How to Differentiate Your Business and Build the Backbone of Your Brand Strategy
Your Unique Value Proposition is one of the most powerful outcomes of brand strategy: it gives your brand a true, clear competitive advantage. It answers: “what do you bring to your customers that no other competitor can? What do you do really well that’s very hard for others to do?” In branding, this is known as defining your competitive advantage, or your Unique Value Proposition (UVP). When it’s clearly defined, you know what separates you from your competitors, and why you’re compelling to your customers. That is amazingly powerful! It is the core of your brand strategy and a significant weapon in your Brand Story arsenal.
But some business leaders struggle to define their UVP. It can feel confining: “We offer so many things! How can we choose only one?,” or difficult to pinpoint: “there are so many things we’re good at.” Some brands doubt they have a UVP, so they stop looking and often wind up talking about the category proposition instead of what makes them unique in the category. That logic that lands you in competitive territory, not competitive advantage territory. And without a sharp UVP, you can’t change the conversation from us-versus-them to the value that you alone bring.
You need a method to arrive at a sharp competitive advantage.
I help my clients articulate their Unique Value Proposition, and I’ve found the following framework from brand strategist Lindsay Pedersen (see her book Forging an Ironclad Brand) to be incredibly useful in thinking through how to express your differentiation. My goal in this article is to help you define your UVP. Grab a notepad and a pencil, because we’ll get to sketching in a bit. We’ll first walk through the process and then I can take you through how you build your own UVP.
How to Craft Your Unique Value Proposition
The best way to design your UVP is with input from three important factors: your customer (their needs & wants); your competitors (their strengths); and your brand strengths.
There are two overlaps in this Venn diagram, and both are important in nailing your UVP. The first one – the lower portion of the overlap – gets at what you and your competitors offer and what your customers are looking for. This is the Category Proposition, and it’s important, because fulfilling this means you’re squarely in your customer’s consideration set. That’s a good thing: you’re relevant and in the running.
The not-so-great news: this is table-stakes. To get to your UVP, we can’t stop here. We need to keep going to ensure your offering is unique and differentiating.
Now consider the top part of the overlap: the orange portion in this second diagram. This is the intersection of what your customer wants, what you deliver, and what your competition does not.
This is your competitive advantage, and what differentiates your brand from the rest. This reveals how you serve your customers in a highly valued way that is unique to your business. This is what we want to get to. So here’s how we do that.
Let’s Build Your Unique Value Proposition
Draw a large Venn Diagram with three overlapping circles. Label the circles “Customer Desires,” “Competitor Strengths” and “Brand Strengths,” as shown in Figure 1.
Next to Customer Desires circle, write down your customer needs and wants. This should come from research, customer feedback forms and evaluations and other direct customer insights you have about their needs, including your industry knowledge and expertise.
Move on to Competitor Strengths. List all the ways in which your competitors excel. Be honest. List all the benefits and strengths they bring. Why do customers go to them? What do they provide? Think of every detail, no matter how seemingly insignificant. For instance, if you were an upscale coffee house, you might write down “clean bathrooms,” which doesn’t seem to have anything to do with a coffee house. But clean bathrooms are important in delighting customers, especially when your brand is an upscale coffee house that charges $4.50 for a coffee. To not have a clean bathroom is anathema.
Now focus on your Brand Strengths. List everything your company delivers. What is special about your business? What are you better at than anyone else? List all the ways you delight your customers, thinking through the details of your customer-brand interaction. What is your business model strength? From what do you draw purpose or passion? Be exhaustive and consider all aspects of your brand. This could be your technology, your family recipe, your culture, your heritage, your intellectual property, your customer service, your brand’s personality, and so on.
Explore the Overlap
Now let’s go back and explore the overlap sections. In the lower overlap section, distinguish which of these are category propositions and which of these are unique to your brand that your competition does not offer. Delineate the category propositions, and review them. This list should be a perfect match up of your customer’s desires and what you AND your competitors both bring. It should feel accurate… but not ownable, not exciting.
What’s left over is the best part. Explore these fully, because these are your brand strengths: the areas where you meet your customer’s needs & desires AND you excel at AND no one else can come close. Explore the attributes you’ve found. Is there a single one that rises to the top? You’ll need to pick 1. It should feel big, like it defines your offering. It should feel ownable, like this is something that is unique to your brand.
Pressure-test Your Unique Value Proposition
How do you know you’ve landed on a great Unique Value Proposition? The following criteria can help you evaluate how strong your UVP is. You’ll want to explore if your differentiator is:
Big: is it big enough to matter? Does it drive a customer need, will your customer be moved to engage with this benefit? Does it allow you to grow and expand your offering?
Narrow: is it narrow enough to own? Can you dominate this strength?
Ownable: Can you and you alone bring this strength to your customer? Can you deliver this consistently?
Empathetic: Is this benefit rooted in a true customer insight? Do they gravitate to this benefit?
Precise: is it sharp enough to keep you focused? Often these benefits can feel squishy. Opt for words that are weighty and signify clear direction for you and your team.
If you’ve landed on something, wonderful. Sit with it, try it on mentally. Try positioning your company out loud to industry contacts, employees and peers as “we’re the only company in this category that does _____________.” If it doesn’t feel quite right, sit with your list for a while.
Sometimes it’s completely obvious what your unique differentiator is, and for others it emerges after reflection. Either way, observe how you feel with this new benefit as your unique differentiator. Does it feel real, ownable and powerful to you, like a summary of what you bring, but plussed? If what differentiates you from your competitor doesn’t feel strong enough, go back to your brand strengths and reevaluate to see if you missed something central. You might revisit your customer research and re-examine what your customers value and why they are so satisfied by your offering.
If you’ve done the exercise and landed on a UVP: congratulations! But if you’re stuck and need help, connect with us. We’d love to help make your brand magnetic to success.