When you buy a product, what influences your purchasing decision? Do you buy it because it’s something you want or something you need?
Beyond that influence, what happens when you see two or three similar products? Do you differentiate between them based on price or other factors?
Even buying something as simple as a toilet roll may go through several stages in your mind.
A big part of what influences your purchasing decision comes from the way a business presents the product. In the early stages of making marketing decisions, a business considers the unique selling proposition vs value proposition debate.
What is a unique selling proposition or a value proposition? What are their differences, and which should you focus on?
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Source: Free to use image from Pixabay
Source: Hive Digital
When marketers present a unique selling proposition (USP), they are telling consumers that the product has a distinct feature that sets it apart from similar products available.
They want to convey the idea that the product is superior to those offered by competitors and that the consumer should buy that product. A USP has some key aspects:
Although similar to a USP, a value proposition (VP) focuses more on the benefits or values the product offers consumers.
In many ways, it’s a response to consumers' rhetorical question: "Why buy from your business?”.
With a VP, your marketing team communicates the overall benefits and values a customer will get if they choose your product or service. As with the USP, several key aspects set it apart.
The first thing to understand is that both concepts are essential parts of your marketing strategy and can make you stand out from your competitors.
To further confuse things, your USP would be part of your value proposition, but your value proposition isn’t usually a USP. You should be utilizing both to create a marketing message that consumers will identify with and respond to.
Your USP should deliver a clear and concise message to customers that you will address their pain points and guarantee any promises made.
For example, if you were selling a SaaS accounting package, you could say that you guarantee that the solution will reduce the workload of an accounting department by a minimum of 10% and that you will refund the costs if that’s not the case.
Your message could be condensed to, “We reduce your team’s workload.”
If you were creating a value proposition for that same product, you would focus on the benefits and advantages that your product offers.
SMS campaigns can enhance customer engagement, providing timely updates and exclusive offers directly to their mobile devices, ensuring that customers feel continuously connected to your brand.
You could leverage advanced tools such as dynamic creative optimization to significantly enhance how these benefits are conveyed to different audience segments, ensuring that each consumer receives the most compelling message tailored to their preferences and behaviors.
Additionally, you could highlight features such as integration with other solutions, 24/7 technical support, or the affordability of the product's tiered pricing. You could then tie those advantages into an overall statement such as “an affordable and intuitive accounting solution.”
It can be confusing, and the two terms are often used in place of the other. It can help to look at what other businesses use in real life.
FedEx: “When it absolutely, positively has to be there overnight.”
WooCommerce: “The most customizable eCommerce platform for building your online business.”
Best Buy: “Find a lower price, and we’ll match it.”
GEICO: “15 minutes could save you 15% or more on car insurance.”
You will recognize some (or all) of these USPs as they are often used in advertising and can become synonymous with the brand name itself. For example, if you see any advertisement material for Best Buy, you may immediately think of their price match promise.
FedEx: “Manage Your Home Deliveries”
Samsung: “Get Ready to Unfold Your World”
LG: “State-of-the-art Living Experience”
Hulu: “All The TV You Love”
These may not be as recognizable as VPs and are often used internally or as a subtext to an advertising campaign. When they are used publicly, you will often find them combined with a secondary headline and a visual element.
For example, if your business offered a consultancy service on enterprise architecture strategy, you might have the following.
Value proposition: Taking the pain out of change.
Secondary paragraph: Our service helps you align your business’s objectives with new and existing IT infrastructure and technology solutions.
Visual element: The flowchart below shows the process of adopting an enterprise architecture strategy and can help potential customers see why they need your help.
Source: Ardoq
Source: Fit Small Business
Your unique selling proposition will be most seen by customers and what they may immediately think of when they see your brand name in other advertising. If you’re going to create an effective USP, how should you approach it?
You want customers to connect with you and see your product or service as unique and something they need.
That can go beyond customer service and means you need to know how they think about things, what they care about (for example, do they care more about price or durability?), what problems they may be encountering, and how your product might be able to solve any issues.
Market research and focus groups are two ways you can do this, and you can also analyze your market: what’s trending and what’s selling. You might also look at other information, such as current SaaS trends, to see if you can stand out.
