The Ultimate Guide to UVP (with 4 Examples)

What is a Unique Value Proposition (UVP)?

Unique Value Proposition is the third component of the Lean Canvas. It is a single, clear, compelling message stating why your product is different and worth buying over any other alternative. This is why customers choose one company over another.

The UVP is your unique chance to position your product in the minds of your potential customers so that they can’t ignore it.

Take Spotify as an example. There are many ways to describe the product and its UVP:

• A music streaming application (boring and undistinguishable)
• A platform to discover new music and manage your music library (I see the value, but still, meh)
• A musical happy place where you can immerse in the music you love (Shut up and take my money)

The Structure of UVP

There is no one correct way to express your value proposition. One possible template you can use is:

• Headline: A single and possibly short sentence that grabs the attention and captures the essence of your product. It should be specific and compelling and highlight your unique offering.
• Subheading: A brief explanation that expands on the headline, providing more detail about what the product does and its value.
• Key benefits: Bullet points with the main advantages that differentiate your position and complement the heading and the subheading.

What are the Key Characteristics of the Unique Value Proposition?

When you start formulating your unique value proposition, you should consider the following:

Different and unique

The UVP needs to express your product's unique benefits. It should be something that existing alternatives do not offer today or cannot offer at all. Those are the specific features that will appeal to your customers.

Valuable

Being unique on its own is not enough. The UVP has to convey the value that products bring. It’s best if this value stems from underserved needs and pain points discovered during customer research.

Clearly Communicated

Your product's unique features and benefits must be distilled into a few sentences. This is often challenging, especially with novel products that are category creators.

However, to do its job, an effective value proposition should capture the target market's attention within 5 to 10 seconds.

The perfect UVP effectively communicates to the customer segment that your product can solve their most important customer problem in ways others can’t.

Emotional Appeal

An element that connects with the target audience's emotions, addressing fear, frustrations, or aspirations, can make your UVP very persuasive and allow them to relate to it.

Good vs Poor Unique Value Propositions Examples

Airbnb

Bad example: “Book accommodation online.”

It’s not unique, it's not compelling, and it doesn’t convey value.

Better example: “Live like a local anywhere in the world.”

Focus is on the unique experience of staying in local homes.

Spotify

Bad example: “Listen to music online.”

This sentence is valid for hundreds, if not thousands, of products. It doesn’t communicate how Spotify is different. It’s not connected to a customer problem.

Better example: “A musical happy place where you can immerse in the music you love.”

It’s not just an application or a platform. It’s the place for music. All of the music you love is there. There are certain emotions attached to using the product.

SpaceX

Bad Example: “Spacecraft manufacturing.”

How remarkable - this makes the rocket industry sound boring!

Better Example: “Revolutionizing space travel with reusable rockets.”

Imagine you are an employee at SpaceX. What would make you get up early in the morning and go to work? The first or second sentence? That’s what I thought!

Amazon

Bad Example: “The world's largest online retailer offering an unparalleled selection of products across numerous categories including books, electronics, fashion, home goods, and more, with fast and reliable shipping options like Amazon Prime, along with customer reviews and personalized recommendations to enhance your shopping experience.”

This is unique, valuable, and … just too much. UVPs need to be short to capture the customer's attention quickly.

Better Example: “The biggest product catalog with fast shipping, trusted reviews, and personalized recommendations.”

How the UVP Relates to Other Components of the Lean Canvas?

Customer Segment

The Unique Value Proposition must be adjusted and resonate with the target ideal customer or the buyer persona.

Depending on your case - you might have:

• one UVP that addresses all customer segments,
• one UVP for each customer segment,
• anything in between.

Customer Problem

The Unique Value Proposition is the “glue” between the Customer Problem and the Solution. Based on the identified Customer Problem, the UVP has to communicate a message that compellingly addresses the unmet needs. You can think of it as your promise to customers to solve their problems.

Solution

The UVP is the promise, while the Solution is how this promise will be delivered. The UVP should be indifferent to the specific approach to addressing the problem.

Why is this important? Once you have validated the Unique Value Proposition and it matches the Customer Problem and Customer Segments, you can experiment with different solutions. There might be multiple ways to deliver your promise, and experimenting to find the best one will take time and effort. However, the risk is significantly lower as you have already validated all three underlying assumptions.

Unfair Advantage

Unfair Advantage and UVP are very connected concepts as they both touch on your product's unique characteristics. At the end of the day, they are two different representations of your product—one directed at your customers and the other directed towards your competitors and your competitive advantages.

How to find your unique value proposition?

As already mentioned, the Unique Value Proposition is derived from the customer problem that you are in a unique position to solve.

These customer problems are best identified through customer research. The key insights you need are:

• A job-to-be-done that customers have and is a priority for them under certain circumstances.
• What is the desired outcome for the customer?
• What’s at stake for them?
• What are the existing alternatives, and what gaps do they leave?
• How satisfied are the customers with the results they have achieved so far?

