planning essentials

When Times Get Tough, Push Your Unique Value Proposition (UVP)

When business is bad, too many organizations try to “cut” their way to success. While reducing costs and lowering prices may be a grim necessity, it all-too-often eclipses what may be a significant opportunity for an organization to outflank the competition, grow its customer base and deepen its customer relationships.

“In tough times, it is particularly critical for an organization to reexamine, redefine and reinforce its value proposition,” Donn Rappaport, CEO of database marketing firm ALC, and past President of the Direct Marketing Association. “It is when the economy is most difficult that consumers take stock of their spending habits and cut back on everything but the most essential purchases. Should organizations follow suit and match consumer cutbacks with their own? Not necessarily. That’s the time to refocus on the value proposition. Promising and delivering high value—at a time when consumers are feeling most needy—can prime an organization to win new customers and develop strong, profitable long-term relationships that pay big dividends when the economy picks up.”

The truth is that, in good times or bad, to capture a larger market share and be viable, sustainable and profitable, you absolutely need to differentiate or distinguish your business, products and/or services from your competitors. In other words, you need to make your business special in the eyes of your customers and prospects.

You can do this by creating what’s called a “Unique Value Proposition” (UVP) and then effectively conveying that UVP to your target market via your marketing efforts and business performance. It’s particularly crucial if you’re operating in a highly competitive market.

What is a UVP?

Larry Lim, founder of online marketing firm, MarketingSphere, describes the UVP as a concise statement about the advantages you bring to your customers that differentiate you from your competitors. It’s also the focal point around which the success and profitability of your business is built, so you must be able to state it and fulfill it effectively.

In terms of developing your UVP, start your process by asking some key questions: “What’s the one thing that makes your business unique and distinct?” “Why should people buy from you and not from your competitors?” “Do you promise great value, benefits or service?”

A UVP should be stated in terms of the benefit, or benefits, you deliver to your customers. It may be a broad range of product selection, superior customer service, highest quality, best prices, etc. Federal Express, for example, sets itself apart by focusing its value proposition on reliability (“When it absolutely, positively has to get there overnight.”) Rappaport notes that ALC’s value proposition is totally client benefits-centered: “To help our clients acquire new customers profitably and enable them to maximize the value of each and every one.”

When formulating and implementing your UVP, it’s worth considering the following components:

• Your UVP must be truly unique.
• It must be strong enough to excite your target market and get them talking about it.
• It shouldn’t be easily imitated or copied.
• It has to be credible—Anybody can claim that they provide the best service in town (“We’re The Number One Service Provider In America”). But that can be an empty promise because you can’t measure it, you can’t be held accountable and people can easily see through it. A UVP like this can in fact harm your business instead of helping it.

As you create your UVP, with the considerations above in mind, the following questions, taken from “Your Unique Selling Proposition” at the Business Owner’s Toolkit, can aid in your direction:

• What is unique about your business or brand vs. direct competitors? You’ll probably find a whole list of things that set you apart; the next questions will help you decide which of these to focus on.
• Which of these factors are most important to the buyers and end users of your business or brand?
• Which of these factors are not easily imitated by competitors?
• Which of these factors can be easily communicated and understood by buyers or end users?
• Can you construct a memorable message (UVP) of these unique, meaningful qualities about your business or brand?
• Finally, how will you communicate this message (UVP) to buyers and end users? Marketing tools to communicate UVPs include media advertising, promotion programs (e.g., direct mail), coupons, packaging and sales personnel.

The fact is that if you’re unique, you’re almost guaranteed to outperform and outdistance your competition. It’s also a fact that a “me too” business will eventually lose customers to more unique ones. These days, where businesses compete on price and service alone is no longer effective as a differentiator, you need to be different and unique in order to outperform your competitors. In tough economic times like these, a good UVP—one that’s clear and defines exactly what advantages your customers can expect from doing business with you—can drive your marketing efforts and have a profound impact on your operations. To make the most of your UVP, reinforce it in every marketing effort you undertake, from direct mail and your Yellow Pages ad to your website, blog and more.