What is a value proposition – and why does your small business need one? Your value proposition is what sets you apart in a crowded marketplace and what allows you to appeal to your target prospects. Every competing company in your field is seeking the same group of customers, so your unique selling proposition (USP) is what makes you unique and what appeals most to your prospects. Correctly identifying your target customer and then crafting a unique value proposition that they just can’t resist will allow you to stand out and thrive in a crowded marketplace.

Creating your Own Unique Value Proposition

It doesn’t happen overnight, but the time you spend now correctly developing your USP and defining your product and customer will pay off in the long run. You know you have a fantastic product or service, but the process of developing a value proposition allows you to gain a comprehensive understanding of how you may appeal to consumers and where to invest your marketing efforts.

Start with your Audience

Who is your target customer? How do they spend their time? Are they male or female, buying for themselves or someone else – and what is motivating them to make that purchase? How old are they — and what concerns them most? A 20-year-old college student will have far different concerns and goals than a just-turned 50 years old professional. It’s tempting to think that your product has such broad appeal that everyone will love it, but taking the time to define your target audience ensures that you are directing your efforts in the right way.

Ideally, you’ll be able to come up with a complete image of your target audience and be able to define them in a few short sentences. If you are selling a home organization system, your target persona will likely be female with children in the home, but you need to look even closer. Is she worried about the budget every month or can she afford simple luxuries? What does she do to treat herself, and what does a typical day look like for her? Answering these questions can help you correctly target your market and make sure that you are presenting your product to a group that wants it, can afford it and is likely to purchase it shortly.

Learn from your Competition

They may not offer the same product you do (your business is unique, after all), but you do have competition targeting the same market you are. Taking the time to look at how your competitors big and small are relaying their message to your target audience helps in several ways:

• You see what resonates with your target prospects, without spending any actual cash.
• You gain an understanding of the messages your targets are receiving, so you can develop ways to stand out in a crowded market.
• You learn how your product can fill a need for this group that is not already being met.

You can also use that competition to stand out – if everyone in your area is approaching customers, in the same way, novel approaches in marketing and messaging will help your brand stand out.

What is your Message?

What is your brand’s mission and what one thing do you want buyers and prospects to know? How will you improve their lives? Distill your offering to one simple sentence, and you can build your efforts around this concept. Do you help buyers feel better about themselves? Assist them to save time or money? Beautify or simplify their lives? Get to the heart of how your product helps your customer, and you’ll find your unique selling proposition.

Make a list of the key benefits of your product or service – -mainly the “why” people buy and what they get from their purchase. Your list could be hundreds of items long or just a few key points; getting these ideas down on paper can help you refine your unique value proposition and understand what resonates with your buyers. You do not have to go it alone; your employees and current customers may also be able to provide valuable input – a survey can help you gain essential information about your product and buyers.

Once you have that one, pure message, you can begin to build your marketing plan around it. Your unique value proposition isn’t going to just pop into your head in 10 minutes – give yourself plenty of time to work it out and to think about how you will position your brand. The more time you spend on this step, the more successful your marketing efforts will be.

Ideally, your USP should be one sentence that defines your brand and makes you stand out from everyone else.

Incorporate your Unique Selling Proposition into your Marketing

Once you have your value proposition, put it to work for your business. Every printed material, blog, tweet and post your business makes needs to relay your value proposition in some way. This will not happen overnight, but by constantly being aware of your message and seeking out new ways to convey it to your customer, you give your marketing team something solid to work with. Over time, your value proposition should permeate every aspect of your business; customers should be able to instantly grasp your USP whether they are visiting your website, following you on social media or viewing a video you’ve produced.

Correctly targeting your value proposition takes time, but taking the time to work through the process can help you make a valuable, lasting connection with your target market. Once you’ve correctly identified your USP, you’ll know where your marketing and advertising efforts should be focused and avoid wasting capital on efforts that won’t make a difference.

Alexander Osterwalder (of the Business Model Canvas fame) has developed a Value Proposition Canvas.  You may consider this canvas as a set of guidelines and guardrails.