We are regularly asked, “What is the difference between a unique selling proposition and a value proposition?
In this tutorial we are going to answer this very important question!
This is a very impactful question because the answer...
Everything else trickles down from there.
So, let’s dig into this important topic and answer it with descriptions, examples and an actual plan for you to develop your own unique selling proposition within your value proposition.
What is the difference between a unique selling proposition and a value proposition?
Your Unique Selling Proposition (USP) is what sets you, your business and your product or service apart from your competition. Your USP can be an actual fact, or a perceived difference or specialty. On the other hand, your Value Proposition (VP) is a fundamental business model decision that serves as the core strategy a company chooses to separate themselves from the competition.
While always intimately connected in all business activities, the difference between the USP and the VP seem like they should be slight, but in reality they are very very different.
The biggest difference between these two principles is that the Value Proposition is deeply ingrained within the company core operations, while the Unique Selling Proposition is more fluid and flexible in its development. Another key difference between the USP and VP is that a company can only have one Value Proposition, and to be successful, they need to go all-in on this one. Alternatively, a company can have literally dozens of Unique Selling Propositions, especially if they are selling to different customer personas and are offering multiple products and services.
If you have read our tutorial explaining the three core Customer Value Propositions, you already know they are Customer intimacy, Operational excellence and Product leadership. And you know there is a lot of opportunity in the Customer Intimacy value proposition.
But, let me explain with a few starter examples if you are just discovering this idea of the value proposition:
In all the above examples, the value proposition is, relative to competing brands, how the company chooses to separate themselves from the competition.
Think: McDonalds vs Five Guys. Both serve hamburgers, both are competing for hungry customers who eat in a quick serve restaurant format.
McDonalds delivers on an Operational Excellence value proposition to their customers. Every store is the same, food is barely acceptable and customers expect and can trust everything is done in the exact same format.
Five Guys, on the other hand, provides a Product Leader position. Food is as good as an expensive sit down restaurant and prices are far more expensive. Both strive to just meet the core expectations for the remaining value propositions.
But now, let’s go a layer deeper and develop the unique selling proposition.
First, unlike your one company value proposition, know that your business can have many unique selling propositions.
For example, maybe you own a moving company, let’s call it “Muscle Movers”. You could be selling to many marketplaces, such as:
These are three different market segments and the advertisements will be shown in multiple locations, such as LinkedIn, real estate networks, local HR departments, older community centers and even HOA’s.
The market segments are different and require different Unique Selling Propositions.
Again, the point of a USP is to focus on the niche or the need in the marketplace and deliver a promise you can make. Your unique selling proposition (USP) is what sets you and your product or service apart from your competition and clearly tells your customer the benefits.
Every business must have at least one USP. Some businesses have many.
The companies that have the most success know their market place and the competition very well.
For example, there is a very famous story about Walter Chrysler, who formed Chrysler Corporation.
He went out and bought several of the most popular selling cars in America. He then brought them home to his garage and took them apart down to the very last nut and bolt.
Then, he put the cars back together again. By the time he had done this with several cars, he had some great ideas on how to create a car that was better than other cars in America.
So, the core of your USP must be focused on your uniqueness in the marketplace. How your products and services are different, or better, than the competition. Your USP may be expressed as a summary of what you do and how you do it better or differently.
Here are some simple characteristics and action steps that you can take to develop your own USP. The examples and suggestions are guidelines and can help you clarify your thinking on this fantastic strategy.
As your product line expands, as your customer’s needs change, and as your marketplace changes, your USP will change.
But, if you find a USP that is successfully bringing clients to you, do not change what is working without independently testing other USP’s to produce better results.
This is a good problem to have!