Want to Stand Out From the Crowd? Know Your Unique Value Proposition. Often people turn to a price-cutting strategy to compete but this can lead to a race to the bottom. Instead, entrepreneurs should focus on other ways to stand out and gain customers. Our marketing expert Joanna Lord talks shares six ways.
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Q: In a competitive SaaS market where you aren't the lowest cost game in town, what's the best messaging to use to differentiate yourself from the competition?
A: Getting at your unique value proposition -- a UVP is a differentiating factor that would compel a prospect to choose your company over a competitor -- can be challenging no matter the business model, but it's such an important exercise. Those companies that rely on a low price as a UVP are often playing a very defensive game, as they are at high risk for a new or existing competitor to undercut them and suddenly steal their momentum.
The better alternative is to invest time into nailing down a UVP that transcends pricing and market trends.
Below are a few tips for identifying your UVP and for standing out in a competitive SaaS market.
1: Focus and features. A great place to start when trying to differentiate yourself from the competition is on the features or company focus side of things. Have you built out a certain part of your platform exhaustively because you think it matters most in your industry? Maybe it's reporting and analytics or maybe its mobile abilities. Whatever your strongest feature set is, you can start there. Build a story around why it's so critical for your prospects and then point to how focused your company is on this.
2. Partnerships and integrations. In a world where compatibility and cloud-based convenience matters, stressing your platforms integration abilities or the partnerships you have in place could be very powerful. Build out a section on your site that shows off how convenient and powerful your platform is when integrated with other products of value to your prospects. Demonstrating that you can play well in market and you are building for their convenience is extremely powerful (and a lot of your competitors probably aren't thinking about that).
3. Customer service. If your competitors are standing on low prices as their UVP, a great place to point to is your support abilities. Have you invested in a great customer-service team? Do you have great onboarding and educational content once in your product? What about technical documentation? Spotlighting your abilities to help customers for the long haul is a way of saying "they might just want your money, but we want to partner for your success" which can be a great way to stand out.
4. Design and user experience. Another great way to shine is to make the experience of discovery, comparison, decision and ongoing user experience stunning and seamless. If you invest is making your platform easy to use and understand then you often outshine your competitors. People are willing to pay for quality and a beautiful design is more important to consumers than ever before. Use this to your advantage and invest in design and user experience.
5. Focus on your WHY. If you haven't watched Simon Sinek's TED talk on the Golden Circle Theory, do it now. His premise is companies can focus on WHAT they sell (i.e. the products) and HOW they sell (i.e. pricing, or great customer service), but the best companies focus on WHY they do what they do. This gets at the heart of introducing prospects to your core values and motivations for building this product and sharing it with the world. If you invest time into getting at your WHY, it often builds a very powerful story your prospects can get behind and align with.
6. Spin your price in your favor. If you cost more than "why" do you cost more? I would argue that if you are a higher price, you have a justifiable reason -- or at least I hope so. Maybe your product costs more on the development side, because it scales better or is more reliable. Perhaps it costs more because it comes with account management or better customer service? Whatever the reason, put it front and center and explain that price delta. It can often go in your favor.
It's a challenge to get at your differentiating story but so valuable when you do. Identify what is the most common pain point for your prospects and see if it can't feed into your UVP. While UVPs are meant to help people quickly understand what your product stands for and why you beat out competitor options, they are also useful to help steer your company's efforts when it comes to prioritization. Putting the time in now brings more sales, better company-wide alignment and market differentiation -- all great strategies to invest in as early as possible.