There are over 30 million small businesses in the U.S. alone and competition for attention is fierce.
You only have a few seconds — at most — to capture the attention of your website visitors. A compelling unique value proposition is a powerful way to do that, and to increase conversions.
- What is a UVP?
- What Are The Elements of a Good UVP?
- How to Create a Winning UVP
- The Big Picture: Value Propositions and Strategy
- Popular Tool: The Value Proposition Canvas
- Examples of Compelling UVPs
- Frequently Asked Questions
What is a UVP?
A UVP (unique value proposition) is a succinct statement that describes the unique benefits your company offers and explains how those benefits make you a better option than your competition.
The two following definitions will help you get a firm grasp on what a UVP is.
Chris Goward of WiderFunnel digital agency defines a UVP as:
[A] cost vs. benefits formula that is evaluated subconsciously and automatically in your prospect’s mind when they encounter your marketing touchpoint.
Motivation = Perceived Benefits – Perceived cost
If your perceived benefits outweigh the perceived costs, your prospects will be motivated to act.
Peep Laja, the founder of ConversionXL, says:
In a nutshell, a value proposition is a clear statement that
- explains how your product solves customers’ problems or improves their situation (relevancy),
- delivers specific benefits (quantified value),
- tells the ideal customer why they should buy from you and not from the competition (unique differentiation).
(UVP is sometimes used interchangeably with Unique Selling Point or USP.)
Now let’s talk about why your UVP matters for your business.
Video: Peep Laja, founder of ConversionXL, discusses why unique value propositions are so important and how you can write an effective one.
Why is a UVP important?
Your businesses’ unique value proposition should explain why you are the best solution to the problem your customers are facing.
Here are a few reasons why UVP is so critical to the success of your business.
Your Business Probably Isn’t Unique; Your UVP Is
Customers have many options when it comes to finding a business to solve a problem. In our fast-paced online world, it is unlikely you are the only product or service provider in your niche. (Some businesses like Cirque du Soleil create their own niche.)
Your UVP helps you stand out by putting your selling point front and center.
Garner Goodwill (and Good Reviews)
Your UVP is the yardstick by which customers measure their satisfaction with your brand. Your UVP tells them what to expect from you. Did you live up to your promises?
If you did, customers are going to feel good about working with your brand, and are more likely to leave positive reviews.
Increase Conversion Rates
Establishing a solid UVP (and using it to inform all your content) can increase conversion rates without requiring additional marketing spend.
Creating your UVP forces you to hone in on:
- What your business does
- Who you do it for
- Why you are the best choice
Deploy this information on your homepage, landing page, and other sales materials.
Doing so is one of the most important factors when it comes to conversion rate optimization.
Set The Tone for Internal Culture
Your purpose and your goals should be reflected in your company culture.
If your UVP is that you offer fast, personable service, then this idea needs to be reflected in how you treat your team and the tools you give them to do their jobs.
What Are The Elements of a Good UVP?
The right UVP for your brand will depend on a variety of factors, including:
- Your business model
- Target audience
- Type of product or service you offer
However, there are a few features that every UVP should have, no matter what type of business you are in.
Short and Concise
A good UVP should be direct and clear. Don’t wax poetic about how awesome your business is. Instead, keep it between 10 to 30 words.
Consider using a heading/subheading format for longer UVPs to keep it concise.
Hiring tool Proven uses the heading/subheading feature to squeeze more information into their UVP.
Avoid Marketing Speak
Your UVP should be clear, which means avoiding superfluous language, insider industry terms, and buzzwords.
Use the active voice and simple words.
Highlight Benefits to The Consumer
Your goal is to explain your why product or service is better than your competitor.
It’s All About “You”
To do this, use language focused on the customers. For example, avoid saying “I” or “we” and use “you.”
Include differentiators like the speed of service, high quality, and whether your product or service is customizable.
What is a UVP not?
Unique value propositions are often confused with other statements or phrases used in business plans or marketing copy. Here are a few other statements UVPs are often confused with and why they are different.
Slogan or Tagline
A slogan or tagline is a very short, memorable statement used to condense a brand’s mission or appeal. While they may include part of the UVP, they can be unrelated. Examples include Nike’s “Just Do It” or Home Depot’s “More saving. More doing.”
A mission statement outlines a company’s overall goal, the type of product or service they offer, who their primary audience is, and where it operates. It may include aspects of the UVP, but it is a more in-depth statement than a UVP. Take, for example, Cradles to Crayon’s Mission Statement:
Cradles to Crayons: Provides children from birth through age 12, living in homeless or low-income situations, with the essential items they need to thrive – at home, at school, and at play.
A positioning statement is a statement that outlines who your target audience is and how you want them to perceive your brand. Positioning statements may be created for a brand as a whole or before the launch of a new product or service line. Gurulocity offers a succinct example of a brand positioning statement for the health care line Avenno.
