Customer Value Proposition Is It The Same As The USP?

Is the customer value proposition (CVP) just a new (and posher) way of saying unique selling proposition (USP) or is it something different?

There does seem some confusion on the Internet but for me they are different but connected concepts but before I explain how I see the customer value proposition and the USP fit together let's have a quick look at definitions.

Definitions of Customer Value Proposition and USP

A customer value proposition is the "sum total of benefits which a vendor promises that a customer will receive in return for the customer's associated payment (or other value-transfer). Wikipedia on Customer Value Proposition

For the USP Wikipedia goes back to the original Rosser Reeves advertising based definition of the USP which comes in three parts:

1. The advertisement must make a proposition to the prospective customer
    
   
2. The proposition must be something that the competition cannot or does not offer
    
   
3. The proposition is strong enough to move the masses.
   

Wikipedia on USP / Unique Selling Proposition

My Thoughts On Customer Value Proposition vs USP

I don't so much as disagree with what Wikipedia says about the customer value proposition and USP as think that it doesn't go far enough to explain the difference between these two concepts.

For me it is the difference between competitive strategy and a marketing message.

The customer value proposition and USP need to fit together but they are not necessarily the same thing and shouldn't be used as if they were.

I think of customer value proposition as a competitive strategy term which explains the basis for how the business plans to win in a chosen market by adding value to the customer over and above the price the customer pays.

The customer value proposition basically answers three questions

1. Who are the customers
    
   
2. What are they going to buy
    
   
3. Why are they going to buy from us rather than from a competitor (or even not do anything)

The customer value proposition also has to explicitly fit into the capabilities of the business so that it clear what commitments it makes from the operations side of the business. Effective differentiation strategies only work if the business can back up the marketing promises.

A USP in contrast is a direct message to your targeted group of customers which explains what and why they should buy and why from you.

The USP implies the target group rather than announces it explicitly as the customer value proposition does.

The customer group, niche or market segment (I don't care what you call it) is self selecting by the customers - you know what you are interested in - but has to be selected by the business.

A Customer Value Proposition / USP Example

Probably the most cited example of a USP because it is so good and has been so successful, is the Domino's Pizza

"You get fresh, hot pizza delivered to your door in 30 minutes or less -- or it's free."   

Going back to the Rosser Reeves definition of USP, there is a clear proposition, at the time it was unique and it certainly moved the masses.

But it doesn't define who the target group of customers is but that was an important part of the success of Domino's and their customer value proposition.

If you read into their history, you will see that Domino's focused on hungry students who wanted quick, filling and cheap food. They had no gourmet pretensions or concerns over nourishment or weight control.

So Domino's opened their stores near the university campuses which also gave them access to eager part time employees.

Incidentally this famous USP was dropped in 1993 because of lawsuits for dangerous driving as delivery people took reckless risks to meet the deadline.

USP / Customer Value Proposition Video

I found this 8 minute video from Dr Lisa Lang, the theory of constraints expert.

  

Lisa covers the "Gee Whizz" and "So What" tests where statements make no impact on the customer and just become part of the general advertising clutter.

The other big danger is the U of the USP can be lost very easily.

If a competitor can copy easily, the marketing message loses impact.

Dr Lisa Lang introduces the idea of a "Mafia offer" which is a theory of constraints term to describe an offer that is so good, it cannot be turned down but your competition can't or won't match.

Mark Joyner's Irresistible Offer

This is an approach to the problem I like and I see it very much as an update to Rosser Reeves' concept of the USP which has been defined in many different ways.

An “irresistible offer” has three elements:

• High ROI offer - a customer will get more value from owning your product than they would keeping their money in their pocket or buying someone else’s product

• A touchstone - something that quickly explains what you’re selling, how much it costs and why the customer should buy.
  
  
• Believability - if the offer looks too good to be true, it probably is

The Irresistible Offer was a best selling book for Mark Joyner and it is now available as a free pdf download - highly recommended.

The Irresistible Offer (Amazon.com reviewers love it too - 64 five star ratings so far)

Disclosure - I am an affiliate Mark Joyner and Amazon. If you buy after clicking through from my link, I will be paid a commission.