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If you’re starting your own business you’re probably already thinking about what sets you apart from competitors in your space. Coming up with your unique value proposition (UVP) or unique selling proposition (USP) creates a strong foundation for all your marketing messages and strategies for engaging new customers.

This article is a handy guide that will define what a UVP is, and help you write your own.

What is a unique value proposition (UVP)?

Your unique value proposition (UVP) is the promised value customers can expect from your business. It explains what separates your business from your competitors, how your solution solves your customers’ problems, the specific benefits, and why your target customers should choose you.

In a nutshell, your UVP covers: 

  • How your product or service works
  • What makes it valuable
  • Why it’s better than the rest

Your UVP should be front and center on your website, and it should be completely free of jargon—it’s like a very short elevator pitch that someone who has never heard of your company before would understand immediately.

What is the purpose of a value proposition?

Your value proposition is designed to introduce your company’s brand to potential customers. It defines what you stand for, what you do, how you operate, and why you should be chosen over the competition. 

Every competitor in your field is vying for attention. From marketing plans to advertisements, consumers hear a lot of noise. To cut through this clutter and turn your target audience into loyal customers, you need a value proposition that mere mortals can understand easily—and remember. You want your customers to hear your name and think, “oh, that’s the company that does (your unique solution).”

How do you write a unique value proposition?

Finding a value proposition takes some time and legwork. A real UVP is more than a clever tagline. For it to be meaningful, you have to know your customer and your business. Plus, you have to understand how your product or service fits into our consumer-driven world.

So while your UVP is probably always in the back of your mind, don’t write it based on what you think is true about your solution and your customers. Do some research and testing so that you are sure.

And for that matter, keep testing. Once you’ve come up with your UVP and put it all over your marketing materials and website’s landing pages, it might be tempting to set it and forget it. Keep testing it over time—the more your business grows, the more you’ll know about your customer’s pain points and how your solution helps them. Here are the five steps needed to develop a value proposition.

1. Define your target market

First, you need to figure out who your customers are. Who will buy (or is buying) your product or service? A lot of first-time business owners want everyone to be a customer; this is a rookie mistake. Marketing to everyone is the opposite of marketing to your target market. If you try to appeal to everyone, your business and product will get lost in the noise. An example of this kind of mistake is a shoe company trying to market to everyone with feet! You’ll waste a lot of time and money that way.

Instead, hone in on exactly who your audience is. Do some market research—both based on your existing customers (if you have them) and other populations you think might be good potential customers. You want to know and understand their pain points—the problems they have that you might be able to solve.

But you’re also interested in their demographic information, income statistics, and family makeup. How old is your target audience? Are they male or female? What kind of income does your target audience have? Get specific. What does your target audience do on the weekend? What kind of music do they listen to?

You might think these last questions are a bit far-fetched, but you want to create a buyer or user persona of your target audience. A buyer or user persona is a fictional representation of your ideal customer—but it’s a very useful tool to help you hone your messaging and who you consider to be a part of your target market.

You can’t create a unique value proposition alone in your basement, either. You have to test it. Run it by a small group of customers, or people you think are in your target market to ensure it resonates with customers you’re trying to reach.

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2. Explain why customers should buy from you instead of a competitor

To separate yourself from your competitors, you have to know who they are and what they stand for. Research your competitors inside and out, from their mission statement to the types of employees they have. You can only set yourself apart if you know what’s already been done.

Putting together a competitive matrix can be a helpful way to visualize how you stack up against them. Don’t make the mistake of assuming you don’t have any competition. Every business has competition, even if you’re in a brand new industry. When you’re writing your UVP, see if you can articulate why your customers should buy from you instead of your competitors in ten words or less. If you can’t, keep revising.

3. Define the pain point your product or service solves

Write down how your business or product solves a problem or alleviates a pain point for customers. Can your product do something that other products can’t? Does it save time? Is it more affordable than other products? What about your product or service makes it a must-have for customers—why can’t they live without it?

Take that list and cross off any need pain point that your competitors can claim to address too. Your competitive matrix might be helpful here. Below is an example of how a competitive matrix should look:

This exercise is meant to help you find areas where your business is different than others. Simply having the best product or the best customer service in the market isn’t enough differentiation.