- To: Women who believe nature has the power to enhance health and make life beautiful
- We are a brand of: Skin and hair transformations
- That provides: naturally healthy skin and hair
- So that you feel: naturally beautiful
- That is unlike: conventional skin and hair brands.
- We have/do/are: Selected from nature to deliver safe and effective skin/hair benefits, proven by rigorous scientific testing, and recommended by professionals.
A positioning statement includes much more information than a UVP, though it may include similar elements.
How to Create a Winning UVP
Ready to create your unique value proposition? This section will give you step-by-step instructions for creating an effective UVP.
Research Your Buyers
Before you draft your UVP, you need to understand who your buyers are and what their motivations are. There are several ways to get this information, including:
- Interview your current buyers using an online survey, such as Survey Monkey, Google Forms, or Typeform. You can send the link out in a newsletter and even use a prize to incentivize participation.
- Study your social media data. Facebook and Instagram both offer Insights that provide demographic information such as age, interests, and locations.
- Look at Google Analytics. There is a wealth of information about who visits your site, where they are, and what actions they take on your site. Not sure where to start? The Complete Guide to Google Analytics covers everything you need to know.
Create a Buyer Persona
Once you have this information, you need to put it to work by creating a buyer persona, which is a fictional profile of a member of your target audience. Buyer personas often include a name, age, job description, likes and dislikes, and even details such as what type of coffee or tea they might drink.
HubSpot has an in-depth buyer persona generator that makes it easy to turn the data you’ve gathered into actionable insights.
Research Your Competitive Differentiators
A successful key differentiator must be important to your clients and provable. Here is how to uncover what your competitive differentiator is.
- Analyze your competition. Look at online reviews and other easily accessible customer feedback to see where they fall short. Does shipping take too long? Does their customer service take days to respond?
- Map your customer’s experience. How do customers find you? What goes into their decision-making process? Is there a place in your funnel where leads often drop off? How can you remedy the issue?
- What is in it for them? Chris Goward, author of You Should Test That recommends starting with the simple WIIFM (“What’s in it for me?”) question thought through from the customer’s standpoint.
- List out the benefits of your brand. Do you offer a more efficient solution? Better shipping? Better service? Less hassle?
Following the steps above will give you a list of several key competitive differentiators, now you need to hone in on which are the most important to your customers and help you stand out the most.
Examples of key differentiators include:
- Lower price
- Higher quality
- Faster or cheaper shipping
- Faster or a higher level of service
- Focus on a specific geographical location.
- A money back guarantee or other warranty
- A higher level of education or credentials for service staff
- Use or offer unique information, stats, or data no one else has access to
- Specialize in a specific customer niche, for example, do you offer services designed specifically for solo-businesses?
- Offer a truly unique product or service. What benefit does your unique system/product provide the customer?
Draft Your UVP Statement
You have done all the legwork; now it is time to draft your unique value proposition statement. Here are four questions to ask to create an effective UVP.
- What is your product or service?
- Who is the target audience (refer to your research)
- What’s the benefit to the customer? (refer to the bulleted list of differentiators above)
- Why should they pick you over the competition?
Here is a template, based on the template form Geoffrey A. Moore’s book Crossing the Chasm. It is basic, but getting the first draft down is just a first step.
For (target customers) who (the problem they want to solve or need), our (company name) is (product/service category) that (key differentiator/benefit).
Here is an example:
For solo business owners in the digital market who need a simple way to track expenses, our (company name) is an app-based expense tracking tool that makes it easy to track expenses right from their mobile device to make tax time easier.
Revise and Test the Statement
Don’t stop with the first statement; your next step is to revise and test! Remember, an effective UVP should address a benefit to your customers, so you need to know how your customers react to the statement. There are a few ways to do this.
- Get feedback from individuals who match the target audience through a survey.
- Split your email list and test on UVP on each segment.
- Perform an A/B test online using a tool like Optimizely, which allows you to run two versions of the homepage, each with a different UVP.
Before testing, write out a hypothesis for the “experiment.” Creating a hypothesis will help you track your results and get a better idea of what is actually working and what needs to be changed.
Here is an example of a hypothesis:
“Using a homepage headline that spells our UVP with benefits listed as bullet points below it (but above the fold) will reduce bounce rate and increase sign-ups for our service.”
The Big Picture: Value Propositions and Strategy
In the How Strategy Shapes Culture, published in the Harvard Business Review, W. Chan Kim and Renée Mauborgne suggest that a value proposition is one of three key propositions every business needs to be successful. According to Kim and Mauborgne, your business strategy should include these three elements:
1. A value proposition that attracts buyers.
2. A profit proposition that enables the company to make money out of the value proposition.
3. A people proposition that motivates those working for or with the company to execute the strategy.
This value proposition is created for internal use: it’s for your company.
Once your strategy components outlined above are completed, you will distill the value proposition into a short UVP statement for the public.That UVP will be displayed in your digital and print channels.
