“How do I come up with a unique value proposition? What I sell isn’t unique.”
If you’re working on improving your business, you know there’s no shortage of information about why you need a unique value proposition.
You’ve probably even seen a handful of solid examples, but when you go to write your own, you hit a wall.
You’ve got too many competitors, they’re selling the same stuff, and it looks like all the good value propositions are taken.
What can you do? What should you differentiation strategy be?
In this article, let’s explore the process and mindset necessary to create a killer value proposition when you’re in a crowded market.
By the time we’re done, you’ll know:
- How to examine the competition;
- The reasons why people buy online;
- How to turn shoppers’ motivations into a unique value proposition that sells.
This article is a companion piece to another article: “How to Create a Unique Value Proposition (with Examples).” As such, if value propositions are new to you, open that article in another tab and read it after you’re done here.
Not being alone isn’t a bad thing.
According to the business development firm Ernst & Young, the top four categories for online purchases are:
- Computer Related Products (40%);
- Books (20%);
- Travel Industry (16%);
- Clothing (10%).
If you sell in any of those categories, I don’t need to tell you how crowded they are. However, that’s not a bad thing. Potential customers have established buying patterns in those markets, so some friction has already been removed.
Not to mention that many of your competitors have no idea what they’re doing. Plenty of decisions are made by CEOs and other HiPPOs who aren’t looking at any research or data.
Plus, more competition means more competitive data. More competitive data means better analysis. Better analysis means more ways to tear the competition apart.
You can’t be unique unless you know what the competition is doing.
The purpose of competitive analysis isn’t to copy a bunch of stuff that you think is working. Instead, it’s your chance to figure out where competitors are weak—and where you may have an advantage.
Think this doesn’t matter? Nivea for Men—a skincare product in a saturated market—gives us this excellent case study for a SWOT analysis. That analysis was essential to a strategy that expanded their market and grew international revenues by 20%.
Nivea used their market research to establish themselves as the best in men’s skincare. They even won the consumer-voted FHM award for best men’s skincare product line.
Where does your value proposition come from?
Your value proposition should come from what you do better than the competition, not from forcing copywriters to be clever.
Look at the weaknesses of your competitors and ask:
- Is your website easier to use?
- Can your product be better tailored to the market?
- Do you have a kick-ass customer service team?
- Is your return policy or customer guarantee superior?
- Are your prices lower?
- Do you have faster shipping options?
- Is your atmosphere better?
Realistically, there will be problems you can’t solve. For example, if you can’t offer free shipping—and the competition can—that’s not going to help your value proposition.
But being more knowledgeable, having a friendlier staff, or a cooler inventory are things you could work into a unique value proposition.
If your value proposition makes the benefit immediately apparent to the customer, you’ll be a step ahead because everyone else is still trying to compete on features.
You are not the products you sell.
As Gregory Ciotti explains:
The first value proposition just doesn’t drill down enough on what the customer is getting—the addition of “just one hour” to the second statement adds a very specific benefit to justify why the customer should buy from them.
More importantly, this value proposition establishes the garage as the “just one hour” guys. “Speed of service” is what they’re selling.
Similarly, Domino’s never claimed to be “The Best Pizza You’ve Ever Tasted.” Instead, they understood that when someone wants pizza, they want it now. They built their business on “You get fresh, hot pizza, delivered to you in under 30 minutes—or it’s free!”
Shoe retailer 6pm.com isn’t selling shoes and clothing—they’re selling high fashion at deep discounts:
What experience are you really selling?
- Low prices (38%);
- Shopping convenience (35.1%);
- Easy to compare (33.1%);
- Free shipping (31.5%);
- Time saving (30.8%);
- Easy to buy (29.2%);
- Range of products (17.4%).
Don’t take these motivations at face value, though. Not everything is as it seems. Some of these reasons can be overridden by something else; others can be “hacked.” So pay attention. This is where we might find your unique value proposition.
Nobody wants to race to the bottom on price. If it’s something you can do while protecting your profits—and you’re confident you can make up for it in volume—by all means, do it.
But if you’re like the rest of us, you’re not jumping at the thought.
Instead of boasting “the lowest prices,” tap into the low-price mindset by offering to match the lowest advertised price from a direct competitor in your value proposition.
“The best prices on 4K televisions. Find a better price from a competitor* and we’ll beat it—guaranteed.”