Remember, every business thinks they have the best product. Take some time to figure out how your product meets the needs of your target audience in a way that others can’t.

4. Connect to your company mission and what you stand for

What does your business stand for? It’s a big question, one that takes some time to figure out. Once you have a solid and clear answer, see if your mission overlaps or coincides with the list of things that sets your business apart. Now you’re starting to hone in on your value proposition.

Once you’ve done your digging, write down a few different possible value propositions that fit your business. Again, this isn’t going to be something you whip up in 20 minutes. Write a few down, stew on them for a bit, and refine them. Ask yourself if someone could read your UVP and think it’s talking about another company. If the answer is yes, you have a selling or value proposition, but it’s not unique yet.

Rework it until you have one succinct sentence that makes you stand out from your competitors. What do you want your customers to remember about you when they hear your brand or product name?

5. Craft a single message

Once you’ve defined what you will cover in your value proposition, you need to land on a single core message. Not every pain point or benefit needs to be listed here. You’ve done the research to ensure you are landing on the right message for your audience, the last thing you want to do is overcomplicate communications

Focus on communicating one key value that connects to your customer’s pain point. The goal is to hook their interest so that they want to explore what else you have to offer. If they take that first step, then look for opportunities to elaborate on the additional value you provide.

Additionally, just because you’ve honed in on a core value proposition, doesn’t mean that it can’t change. You may need to make adjustments for sub-sections of your audience, change out keywords for different platforms, and even fully restructure your UVP if it doesn’t resonate. 

The key here is to not just write up your UVP and walk away. Look for opportunities to test it directly with your target audience either through interviews, surveys, or even through live testing. 

4 examples of great value propositions

One of the best ways to learn is by example, so let’s take a look at a few businesses that have created unmistakably unique selling propositions.

The Mast Brothers Chocolate

This duo of bearded, lanky brothers creates chocolate bars by hand. Their dedication to their craft alone is unique, but the brothers have infused their love of old-time traditions into their business.

When they need to purchase more cocoa beans, they charter a wooden sailboat to stay true to their pioneer-like roots. Now that’s a unique position you can market.

Dollar Shave Club

This online business sells and ships razors and blades to its audience for a buck. They poke fun at the fancy, vibrating 10-blade razors that are on the market today and encourage men to go back to basics.

But, don’t think that means they’re selling an inferior product. Their slogan is: “Our blades are f***ing great,” a tagline that points to (but isn’t the same as) their selling proposition. Remember, if other companies can also say their product is “great,” you have a catchy tagline, not something that sets you apart from the competition.  

Ellusionist

Here’s a business that created a value proposition by catering to a very specific audience. Ellusionist is an online store that sells playing cards to magicians.

Some of the decks are marked, others have a vintage appearance, but the variations are meant to build showmanship for its unique target audience.

Palo Alto Software

Shortly after publishing this article, one of our readers asked if we could share our own USP. Bplans is a resource offered by Palo Alto Software, so here’s what Noah Parsons, our chief operating officer, has to say about our UVP:

For Palo Alto Software, our goal is to provide entrepreneurs with the tools, knowledge, and know-how to help them grow faster and better than their competition.

We’re not just in it to make a buck—we actually want to help people succeed in business as much as possible. Our commitment to entrepreneurs is shown in our thousands of pages of free content that helps demystify the complexities of starting and running a business.

We also provide simple yet powerful tools for entrepreneurs so they can focus more on doing what they love and less on trying to build and understand complex reports and spreadsheets.

Create a compelling value proposition

The process to land on what differentiates your business and resonates with your audience is well worth the effort. Not only will it help you define a compelling value proposition, but it will make it far easier to streamline your focus as a business owner. Everything from developing audience personas to crafting and testing copy, it encourages you to work through the needs of your customer.

If you’re struggling to work through these steps the best thing you can do is revisit your business plan. It should have everything you need including the problem you’re solving, how your business operates, who your ideal customers are, and what your business stands for. 

*Editor’s note: This article was originally published in 2018. It has been updated for 2021.