The key to success in your market is differentiating yourself from your competitors. Many companies may offer the same as you and deliver it in a similar way, so why should someone choose you over them? You need to create a unique selling proposition (USP) or a unique value proposition (UVP) to make yourself stand out in the market and give customers a reason to come to you.
USP vs. UVP – What’s the difference?
Both concepts serve a similar purpose, but what is the difference between them? Your USP is, essentially, something that your business does that no one else does, something your products have that no other products have, something your service is that no one else’s service is. If you offer the cheapest prices, your products are good for the environment, or your customer service is the fastest around, these are all unique selling propositions.
Your UVP, on the other hand, focuses more on the value that your business provides its customers with, rather than focusing on the features of your products or business. Your UVP tells your customers why they should buy your product based on the value they will receive from it. For example, your smartphones may be made with the strongest titanium alloys, but what does this mean for the customer? Your UVP could relate to the fact that you sell smartphones that are tough enough to withstand falling out of your pocket.
How to identify your USP and UVP
Defining your USP and UVP should go hand-in-hand because, for a strong strategy, the two should interlink. Your USP should communicate your UVP to your target market using language they understand and that resonates with them.
Sit down with your team and brainstorm ideas about what is unique about your company, your product or your service. Consider your target market. Hopefully, you already have a clear idea of who you are targeting. Think about who they are, what they want and what motivates them. How does your business satisfy their needs or solve their problems? How will your customers benefit after buying from you? And, how is this different from if they were to buy from a competitor?
Having a deep understanding of your audience will not only help you to determine what is unique about you that they will value, but will also give you a good idea of how you can effectively communicate this concept to them. Think about what language they use and what they will identify with.
A valuable value proposition
When identifying your unique propositions, you should also concentrate on what will benefit you in a sustainable way. For example, selling yourself as the coffee shop with the lowest prices may draw in lots of business at first, but will it ultimately be profitable for you? You may find yourself in a price war with a local competitor, where the two businesses are constantly lowering their prices to compete with the other. At the end of this, both businesses lose out because they are not charging enough to make a worthwhile profit.
Another consequence of this strategy is that it might have a negative effect on how people perceive your value. Cheap prices are often associated with poor quality products. Even if this is not true for you, people may start to wonder why your prices are so low, and make assumptions about the product or service you are offering as a result.
It might be that you and your competitors are extremely similar, so you will need to have a serious think about what your customers value the most about you and what you can offer them that no one else can. MindTools provides a useful process to follow to identify your USP, along with a handy worksheet to download.
A marketing strategy that involves a strong, interrelated USP and UVP can really help you to stand out from the crowd and attract more and more customers to you.