5 Questions to Stress Test Your Unique Value Proposition

5 Questions to Stress Test Your Unique Value Proposition
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When Should You Stress Test Your Unique Value Proposition?
If you want to grow and increase performance, your unique value proposition is worth your time and effort to get right. We define your unique value proposition as what clearly sets you apart in the eyes of your target clients.  If you are getting increased pricing pressure, losing key deals, having difficulty getting above the noise, seeing dips in customer retention, or lacking high levels of employee and customer referrals, it is probably time to stress test your unique value proposition with your target customers.

Companies that differentiate themselves from the pack create a lasting competitive edge and improve their ability to make smart choices about how to market, price, prospect, sell, win deals, serve clients, and allocate resources.

Keys to the Power of a Unique Value Proposition
Sadly, too many companies either have an inward-looking, self-inflated, cliched, or easily comparable explanation of why they are better, faster, and/or cheaper.  They forget that most buyers believe that they have many viable options at their disposal.

The best value propositions make credible promises to solve important customer problems with quantifiable value in a way that competitors cannot easily match. The real power of a unique differentiator is in its:

  • Uniqueness
    What makes your offering difficult to replicate or substitute in the eyes of your target clients?
  • Relevance
    How specifically does your offering help your target clients with what matters most to them and their customers?
  • Proof
    Where have you successfully helped similar clients in similar situations?

Stress Test Your Unique Value Proposition
The best way to evaluate the power of your value proposition is to critically evaluate each aspect from your customers’ point of view.  Only then will you know if your offering is better, faster, and/or cheaper than the alternatives.

5 Questions to Stress Test Your Unique Value Proposition
Here are the top 5 questions to stress test your unique value proposition that we employ during strategy retreat facilitation.

  1. Do We Have a Unique Enough Client Niche or Characteristic?
    Do we distinctively specialize, understand, or excel within a specific niche in the eyes of our target clients to set us apart from the pack?

    B2C niches include: specific professions, locations, income levels, credit ratings, marital statuses, ages, genders, employment statuses, ethnicities, education levels, religious beliefs, etc.

    B2B Niches include: specific industries, market segments, geographic areas, buyer roles, degrees of complexity, types of approach, client challenges, amounts of risk, size of companies, levels of importance, meaningful causes, or packaging/bundling of solutions. For example,

    One of our Biotech clients focuses exclusively on ultra-rare diseases, one of our high tech clients concentrates solely on the Fortune 500 on the West Coast, and one of our services clients centers their organization entirely around companies that are a “hot mess.”

    Another example is the outdoor clothing company, Patagonia; they not only create some of the highest quality outdoor gear, but they also focus on an important cause related to their products – protecting and preserving nature.
  2. Do We Have Enough Cost Leadership?
    Are we so much cheaper or have such a better pricing model than everyone else in the eyes of our target clients to set us apart from the pack?

    Buyers always like to get more for less whenever possible.  Examples of companies that compete on cost are Amazon, Walmart, Dollar Shave Club, McDonald’s, RyanAir (an Irish low-cost airline), IKEA, and Tock (a new restaurant reservation system developed during COVID-19).

    Note: Not all companies that have achieved the lowest costs decide to offer the lowest prices and use it as their differentiator; they just use it to create higher margins.
  3. Do We Have the Best Quality?
    Do we clearly do it better, easier, more personalized, more innovative, more customer intimate, more consistently, with more added value, with better levels of service, or with less risk in the eyes of our target clients to set us apart from the pack?

    For example, Apple creates customer intimacy and emotional attachment to their brand through product design and user experience.  Ritz-Carlton Hotels creates customer intimacy through personalization by tracking and responding to customer needs from every guest interaction.

    Note: While many organizations believe that they offer the best customer service or that they care the most about their clients, customers tell us that they expect every company to care about them and to provide great customer service. To truly differentiate from others, buyers expect more from sellers.
  4. Do We Do It Faster Than the Competition?
    Do we do it measurably faster or with more responsiveness than everyone else in the eyes of our target clients to set us apart from the pack?

    Especially in highly priced competitive industries, speed through operational excellence and streamlined supply chains is becoming a distinguishing factor.  Examples include Amazon Prime’s two-day delivery and UberEATS “10-minute or less” delivery promise.

    Note: As companies emphasize swiftness, customers are being conditioned to expect things faster. 
  5. Do We Offer Unmatched Scale?
    Do we provide unmatched breadth and depth of offering/capability or an unrivaled range/bundling/unbundling of services and value that cannot be found elsewhere?

    Companies that have large economies of scale often create lasting advantages over smaller rivals.  For example, Procter and Gamble not only invests the most in consumer and market research, but their vast distribution network reaches billions of customers and blocks competitors from making meaningful inroads.  Similarly, UPS’ and FedEx’s massively entrenched distribution networks make it almost impossible for rivals to compete in a major way.

The Bottom Line
Can you and your customer-facing teams clearly articulate the unique value that your company provides your clients and their customers? Increasingly competitive and commoditized markets require companies to set themselves apart from the competition to survive and thrive. When you can define the “sweet spot” that no one else can fill as well, you will have the foundation for higher growth, loyalty, and margins.

If these questions about how to stress test your unique value proposition got you thinking, download Unique Value Proposition and Differentiation – What Sets You Apart?

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