Note that none of these talks about the solution you will be building. It only explores previous experience.

The reason is to avoid introducing your own biases into the conversation. In the Icanpreneur platform, the interview process is designed specifically with that in mind so that entrepreneurs can have high confidence that insights are based on evidence from interviewees and not their own perceptions.

Once you find what your customers need, think about how you can help them in a positive way. Multiple frameworks and techniques can be helpful in that regard.

SWOT Analysis

SWOT analysis captures the Strengths, Weaknesses, Opportunities, and Threats related to a business or a product. It provides a holistic view by exploring external and internal factors, as well as positive and challenging aspects of a product or a service.

Strengths

Strengths are internal attributes to you, your team, or your company that would support a successful outcome.

Weaknesses

Weaknesses are internal attributes of your organization that work against a successful outcome. Those could be limited resources or a lack of understanding of the targeted market.

None of those weaknesses means you are not in a position to win, but it suggests thinking about how those can be mitigated. Even better - turned to your advantage. If you have no experience in a particular area but have huge experience in a different one - what would you bring from your past to the new market?

Opportunities

Opportunities are external factors that create tailwinds for your business. One example is the rise of new technology like AI at the moment. Another could be a dramatic environmental change, like the coronavirus, or a smaller market-specific phenomenon, like customers shifting their taste towards gluten-free products for health reasons.

Threats

Threats are external factors that create headwinds or risks for your product. Examples are supply chain disruptions, worsening economic conditions, etc.

The Value Proposition Canvas

The Value Proposition Canvas is another tool that helps product people structure their thinking around the value proposition statement. On the right side, you can start with everything you learn from customer interviews and work your way through the product on the left.

These two techniques can help you identify your UVPs. The next step is to express them in a compelling way.

How to Write a Strong Value Proposition?

• UVPs should be short and crisp.

Chances are that after all the research done in the previous activities, you have a ton of things to say. It’s important to find the essence and package it in a way understandable by the customer segment for which you are writing.

• Personalize and adapt to the target audience.

The wording and language must be optimized for the target customer segment to which the UVP applies. Pay attention to jargon and words used during interviews. The way an enterprise employee in the HR department expresses their problem might be completely different from the words used by a high school psychologist, even though they might have the same problem.

• Avoid general and ambiguous language.

The statement you came up with needs to be specific enough so people can visualize it. Too vague and fuzzy value propositions often fail to engage the audience and hit a brick wall.

The Icanpreneur platform provides useful guidelines and examples as well as all the relevant information from the canvas to help you with crafting your UVP.

Here is an example from Spotify’s Canvas from the Icanpreneur platform:

If customers can recognize themselves and their needs in the unique value proposition you communicate - this will be the first of a series of Aha! moments that you need to unlock.

Do you struggle to find out how many UVPs you should create? Use the following guidelines to decide if another UVP is needed:

• Are customer problems the same across all customer segments, or do they differ? - If there is little to no overlap, that might hint that a different UVP is needed.
• What is the difference in the perception of the problem in the customer problems? - Sometimes, people might have the same problem but describe and perceive it differently. For example, a student might prefer public transport to save money or be active, while a 40-year-old software engineer might be concerned about the environment.
• How different is the market of the various customer segments? - B2C, B2B, and their variations can require significantly different messaging.

How to test and validate your UVP?

There are multiple ways to test your Unique Value Proposition. Ideally, you wouldn’t want to get and implement a solution because that will increase the cost, time to test, and the associated risk. At this point, focus only on testing the message.

1. Pre-launch Campaign

One popular way is to create a landing page or one-page website that describes your value proposition (not the solution) and asks for a small commitment from the user’s side to this promise. The ask could be their email, a small advance, or another way to validate the user interest.

The Kickstarter platform is a great example of that. It helps entrepreneurs and inventors validate there is enough market demand for what they plan to build, often before they even start building.

2. Painted Door Experiments

Painted door experiments are similar to pre-launch marketing campaigns, but they lead the user to believe the product is there. Visitors are notified that the product is still in the making only after they attempt to buy it and are offered to stay in touch with you.

Both of these techniques are useful because they provide a list of leads for later and validate your messaging.

3. PPC Campaign

Another way to test the value proposition is to create a paid campaign with the positioning statement on social media or search platforms and measure its result. This is a good approach if you have no existing customer database and are struggling to drive traffic to your experiments. Depending on how much you are ready to pay for ads, this approach can quickly deliver results.

4. User Testing Sessions

Sometimes, the approaches above cast too wide a net for you. Running campaigns can be overkill if your total addressable market consists of 50-100 customers.

In that case, reaching out directly to the people who would be interested and showing them a mock-up with the value proposition might be a very practical approach. Chances are you already have connections with potentially interested people from the customer interviews you conducted.

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