apple’s iPhone value proposition is “offering a unique experience.” They reiterate their value proposition on their websites, in product information and packaging, everywhere. Not only the design of their devices and ease of use, but the aspirational qualities offered to the user have been central to Apple’s design.
Apple says it believes a phone “should be more than a collection of features.” Isn’t that exactly what a smartphone is? It is the aspirational messaging that is Apple’s value proposition. Not the device is central to the UVP, but what can customers achieve with it?
“Every iPhone we've made — and we mean every single one — was built on the same belief. That a phone should be more than a collection of features. That, above all, a phone should be absolutely simple, beautiful, and magical to use. It should have hardware and software that were designed to work with each other.” (Apple.com)
Simplicity lies at the heart of Slack’s value proposition, too. Their premise “find anything, anywhere, anytime, from any device” is something Slack users routinely ooze over. Their motto “Be Less Busy” is the company’s value proposition cleanly summarized into three small words.
When we think of collaborating at work, we might begin to twitch. It’s a pain point, right? Slack’s messaging basically addresses every one of those pain points you can think of. It then goes one step further by simplifying them
Check out their website, slack.com. “Choose how you want to work.” “Bring your team together.” “Move faster with your tools in one place.” You get an almost immediate feeling of relief.
“A UVP or USP is not a slogan, catchphrase or positioning statement. Instead, it describes your value, to whom you provide that value and what makes you different from your competition.” (Inc.com)
Designing Value Propositions for Your Business
The process of value proposition design enables you to go head to head with a challenge that faces every business -- not only yours. It enables you to develop products and services customers want to buy. Not need to buy. Want to buy.
A Value Proposition Design ensures that you always keep your customers in focus during the development of your service offering. The keyword here is customer-centricity.
What Questions Should You Ask Yourself?
From the customer's perspective:
What problem does the customer need to solve?
What benefits the customer? What added value do they expect?
What tasks does the customer have to solve?
From the perspective of your solution:
What problem does your service offer to solve?
What exactly is the nature of your offer?
What benefit / what value does your service offering provide?
Without a unique value proposition, your customers won’t be able to establish a relationship with you, nor be able to identify with your product or service. This in turn tends to be disadvantageous, because customers then go by which offer can be purchased at the lowest price.
Unique Value Proposition Example for a Web Hosting Company
A company offers cloud web hosting services. The company identifies three unique value propositions: speed, security, and reliability. These terms sound a bit vague and probably won’t raise any excited customer eyebrows. They should be translated into concrete benefits for the customer.
Question: What is the benefit of these features for the customer? What do they gain from them?
Feature 1: Speed
Benefit 1: website loading speed means your website will be given the green light by Google, and people won’t wait for it to load. That waiting can mean a loss in online sales.
Feature 2: Security
Benefit 2: data protection, eCommerce purchasing trust and reliability, and a website that will not be hacked. Do we need to say anything more?
Feature 3: Reliability
Benefit 3: businesses spend time with their clients, and don’t have time to worry about their website. It needs to be open for business around the clock regardless of location and traffic. Reliability is peace of mind.
Finding the "Why" for Your Future Clients is One of the Pillars of Your Success.
What's Your Value Proposition?
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