Likewise, if you already have a product idea and are working on your UVP but having difficulty, you may want to consider whether your main value proposition (which your UVP is based on) makes sense. If not, consider brainstorming it again.
Popular Tool: The Value Proposition Canvas
The Value Proposition Canvas is a popular tool and process for creating winning value propositions.
At the outset of your business planning, you can use it to design compelling products or services that mesh with your target audience’s needs and desires.
It was created by the team behind Strategyzer, which was founded in 2010 by Alex Osterwalder and Alan Smith. The tool aims to “help you to design products and services your customers want.”
The canvas itself is quite simple, to get the full value you will need to take some of their training courses to understand how to use their methodology. Here’s an overview of this popular tool:
As you can see, the canvas really focuses on how the product/service you are selling connects to the customer’s needs, which is one of the most important aspects of an effective UVP. You can get a free download of the canvas itself here.
Mastering Value Propositions
The creators also provide an online course called “Mastering Value Propositions.” You need to create a free account to view this course.
The course covers five main topics:
- Map Your Value Proposition: This shows you how to use The Value Proposition Canvas tool.
- Check for Fit: This section walks you through how to asses whether you are really creating value for your customers
- Assess the Competition: Just because your customers might like it doesn’t mean the market will support it. This section helps you asses your competition.
- Improve Your Idea: Now that you can see where the holes are in your UVP, it is time to fix them. This section helps you “plug the holes.”
- Test and De-Risk: This section offers tools and an experiment library so you can see how your UVP will work in the real world.
There are quite a few free lessons available. However, to complete a course you will have to pay a fee ($499) to unlock the final lessons. That might seem pricey, but they offer a lot of value before you ever have to spend a dime, so you will know if it is worth it before you buy. And getting your value proposition wrong, could be very costly.
If you are hesitant to invest that much time or money, their free mini-course of six emails is a good way to ease into it.
Strategyzer also offers a number of other great training and resources to help you build a business.
There are also a few series focused specifically on UVPs.
Examples of Compelling UVPs
Ready to see what an excellent UVP looks like in the real world? Here are a few examples for inspiration.
X.AI’s is an artificial intelligence assistant that can schedule meetings for you. Their powerful UVP hits a customer pain point right between the running lights: “Scheduling sucks.” X.AI uses only 2 key words to describe their software: “ridiculously efficient.”
Ecwid is an e-commerce tool for small businesses who want to start selling products on their website. Their UVP is incredibly short, but to the point: “Start Selling Online for FREE in 5 Minutes.”
It is short, but their UVP shares quite a bit of information: Ecwid is an e-commerce tool, it is easy to deploy, and you can get a free plan or at least a free trial. This is an excellent example of a simple UVP.
Freshbooks offers small business accounting tools, including invoicing, tracking, and reporting. Here is their UVP:
“Small business accounting software that makes billing painless.” It is longer than the previous example, but still tells the prospective customer quite a bit. The subheading below gives even more details, including a focus on security and ease of use.
Dazzling Cleaning is an online tool for booking home cleaners. Their UVP focuses not so much on the cleaning itself, but how easy it is to book a cleaner. Sometimes your UVP can include a surprising feature that intrigues your prospects, which is why researching and assessing your competition is so important.
Fiverr is a platform for finding and hiring contractors for a range of tasks, including design, digital marketing, writing, and more. Take a look at their UVP; it is a fantastic example of keeping it short and sweet.
This UVP is focused on what their ideal customer is trying to do: build their dream. The actual service is only mentioned in the subheading.
Frequently Asked Questions
Got questions about UVPs? Below, we answer the most-frequently asked questions about UVPs. Have a different question? Feel free to add it in the comments section below and we’ll answer it.
What is a customer value proposition? Is it the same as a unique value proposition?
A customer value proposition covers all the benefits to your customer. For example, you offer 24/7 support, free shipping, and ethically-sourced products. Those are all the values your customers can expect. The unique value proposition focuses on the one benefit that matters the most.
You now have a detailed understanding of what a UVP is, what it isn’t, why it matters for your business, and how it relates to your business strategy.
We’ve also given you some valuable methods and online tools for finding and testing your brand’s UVP.
Now it is time to get started! Don’t forget to test!
What Next? Some Recommended Reading
If you’re working on your UVP you may just find these articles and tools very helpful.
The first 3 are from Dale Cudmore. Dale has a gift for simplifying processes involved in launching a business. He’s owned — and sold — several businesses of his own.
The last one is a gem list of solid business ideas from Matt, the founder of this website. These are rated by revenue potential and ease/difficulty. You’ll also get a free downloadable One-Page Business Plan and Getting Started Checklist. We even included ideas for stay-at-home parents, college students, and kids.
We try to think of everything when it comes to making it easier for people to become entrepreneurs!
What’s Your UVP? We Want to Know!
We’d love to see your UVP. Why not share it with us — and Digital’s huge readership — in the comments below?