The cynics will say: you can’t just open a coffee shop anymore.
There’s already one on every corner.
That’s why when someone asks: “What does your company do?”—what they’re really asking is: “What does your company do that’s so dang special?” or “Why should your company exist?”
Your value proposition is the answer to that question. And it’s also the driving force behind what makes your brand memorable, and your business profitable.
What’s a Value Proposition? (And why do I care?)
The UVP or “unique value proposition” is a concept that emerged in the 1940s. It’s been a cornerstone of every business plan, website homepage, and pitch deck ever since.
Really, it’s just a way to say: your business should make specific promise to a specific sort of person. It should offer something that matters to people—and it should do a better job with that offering, than anyone else can.
Having a value proposition sets the foundation for how your business markets, and makes decisions as it grows. It defines your brand, simplifies your “elevator pitch,” gives weight to your business plan, and makes it easy to assert why customers need you.
A quick test: a successful value proposition does these 3 things.
At its core, all successful value propositions can be boiled down into a few key elements. As you’re drafting yours—give it a quick “1-10” score on each of these metrics.
Relevance: You explain, as clearly as possible, how your business makes solves a pain point for your customer, meets one of their needs, or make their lives better.
Uniqueness: You explain why your customers choose to spend their hard-earned cash with you, and not your competition.
Specificity: You explain the tangible, (and if possible, quantifiable), end-benefit to your customers. For example: “it saves time” isn’t as powerful as “get it delivered in under an hour” or “spend 50% less time doing ____.”
We’ll break down further how to get to the heart of your business’ relevant, unique, specific value throughout the rest of this article. And to make sense of it all, we’ll introduce you to a short example.
Suzy’s Florals is a small business based in a mid-sized city. They have a quite a few loyal customers, and have noticed a potential opportunity to expand to a small location downtown. Before they do—they want to solicit a loan, and dust off their old business plan, which they no longer feel represents what they do, or who they do it for. Defining their unique value proposition would go a long way towards defining their vision for growth.
Relevance: getting to the core of what matters most.
Why do people shop with you? Or if you’re just starting out—why should they? Those are the questions at the core of what makes you “relevant.”
If you’ve already done some market research—that’s the first place you should look for answers. Go through what you know about your customers, what brings them in to buy your product, who they are, what they care about, and what they struggle with. Write it all down, or highlight the needs and value statements that emerge.
Keep in mind…
Don’t focus on what you offer. Focus on what that offering means for your audience. It’s not important to your customers that “your team has 60 years of combined experience.” They care that “With 60 years of experience, our team can tackle any unique building challenge—no matter how specific, or complex.”
Put aside any “givens”: If you’re a steakhouse, you wouldn’t brag about the fact that you “bring your customers out knives.” Or that you can “cook a steak from any grade—well-done to rare.” Of course you can. You’re a steakhouse. If it’s expected value, it’s likely not relevant value.
“Value” is not about “money”: Your business’ value proposition can’t be “we’re the cheapest.” At least, it can’t be just that—unless you’re prepared to always be the cheapest. If you define your value only on affordability, it means you can’t raise your prices as you grow. And it means lowering your rates if new competition moves in.
Questions to get you started:
Walk through a customer’s decision making process from “knowing you exist” to “spending their money with you” to “coming back and spending money with you again.” What prompts their decisions?
Compare your customer before their purchase with you, to your customer after. How is their life better? How do they feel?
Think about your perfect customer. Outside of their interactions with your business: what do they care about? What’s most important to them? Write it all down. Then look for anything that overlaps with what you offer.
Suzy feels like her flower shop offers a lot to her customers. They do free delivery on all orders. They include a personalized note in every arrangement. They have a specific, above-and-beyond, one-on-one, consultation session for every bigger event they do arrangements for. They really invested in their branding, and their logo and store layout reflect a sense of elegance.Overall, there’s a sense of “care” Suzy realizes she’s injected into every element of her business. Care for the little details that make an arrangement genuinely breathtaking. Care to “get things just right” for her customer’s occasion. And care for those tiny personal touches that make her customers feel special.
It’s “what’s the special thing my business does?” and “what is actually the decision-maker for my ideal customer?”
