Unique Value Propositions Analysis

Earlier I said on a number of occasions that in order to achieve your strategic objectives, you must satisfy the aggregate needs of your consumers and other stakeholders – financial, functional and emotional - better and more efficiently than your competition does. In other words, your products and services must create more aggregate value – financial, functional and emotional – than your competition.

To make it happen, you will need to first define exactly – in very specific terms - what kind of value for the consumer you will create and how you will do it. The corporate declaration (statement) that contains this definition/explanation is called Unique Value Proposition (UVP). Although it would be more accurate to call it Unique Aggregate Value Proposition (UAVP).

It is called ‘proposition’ because – like any other proposition – it states that it offers something. In this case – unique combination of financial, functional and emotional value. It is called ‘unique’ because no other vendor offers this kind of aggregate value. In other words, UVP states: ‘This is the value that we are offering and this is how we are going to deliver this value’.

UVP has two distinct components: general (‘core’) and specific. General UVP is the one that your company offers to all of its consumers (and even to all of its stakeholders). Stakeholder-specific UVP is the one that is offered to a specific category of stakeholders – consumers, partners, distributors, suppliers, the community, etc. Or even to a specific stakeholder.

Product-specific UVP is the one that is offered by a specific product; brand-specific – by a specific brand (brand offers exclusively emotional value). Market-specific UVP is the one offered to a specific target market. And so on. 

Consumers choose products, brands and vendors/providers based on UVP offered by the latter. So do stakeholders when they choose companies that they are dealing with – or structure relationships with. Therefore, businesses compete on the basis of UVP offered to their stakeholders and implemented in their products and services – explicit and implicit. Therefore, your single KPI in your UVP management system is UVP Competitiveness Index – aggregate and relative to each specific competitor.

The higher is the amount of aggregate value you offer to your stakeholders, the more attractive is your UVP and the higher is the aggregate value you receive from your stakeholders. In business, as in life, to receive aggregate value, you need first to give aggregate value.

Therefore, your company needs to develop and implement – in its products, services and relationships – not just one UVP, but the whole system (‘portfolio’) of propositions. And, like any portfolio, the UVP system must exhibit the highest possible internal synergy.

Obviously, your UVP system must match your KEF, your corporate vision statement, your corporate strategies, strategic objectives, strategic plans and needs and desires of your corresponding stakeholders.

In our fast-paced world needs and especially desires of individuals and organizations change rapidly. Therefore, to stay competitive, you will need to adjust and adapt your UVP accordingly. Hence, UVP management is an ongoing activity that requires a permanent – and highly competent UVP development and management team. The team that will use the optimal and highly efficient corporate process of UVP management and no less efficient tools.

Key requirement for your UVP is, obviously, being competitive. Both compared to UVP of your individual direct and indirect competitors and overall. In practice, it means that your UVP must be competitive in all of its three ‘departments’ – financial, functional and emotional. And – if it has one – in the spiritual department as well. And on aggregate.

It goes without saying that all components of your UVP must exhibit a perfect synergy with each other. You must also always remember that while your company may or may not have declared, written and explicit UVPs, it always has actual, unwritten, implicit ones. Therefore, it is vitally important to make sure that all of your declared UVP match actual ones.

To make your UVP generate financial value for your company, you must (1) put together the corresponding UVP statement; (2) implement the UVP in question in your company, products, brands, projects and processes and (3) communicate this UVP to the corresponding stakeholder.

As companies compete on the basis of UVP, your UVP statement is one of the most important corporate documents. Therefore, it must be comprehensive, logical, accurate and easy to read. As it is a powerful sales and marketing tool, it must provide an emotional impact on your employees powerful enough to motivate them to offer the best performance in implementing your UVP in your products and services and in selling the latter to your consumers and other stakeholders.

It is also very important to always keep in mind that in our highly imperfect world perceptions are the only reality. Which means that even if you develop a superior UVP and successfully implement it in your products and services, your stakeholders still may not perceive it that way. To prevent this from happening, you must develop and implement a highly efficient corporate communication system aimed at your stakeholders.

Again, your UVP statements (and even the whole UVP management system) by themselves are useless. To be useful and valuable to your company this function must be tightly integrated into your strategic and operational management process. In other words, you need to develop and deploy a highly efficient corporate process of using your UVP management system in your strategic and operational management.