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I’ll be honest — when I hear the terms “unique value proposition”, “unique selling position”, “USP”, etc. my eyes start to glaze over.
Having a clear value proposition is probably something you have heard a hundred times but never paid much attention to, because it seems so “basic.” And it is, but it’s also what I would consider step one in having a strong business foundation.
This is also why the value proposition canvas exists – to help you figure out all of the pieces of a strong value proposition for your customer.
Table of Contents
- What is a Value Proposition?
- What is a Value Proposition Canvas?
- Example of Creating a Value Proposition Canvas
- Designing Your Unique Value Proposition
- Mistakes to Avoid
- The Last Step
- 3 Benefits of Having a Unique Value Proposition
What is a Value Proposition?
According to Wikipedia, the definition of a value proposition is:
“A value proposition is a promise of value to be delivered, communicated, and acknowledged. It is also a belief from the customer about how value (benefit) will be delivered, experienced and acquired.”
In other words, it’s the reason customers and prospects buy from you and not your competitor.
It’s what makes you unique.
Your unique value proposition is the thing that determines if people will continue learning about your services or product or go back to searching for another solution.
If you don’t get this right as a business owner, you’re going to be battling uphill from the beginning. Especially as a new and undiscovered freelancer or business you’ll need a unique value proposition to help people understand why they should choose you over the larger agency that charges just a little bit more.
What is a Value Proposition Canvas?
A value proposition canvas is a tool created by business management theorist Dr. Alexander Osterwalder as a framework to help business owners with conveying their value in a concise statement. It’s a tool for more easily determining what makes your service or product, well, valuable.
The canvas breaks out the pieces of a great value proposition and helps you work through them one by one.
There are six major parts to the value proposition canvas:
- Products and Services
- Gain Creators
- Pain Relievers
- Customer Gains
- Customer Pains
- Customer Jobs
The unique value proposition is a piece of the larger Business Model Canvas. If you haven’t checked that you yet, go ahead and do that next as it will be super valuable for your business.
Here is what the Value Proposition Canvas looks like.
Let’s start working through this canvas and figuring out our value propositions. It may seem weird, but it often helps me to start on the right side of the canvas and thinking about our customer pains and gains (I’ll explain that more in a minute).
If we don’t get clear on the customer profiles we are helping, as well as their needs and pains, it’s going to be quite difficult to figure out how our solution helps them.
What you want to do is choose one customer profile you are going to use for the purposes of this exercise. If you help two main customer bases, then pick one for now and come back and do the same exercise for the other.
Essentially, these are the things a customer is trying to get done. It could be a task, a problem they need to solve, or some type of need they are trying to satisfy.
There are four types of jobs your customer could be trying to solve:
- Functional jobs – functional as in a task or specific problem
- Social Jobs – looking good, building authority in front of their audience, achieving some kind level of status
- Emotional jobs – security, aesthetics, feeling good about something
- Basic needs – Think Maslow’s Hierarchy of Needs. So these could be things like food, water, shelter, health, communication, sex, etc.
Building on the customer jobs you’ve identified already, try and determine what are the pains associated with accomplishing those jobs.
It helps to look at the before, during, and after of each as you will find different pains for each stage of the problem being solved.
For example, let’s say the customer job is running a YouTube ads campaign to drive more leads. Here are some of the pains they might experience along the way:
Before the Campaign
- Uncertainty about what they can reasonably expect
- Worried the campaign will hurt their brand
- Worried they might lose money and/or time
- It could be the most money they’ve spent on any one campaign
During the Campaign
- They might not know if it’s performing well
- Not sure what the next steps are
- It may have started off bad and they aren’t sure if the results will recover
- They aren’t sure they’re reaching the right people
After the Campaign
- They ended up wasting money
- They aren’t happy with the results
- A customer didn’t sell enough products/services
- They’re not sure if the campaign actually helped
Customer gains are the benefits your customer is looking for, what they expect, or what they might be surprised by. What do they have to gain from this experience of working with you?
Customer gains could include saving time, money or effort, as well as some kind of outcome that just blows their previous expectations out of the water.
This section is where you determine their expectations AND how you could go above and beyond their expectations to deliver an amazing project.
Let’s start diving in and working our way through the value side of things (the square). This is the fun part 🙂
Products and Services
In this section, you’re listing out what products and services you offer that could accomplish one of the customer jobs that appear on the right side of the canvas.
These can be big services or a simple online course. The only requirement here is that it must solve a need.
For this example, let’s say we have a course about how to get more clients for your business and the customer profile we are targeting is freelancers.
Next, we are going to figure out how the products and services you just listed solve a pain for your client.
How does your course or service reduce a negative emotion they had, or relieved some kind of risk they perceived as part of the job they need to accomplish?
Does it make their life better in some way, or reduce money they had to spend on the job?
In our client acquisition course example, I would say that freelancers are often on the lookout for more customers, and it can be challenging to find new clients, especially when you’re just getting started.