Ask yourself, what would motivate a customer to buy a particular product, and what pain points or hurdles do they want to avoid?
While the end goal is for the customer to purchase the product, you should focus more on what that product will do for them and what problems it might solve.
You must remember that today’s consumers are far more savvy than they used to be. They will check reviews, listen to friends and family, and focus more on what the product does than the product itself.
Now that you know what the customers need, you can look for that sweet spot to make your product or service stand out from its competitors.
This will become the core of your USP and highlight something you offer that your competitors do not.
That differentiator will become the foundation of your USP and what you are promising potential customers. It’s all about identifying what is unique about your product or service.
Creating a good value proposition can be a bit more complicated. You could think of your USP as the bait on the hook and your value proposition as the great rod that will land a (hopefully big) fish.
With your VP, you need to be able to show potential customers the results they will get from choosing you. You may offer multiple values, but each of them should benefit the customer.
Customers want to know that you understand the issues they are facing.
For example, if a business is undergoing business transformation and you offer several solutions, they want to see that you fully empathize with the issues posed by complicated procedures such as legacy migration (or modernization).
By knowing you empathize, they will know you have approached problems with the right mindset.
In a competitive market, it can be hard to be unique. Multiple companies may fight for custom, so you need to identify the uniqueness of your product or service.
You may take a similar approach to solving a problem as your competitors, but you should try to ensure that something special makes your offering stand out.
It’s good to say your product is the best, but how do you back up those claims? Use evidence from white papers or previous customers to prove your claims are concrete.
For example, CRM (customer relationship management) systems can be expensive. If you use numbers and percentages to show that your product's desired outcomes are achievable, then you are moving the customer along your sales funnel.
The keyword throughout these processes is “unique.”
Your value proposition should make your solution stand out from the others. You should identify customers' priorities and match them with your value proposition.
Consumers want a product to solve problems and lead to a highly valued outcome. Highlight how your product will lead to those outcomes.
As with any marketing tactic, you need to be sure that your value proposition is speaking to your target audience.
By having a clearly defined audience, you can best customize your VP to what that audience wants, the values it desires, and the problems it encounters.
It’s also important to remember that there is no catch-all solution. If your VP tries to appeal to everyone, then it may fail.
The simple answer is both. You need both as part of your overall marketing strategy.
You aim to make your brand and product stand out in an often crowded market and to buy your product rather than those of your competitors.
They both help to achieve certain marketing goals and can help move customers through your sales and marketing funnels. Summarizing their definitions and uses can help you see how to use them.
A Unique Selling Proposition (USP) is specific, highlighting a product or service's unique benefits and features. A Unique Value Proposition (UVP) is broader and focuses on the value that a company’s product or service offering brings its customers.
Nike’s value proposition is centered on the idea that participating in sports inspires confidence and success – hence its tagline, “Just Do It.”
It frames its products around empowering and inspiring people to push their limits. This UVP shapes their overall branding and marketing strategy.
Their USP differs by product, guiding the marketing and sales strategy for individual collections or items.
For example, the new Shox TL sneaker is marketed as being ahead of its time, pushing the boundaries of style, and featuring a future-forward silhouette.
To identify your USP, focus on what makes your product or service stand out from competitors.
What problem does it solve for your target market? Analyze your strengths and weaknesses relative to competitors, then align your strengths with your customers’ needs.
Your USP should address their pain points or desires.
To help with the process, consider gathering feedback from current customers to see what they like most, then refine your USP into a concise, memorable statement that highlights your product’s features and benefits in a way that resonates with your target customer.
In some ways, the whole idea of a unique selling proposition vs value proposition decision is a false dichotomy.
Both are needed for any product you have, and while there are many similarities, there are key differences too. Any sales and marketing strategy you put together should have both a unique selling proposition and a value proposition.
At the heart of successfully using the two lies a high level of knowledge of your product and your target audience.
Knowing what customers want or need and what problems they face means you can put together a USP and a VP that appeals to them. Knowing your product well makes it easier to identify unique traits and the values the product will give customers.
Cynthia is a Product Marketing Manager at Ardoq. She believes that the far-reaching benefits that Enterprise Architecture has on a business tend to be unknown and underestimated. She is on a mission to make those benefits clear.