Keep in mind…
Consider all your competition. If you’re a coffee shop, your competition isn’t just other coffee shops. It’s your customer’s at-home french press. It’s anywhere else your customers might go to catch up with a friend. Or anywhere they might attend an open mic, or take a meeting.
The best quality—or, the version that “sets the standard” for your type of product or service.
The best bang for the buck—or, the option that has the best quality-to-price ratio.
An aspirational luxury item—or, that promise the experience of a wealthy lifestyle.
Must-have good—absolutely critical to a task your customer needs to get done.
You’ll want to get more specific, but these are some solid umbrella brackets you can turn to, as you compare yourself to your competition. Are you better quality? Do you offer something indispensable?
Questions to get started:
Why do people try your business, instead of somewhere else? What’s the first thing that stands out to them? Then, what makes the come back. Is it different than what initially got them got them through the door?
Give you, and your competitors, objective 1-10 scores on the four classic value propositions above. Do you get a 9 for quality, while the next highest business ranks at 7? Do you get a 4 for luxury—but an 8 for “bang-for-your-buck?” Where’s the biggest margin difference between “you” and “them?”
If a current customer were to switch, and only buy from your competitor—what’s the thing they’d miss? If you’d never opened your business, what’s something that’d be lacking?
Suzy writes down everything her business does, and everything her competitors offer. There are a few ways she really excels. Looking at her scorecard—she realizes that she ranks well for “best quality”–but her competitors also do a good job on that front. She does, however, rank noticeable better than other local shops on “bang-for-your-buck.”Thinking about the customer feedback she’s received, Suzy realizes her recurring visitors find her business to be a “fair” place to shop—even if it’s not a budget option.
She doesn’t increase her prices like crazy during wedding season, or Valentines Day. She’ll take on rush orders at a reasonable rate. She gives back to the community—with free workshops, and charity drives. And she never “over-promises and under-delivers.”
Specificity: moving beyond “best,” and into “most.”
You can’t all be “the best pizza in New York.” You also can’t easily be the “best moving company” or the “best furniture emporium” or “the best in-home cleaning service.”
And you don’t need to be.
You just need to be “the most” or “the only” of something specific—something that matters to your customers. And you need to explain the tangible outcome of buying from you, that resonates with your target market.
Keep in mind…
The best way to get specific is to frame your value proposition in customer language. It should be free of jargon. It shouldn’t state your internal goals like “revenue-driven” or “growth-focused.” It should be lifted, as much as possible, from the language customers will or do use about your business. Or, if you’re just getting started–how they talk about their ideal business.
Specific doesn’t mean dense. If someone can’t read and understand your value proposition in 5 seconds or less, it should be reworked. Or at least, it won’t translate well to consumers or investors. Specific means getting to the decision-driving detail for your customers. Not getting lost in adjectives.
Specific does mean clear (or measurable). This means avoiding marketing hype words like “the one and only” or “never seen before”—and drilling down into outcomes, like “shipped for free, and at your door today.” It also might mean being transparent about what kind of person would get the most value from your products or services.
Questions to get started:
The best question you can ask yourself here is “How so?” or “In what way?”—over, and over, and over again. If something you do that’s “relevant” is “We care about the customer”—a half dozen “In what ways?” should get you to the bottom of “how specifically?”
If you only had ten words to explain to someone why they should they buy from you, what would they be? Be choosey.
Who is this for? Who really? Who are those “top 20%” of folks who might pop by your storefront and walk in? Or land on your website and press purchase?
Now Suzy knows that her business “cares about the little things.” She knows she’s better than her competitors when it comes to high perceived value, and a sense of fairness product and pricing fairness.
But “Suzy’s is the careful flower shop with fair prices”—doesn’t exactly feel like it resonates. So she talks to a few more customers, and asks them what about Suzy’s stands out to them. She finds herself circling the same words in her notes that come up—again and again: “special,” “attentive,” above-and-beyond,” “stunning,” and “reliable.”
Putting it all together: Formulas for Compelling Value Propositions
If you’ve taken a bit of time, and gone through a few of the questions—you’ve probably learned a lot about your business.
Maybe too much.
Maybe you have paragraphs of ideas, words, and value statements—you don’t think you could possibly wrangle into a “5-second-read.”
But now that the legwork is done, you’re allowed to cheat.
Here are some “formulas” you can use as jumping off points.