This article is part of our Business Startup Guide—a curated list of our articles that will get you up and running in no time!

If you’re starting your own business you’re probably already thinking about what sets you apart from competitors in your space. Coming up with your unique value proposition (UVP) or unique selling proposition (USP) creates a strong foundation for all your marketing messages and strategies for engaging new customers.

This article is a handy guide that will define what a UVP is, and help you write your own.

What is a unique value proposition (UVP)?

Your UVP (also called a unique selling proposition, or USP) describes what separates your business from your competitors. It should explain how your solution solves your customers’ problem, the specific benefits, and why your target customers should choose you over the competition.

In a nutshell, your UVP covers: how your product or service works, what makes it valuable, and why it’s better than the rest.

Your UVP should be front and center on your website, and it should be completely free of jargon—it’s like a very short elevator pitch that someone who has never heard of your company before would understand immediately.

Your UVP is what makes you competitive

Every competitor in your field is vying for attention. From marketing plans to advertisements, consumers hear a lot of noise.

To cut through this clutter and turn your target audience into loyal customers, you need a value proposition that mere mortals can understand easily—and remember. You want your customers to hear your name and think, “oh, that’s the company that does (your unique solution).”

How do you create a unique value proposition?

Finding a value proposition takes some time and legwork. A real UVP is more than a clever tagline. For it to be meaningful, you have to know your customer and your business. Plus, you have to understand how your product or service fits into our consumer-driven world.

So while your UVP is probably always in the back of your mind, don’t write it based on what you think is true about your solution and your customers. Do some research and testing so that you are sure.

And for that matter, keep testing. Once you’ve come up with your UVP and put it all over your marketing materials and website’s landing pages, it might be tempting to set it and forget it. Keep testing it over time—the more your business grows, the more you’ll know about your customer’s pain points and how your solution helps them.

4 questions to help you create your value proposition

1. Who are your customers—your target market?

First, you need to figure out who your customers are. Who will buy (or is buying) your product or service? A lot of first-time business owners want everyone to be a customer; this is a rookie mistake. Marketing to everyone is the opposite of marketing to your target market. If you try to appeal to everyone, your business and product will get lost in the noise. An example of this kind of mistake is a shoe company trying to market to everyone with feet! You’ll waste a lot of time and money that way.

Instead, hone in on exactly who your audience is. Do some market research—both based on your existing customers (if you have them) and other populations you think might be good potential customers. You want to know and understand their pain points—the problems they have that you might be able to solve.

But you’re also interested in their demographic information, income statistics, and family makeup. How old is your target audience? Are they male or female? What kind of income does your target audience have? Get specific. What does your target audience do on the weekend? What kind of music do they listen to?

You might think these last questions are a bit far-fetched, but you want to create a buyer or user persona of your target audience. A buyer or user persona is a fictional representation of your ideal customer—but it’s a very useful tool to help you hone your messaging and who you consider to be a part of your target market.

You can’t create a unique value proposition alone in your basement, either. You have to test it. Run it by a small group of customers, or people you think are in your target market to ensure your it resonates with customers you’re trying to reach.

2. Why should customers buy from you instead of a competitor?

To separate yourself from your competitors, you have to know who they are and what they stand for. Research your competitors inside and out, from their mission statement to the types of employees they have. You can only set yourself apart if you know what’s already been done.

Putting together a competitive matrix can be a helpful way to visualize how you stack up against them. Don’t make the mistake of assuming you don’t have any competition. Every business has competition, even if you’re in a brand new industry. When you’re writing your UVP, see if you can articulate why your customers should buy from you instead of your competitors in ten words or less. If you can’t, keep revising.

3. What need or pain point does your product or service solve?

Write down how your business or product solves a problem or alleviates a pain point for customers. Can your product do something that other products can’t? Does it save time? Is it more affordable than other products? What about your product or service makes it must-have for customers—why can’t they live without it?

Take that list and cross off any need pain point that your competitors can claim to address too. Your competitive matrix might be helpful here. Below is an example of how a competitive matrix should look, and we’ve also discussed how to create a competitive matrix in more detail in this article.

