What is a unique value proposition?
Your unique value proposition (UVP) is a clear and concise statement of what your business does and how you distinguish yourself from the competition. Explained simply, your UVP should tell your customers and potential investors why they should do business with you instead of your competitors. What value can you bring that no one else can? It is crucial for one simple reason: You need to stand out and be unique.
Why does it matter?
Unfortunately, many businesses either bury their value proposition in buzzwords, meaningless slogans, or they don't bother highlighting it on their site and in their marketing campaigns. Or even worse: they don't figure out what it is at all. It's a vital part of your external communication, and you should always make sure that it's the first thing your visitors are presented with. Potential customers shouldn't have to read your entire website or talk to you or your employees to determine why they should buy your product. Most likely, they won't. That's why you've got your UVP. It gives your customers a reason to buy your product in a matter of seconds. It clarifies both yourself and potential investors how your business will compete in the market and why your product or service is adding value.
An example from Uber: "Tap the app, get a ride. Uber is the smartest way to get around. One tap and a car come directly to you. Your driver knows exactly where to go. And the payment is completely cashless."
This UVP simply states that they can facilitate a ride through their app and meet their customer's needs by making it easy and time-saving. They distinguish themselves from their competitors (in this case, traditional taxis) because the driver knows where to go – and that you don't even need to bring your wallet. It's simple and concise.
💎 How do you define your unique value proposition?
You don't need a marketing degree to create a unique value proposition for your startup business. It's pretty simple: It's merely the goal to formulate how your business contributes to your customers in a way that your competitors don't. Here are a few simple questions you need to answer to create a convincing UVP:
- Who are your customers? Be very clear about who your customers are.
Hopefully, you already have a good idea about who your customers are, but narrow it down and be as precise as possible.
- What benefits does your product offer your customers? And what value do those benefits bring to your customers' lives?
Make a list of all the benefits your product contributes and translate them into what value they bring. In this case, 'value' is based on what it improves in the customer journey compared to existing market options. In the case of Uber, their solution was both trouble- and time-saving for their customers. That's value!
- Who are your competitors? And how do you differentiate from them?
Find out what you do better than your competitors. It can be features, environmental benefits, outstanding customer service, better design, etc. A great tool to get an overview of your competitors is to make a Competitors Matrix.
When you've answered the questions above, it's time to put yourself in the shoes of the world's best advertisers and boil your list down to three simple sentences that present your unique value in a distinctive and meaningful way. Be creative, and make it sound good!
Here is an example from Apple: 🍎
"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".
Elegantly, Apple tells us that they made a phone with an extensive collection of features, yet it is simple to use. They distinguish themselves from competitors by design and user experience. That is their unique value proposition.
Your market is ever-changing, and your unique value proposition is, therefore, something you should reconsider accordingly. When Apple first entered the smartphone market, their unique value proposition would've determined the new technology and the number of features compared to the traditional mobile phone. As the market changed and their competitors began to make smartphones, those features were no longer unique values, but instead their beautiful design and easy-to-use interface.
Remember, if you can't identify and extract where your concept delivers value, that is a strong indicator that it doesn't – and in that case, it probably won't fly. In that case, you should consider pivoting your startup in another direction. Now you know what a unique value proposition is and why it's crucial to formulate it. Good luck writing yours!