Alternatively, your value proposition could highlight superior customer service:
A survey by Forrester asked 4,600 U.S. consumers across 12 industries which was more important, “great customer service” or “low prices.” Customer service won across the board.
Shoppers order when and where it’s most convenient. Traditionally, convenience could mean having great recommendations or an easy-to-navigate website with fast load times.
While those things absolutely matter, the killer value proposition for shopping convenience may be emphasizing that your store is convenient to access—no matter where your customer is located (or which device they’re using).
Technologies like progressive web apps can create a lightning-fast user experience without the need for app adoption.
Easy to compare
People comparison shop, there’s no way around it. The average consumer will visit three websites before making a purchase and will likely spend more money with sites they visit frequently.
Honestly, making things easy to compare probably won’t be your leading value proposition (unless you’re in the insurance or accommodations industry—maybe.)
But if you’re competing on price or better product features, it couldn’t hurt to add some comparison shopping functionality as a bonus to back your claim.
There are some really excellent examples over here. My favorite is SugarSync:
Again, it’s unlikely that comparison shopping will be your main value proposition, but if the market is overcrowded, it could be a great way to reinforce whatever claims you do make in your value prop.
For whatever reason, a free shipping offer that saves a customer $6.99 is more appealing to many than a discount that cuts the purchase price by $10.David Bell, Wharton
Free shipping is another one that won’t likely be your primary value proposition (unless no other competitor offers it) but rather as a bonus to supplement the main proposition.
Free shipping matters. Some 47% of people will abandon a shopping cart if free shipping isn’t available.
There are a number of ways you can offer free shipping:
- All free, all the time;
- Free during specific holidays;
- Free over a certain dollar amount, etc.
Or, you can create a model that eventually puts you in the position to offer free shipping all the time.
Big Commerce says this about including free shipping as part of your offer :
Free shipping [. . .] can help increase your average order value by up to 30% in just a few short months. You simply need to work out your average order value and average shipping cost, and then offer free shipping on your average order value + 10%, or whichever amount covers your average shipping cost and provides enough of a profit to slightly increase your average order value.
Time saving/Easy to buy
We want ways to get our products faster. There are two ways I can think of this in modern ecommerce.
1. Subscription services
Amazon introduced a “Subscribe & Save” program to help customers “Save up to 15% on auto-deliveries.“
Another favorite, Dollar Shave Club, has taken the headache out of buying (or rather, never really replacing) your razor.
What I like about these services is that their value propositions are basically selling the idea that you don’t have to shop for stupid, but necessary, things.
With a little creativity, a subscription service could be adapted to many kinds of ecommerce models, saving customers time and making it much easier to buy.
2. Product recommendation engines
If their value proposition were focused on their recommendation system, it might read something like, “Give us 10 seconds, and we’ll recommend the best supplements based on your dog’s breed, age, and size.”
Range of products
No way around it: Selection matters. You should have enough inventory to satisfy your customers’ demands.
Now, “range of products” doesn’t mean you have to carry every product under the sun. If you’re a fashion e-tailor that carried only 20–30 styles, that’d be fine if you carried the product I was looking for in my size.
Trader Joe’s carry’s less than 1/10 the selection of other grocery stores but averages twice the revenue per square foot of direct competitor Whole Foods. How?
They carry only what customers want. They watch the trends and listen closely to their target market. They may not have 40 kinds of peanut butter, but their entire range of products is far more appealing to their target buyer.
How do I know if my value proposition is any good?
After you’ve done the competitive analysis and figured out your angle, all that’s left is to write your value proposition.
You can test your value proposition by running Facebook or Google Ads targeting competitor traffic, then sending those users to a landing page where the value proposition sits front and center.
Lean Startup Machine used this method to validate a startup idea and value proposition—and got 50 signups within the first two hours of the page going live.
I know how daunting and vulnerable putting a new value proposition in a crowded market feels.
You’ve put a lot of work into figuring out the competition and how you can out do them. There’s a chance you could fail, and it’s terrifying to think all that effort was for nothing.
But the truth is, while everyone else is out there copying image styles or site structure, you’re taking notes on the things they take for granted. You’ll come out of nowhere, and not a single one of them will know what to do.
So be brave, test your idea. If it doesn’t work, learn from what you did and try again. Don’t get precious about it. They’re just words.