The pains we are relieving here with our offer are time spent trying to figure out how to get their next 10 clients, and fear of wondering where their next job is coming from.
Next, look at how your product or service created what’s called a “customer gain.” Essentially the opposite of relieving a pain, what are they gaining from using your product or service to complete that job?
Does it help them achieve results above and beyond what they thought was possible? Is this something that outperforms a current solution they are using?
In the get more clients course example, we are creating gains by helping them get more clients. A client pipeline is the lifeblood of a freelancers business, so this is a huge gain for them.
Example of Creating a Value Proposition Canvas
I went through this exercise for my agency business as well to help show you what this would look like using a live example. I created a short video for you but also have the text version below.
This is using my marketing consultancy geared towards a specific client type of mine, conference and event planners.
Here are the ideas I came up with for each area of the solutions/value proposition side of the canvas.
- Marketing Audit
- Conversion Tracking Setup
- Facebook Ads
- YouTube Ads
- Google Ads
- Save money
- Fix underperforming campaigns
- Better performing ads
- Better quality ads
- Confidence in ability
- Extra communication
- Created extra sales
- Got it done in less time
- Made them look good
- Kept them top of mind
- Produce a big impact
- Make the adoption of solution seamless
Designing Your Unique Value Proposition
Great – so now we’ve gone through the entire canvas and figured out what we can offer, and how it’s going to help our potential customers.
But we still don’t have a value proposition to share with people.
How do we build that?
Using this framework for my marketing example, here is what I came up with:
Holistic digital marketing for businesses looking to grow their audience and impact.
Be sure you’re using the most impactful channels to spread your message, not just the shiny, new ones. With our holistic approach, you know you’re moving in the right direction, instead of wasting time and money on channels that won’t work for you at this stage of your business.
- Customized marketing roadmap for your business
- Transparent reporting that allows you to pivot quickly
- Know exactly what’s working and what’s not for your company
Mistakes to Avoid
When building a value statement, we are trying to convey why people should buy from you. We are not trying to get cute and come up with a brand phrase or slogan here.
- Solving problems that don’t have enough value. You need to make sure this is a pressing issue for your customer, not just an issue. You could argue that every business needs marketing, but an event planner with an event coming up that has only sold a few tickets so far really needs help with marketing.
- Using jargon – “the MRR of YOY growth is A+.”
- Using too many or not enough words to convey your value proposition. Of course, you want to be brief so people can absorb the whole message, but being too short can have the reverse effect. “We help businesses grow” – cool, but how do you do that, and how big can you help them get? What kind of businesses do you help?
- Skipping this step. 🙂
The Last Step
This might be the last step, but it’s also a critical one: Position yourself as the premier provider of this unique value.
If you just have a value proposition, and you’re not owning it 100%, what’s the point?
Make sure you are showcasing in everything you do that you are the best out there for your target market.
Don’t lie and say you’re the best in the world, because most of us aren’t. But you might be the best solution for event planners who don’t have a million dollars to spend on marketing and need new clients.
This is also an ongoing step, not just a “check the box and it’s done” type action. Print out your value proposition and tape it to your wall. Get it printed and framed to put up around the office so your team never forgets.
3 Benefits of Having a Unique Value Proposition
“Okay, but if it’s such a boring topic, why is a value proposition important?” If you don’t see how this can be beneficial yet, here are a few reasons why:
1. More Effective Marketing
Your unique value proposition makes marketing your product or service 1,000 times easier.
I’m not kidding. You are setting yourself up for a much easier time getting the right customers if you take the time to do this.
Great marketing includes having a clear message, aimed at a specific group of people at the right time.
Completing a value proposition canvas helps you understand what makes you different, who you are the best solution for, etc. makes the whole process of marketing so much easier and more successful.
Think about it, let’s say that you serve people in the city of Philadelphia, ages 24-45, who are not married, and are interested in gardening. You’ll have a much easier time targeting them with say, Facebook ads than you would if you only knew that you help people in the Philadelphia area.
2. Attracting the Right Customers
When other people know exactly what you do and for what audience, they will either identify with your message, or they won’t.
This is a critical piece of finding the right customers for your business. You want the people who come to you to know exactly how you can help, because it makes the whole sales process faster, more streamlined, and you’ll waste less time talking to people who just don’t “get it.”
When you know exactly who you are talking to and how you can help solve their problems, you can speak more confidently to their needs, problems, and pains. You will quickly position yourself as the expert for that group of people.
You’ll be able to go to a networking event, and confidently talk about what you do and who you help. You’ll start refining your message and the people you’re talking to will either relate, or they’ll likely be able to refer you customers because they know someone who could use your help, which is huge.
Also, can you imagine how much easier it would be to sell someone your service or product if you knew who it benefits the most? You’ll know the words to use, the pains to touch on, and prospects will feel like you’re speaking their language – because you are.
Once you’re done with the value proposition canvas, let’s move over to filling in the rest of the Business Model Canvas.