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Tuning your unique value proposition (UVP)

Whether spoken in an elevator or written on the back of a napkin, one of the key indicators of a strong value proposition is that it lends itself to being articulated simply, clearly and very briefly.

But what is a UVP?
Why is it important to your business?
How can you "find one" for your business?
And can an existing company find a new UVP?

Let's start to answer these questions and help you apply the findings to your own business.

A unique value proposition (UVP) states the uniqueness of a business that sets it apart from all competitors. Without a UVP, a company risks becoming lost in a sea of similar businesses.

The UVP statement will often contain quantitative statements about the uniqueness of a business. Precisely WHY should customers do business with you?

Recently, we went in search of a UVP on par with the following:

"Google is the search engine of the world."
"Microsoft is the operating system of the world."
"Wal-mart is the leader in low prices and huge selection."

Very few businesses have truly compelling UVPs that can be conveyed in a concise manner.

A common response to the question, "What is your company's UVP?" is: "Great customer service."

Customer service on its own is not a UVP. It is a service delivery factor. Great customer service should even be considered an essential part of your marketing.

Businesses around the world devote extraordinary time and resources to developing and fine-tuning the product delivery chain (sales, marketing, distribution, customer service, etc.), but FAIL to assess the most fundamental of business success factors: their UVP.

So how do they survive?

Most do not. According to the Small Business Association, as of 2004, more than 50% of small businesses fail within the first year; 95% fail within 5 years.

Many fail due to lack of experience or business sophistication. However, even companies with experienced management teams often fail due to causes stemming from a poor UVP.

To help you develop your own UVP, we have included several examples that vary significantly in quality:

Here is an example of a "weak" UVP:

Basics Body Care is a 100% natural body care products company. We sell handmade soap, lip balm, hand balm, belly balm (for pregnant moms), and spa gift baskets. We personalize our soap labels for baby and bridal showers.

Here is one that has a decent UVP, but which is not articulated well:

User-friendly website that customers use to select options for customization of magazine. Back-end content management system that allows magazine publishers to add editorial content, control advertising database, filter user profiles, etc.

Here is one that has a smaller market, but at least has a quantifiable UVP:

I want to supply boat owners with high quality boat names, registration numbers, and graphics by using our website. My site is unique in the fact that it allows the end user to have a hand in the design process and by allowing the customer to preview the image before submitting the order. EVERY boat owner is a potential customer of ours due to the fact that EVERY boat MUST display its registration numbers on the bow of the boat.

This proposition has a number of problems:

Problem 1: The first two words are "I want."

Problem 2: The second sentence begins with: "My site is unique...." He's talking about his business rather than a market need in search of a solution.

Problem 3: "Every boat must display...." This is a variation on the good old, "Everyone needs socks. If we can get just a half a percent of the world market we'll be rich!"

And finally, a couple of the worst UVPs:

Help people dress better.

Recycling of plastics and paper. Then, producing environmental friendly products.

But how do you develop an effective UVP for your own company?

The following points will help to "discover" a strong UVP:

1. A UVP is not usually determined, it is discovered.

It grows out of need. If you set out to create the "best possible business," you may or may not end up with a great business. If you set out to solve the needs of your customers, your business will naturally evolve into something valuable.

2. Avoid a sales-driven approach to product development.

You should develop products for the market. A taxi driver drives around looking for fares. Microsoft researches the market and the competition and develops products years in advance.

3. Refine your UVP until you can articulate it in one sentence.

You should be able to communicate who your customers are, what you provide to them, and why they buy from you.

For example, even though this company may serve a smaller market, it has a better chance of being successful:

"XYZ Corp is the exclusive provider of patent-pending project management software for paving contractors, saving U.S. contractors over $34M in 2005."

Than this company:

"ABC Corp is the premier B2B portal for small businesses looking to grow."

4. Ask yourself why someone should buy from you instead of a competitor.

If your answer is "best selection," "best customer service," or "fast shipping," you potential success may be quite limited. These qualities do not make a business unique.

5. The simple ideas are the easiest to execute.

Google's idea was to "be the best search engine." They succeeded because, even though there was competition, they did create the most useful search engine. It produced the most relevant results and was clear from clutter and ads.

When Google said they were the best search engine, that statement in itself was no guarantee that they had a strong UVP. Every other search engine was saying the same thing.

The difference is that Google IS the best search engine.

This is a key issue with a UVP. It has to be what you DO and ARE. It can't be just what you SAY or WANT.

All too often companies write UVPs and mission statements that
attempt to cover up the cracks in their actual business with words.

That doesn't work. Your UVP is not what you say... it is what you are.

Keeping these guidelines in mind will help you create a UVP for a new business or "discover" one for an existing business. And remember, if your UVP can't fit on the back of a napkin, you probably haven't found it yet.