This exercise is meant to help you find areas where your business is different than others. Simply having the best product or the best customer service in the market isn’t enough differentiation.

Remember, every business thinks they have the best product. Take some time to figure out how your product meets the needs of your target audience in a way that others can’t.

4. What’s your mission? What do you stand for?

What does your business stand for? It’s a big question, one that takes some time to figure out. Once you have a solid and clear answer, see if your mission overlaps or coincides with the list of things that sets your business apart. Now you’re starting to hone in on your value proposition.

Once you’ve done your digging, write down a few different possible value propositions that fit your business. Again, this isn’t going to be something you whip up in 20 minutes. Write a few down, stew on them for a bit, and refine them. Ask yourself if someone could read your UVP and think it’s talking about another company. If the answer is yes, you have a selling or value proposition, but it’s not unique yet.

Rework it until you have one succinct sentence that makes you stand out from your competitors. What do you want your customers to remember about you when they hear your brand or product name?

4 examples of great value propositions

One of the best ways to learn is by example, so let’s take a look at a few businesses that have created unmistakably unique selling propositions.

The Mast Brothers Chocolate

This duo of bearded, lanky brothers creates chocolate bars by hand. Their dedication to their craft alone is unique, but the brothers have infused their love of old-time traditions into their business.

When they need to purchase more cocoa beans, they charter a wooden sailboat to stay true to their pioneer-like roots. Now that’s a unique position you can market.

Dollar Shave Club

This online business sells and ships razors and blades to its audience for a buck. They poke fun at the fancy, vibrating 10-blade razors that are on the market today and encourage men to go back to basics.

But, don’t think that means they’re selling an inferior product. Their slogan is: “Our blades are f***ing great,” a tagline that points to (but isn’t the same as) their selling proposition. Remember, if other companies can also say their product is “great,” you have a catchy tagline, not something that sets you apart from the competition.  

Ellusionist

Here’s a business that created a value proposition by catering to a very specific audience. Ellusionist is an online store that sells playing cards to magicians.

Some of the decks are marked, others have a vintage appearance, but the variations are meant to build showmanship for its unique target audience.

Palo Alto Software

Shortly after publishing this article, one of our readers asked if we could share our own USP. Bplans is a resource offered by Palo Alto Software, so here’s what Noah Parsons, our chief operating officer, has to say about our UVP:

For Palo Alto Software, our goal is to provide entrepreneurs with the tools, knowledge, and know-how to help them grow faster and better than their competition.

We’re not just in it to make a buck—we actually want to help people succeed in business as much as possible. Our commitment to entrepreneurs is shown in our thousands of pages of free content that helps demystify the complexities of starting and running a business.

We also provide simple yet powerful tools for entrepreneurs so they can focus more on doing what they love and less on trying to build and understand complex reports and spreadsheets.

3 tips for creating your UVP

Julie Cottineau, the former vice president of brand for Virgin and current owner of a brand consultancy BrandTwist, offers a few parting tips to remember.

1. Don’t try to please everyone

You want a well-defined audience. “Don’t be afraid to alienate a few people along the way. Brands that target everyone, connect with no one,” she says.

“The biggest mistake businesses make is casting too wide a net, for fear of leaving anyone out. Women 25 to 54 is not a valid target segment, it’s a census box.”

2. Differentiate yourself from the pack

“In my practice, I think of a USP as a twist. Something unique, unexpected, and meaningful that can set you apart from the pack,” she explains. “A USP is any aspect of your brand or business that is different from the competition and can be communicated to your audience to encourage people to try your brand or switch from another brand.”

Whatever your value proposition is, it has to be something that the competition can’t claim, or at the very least something they don’t use as a marketing tool.

3. Make a connection

One of the best ways to create a successful selling proposition is to make a connection with your audience that pushes them to act.

“It’s not about shouting louder. It’s about marketing smarter. Creating compelling messages that connect with consumers, engage their hearts (not just their minds), and turn them into loyal brand ambassadors who will help you get the word out and build your brand,” says Cottineau.