Wednesday, August 13, 2025

Pricing and Packaging: A Strategic Lever for Growth

By David Ronald

Pricing and packaging are often underestimated levers of growth.

While product innovation and marketing tend to gain the spotlight, it’s often the pricing model and how the product is packaged that can ultimately make or break go-to-market success.

Get it right, and you’ll unlock new revenue streams, reduce churn, and boost customer satisfaction. Get it wrong, and even the best product may struggle to gain traction. 

In this blog I explore how you can use pricing and packaging as a strategic lever of growth.

A Synergistic Combination

It’s obvious to everyone that “pricing” refers to how much you charge for your product or service.

But what is “packaging” exactly? Well, “packaging” refers to how you structure your product. For example, what features are included in each plan, how do those features align with customer needs, and what value propositions are communicated at each level.

Together, pricing and packaging define how value is exchanged between you and your customer.

Pricing and packaging decisions must be rooted in customer segmentation. Not all users are the same – some are looking for basic functionality at a low cost, while others demand advanced features, scalability, and dedicated support (and are willing to pay a premium for it).

A one-size-fits-all approach rarely works.

Instead, you should offer tailored tiers or bundles that reflect the needs and willingness to pay of different customer groups.

Why It Matters

Poorly thought-out pricing and packaging can lead to multiple problems.

If the entry-level tier is too generous, users may never upgrade. If premium plans feel overpriced or misaligned with value, customers may churn or choose a competitor.

On the flip side, effective packaging can guide customers naturally toward higher-value plans, increase average revenue per user, and even shape the way the product is used.

For example, many SaaS companies adopt a “freemium to paid” model, where a free tier allows for broad adoption and product-led growth – while paid tiers unlock features for power users or businesses.

Others business chose to offer usage-based pricing to align cost with value (such as charging per API call, seat, or GB stored).  

The key is to make pricing feel fair, transparent, and scalable with customer success.

Optimizing Pricing and Packaging

Here are some bet practices for optimizing pricing and packaging: 

  • Research customer value drivers—Conduct interviews, surveys, and willingness-to-pay studies to understand what customers value and how much they’d pay for it.
  • Use data to iterate—Pricing and packaging are not set-it-and-forget-it. Use cohort analysis, A/B testing, and revenue metrics to test and refine your approach.
  • Communicate clearly—Avoid confusing buyers with pricing pages that create friction. Ensure customers can easily compare plans and understand what they’re getting.
  • Anchor with value—Use psychological principles like price anchoring and tier contrast to make higher-tier plans look more attractive.
  • Align incentives—Your internal sales and customer success teams should be incentivized to promote the right plans to the right users.

By following these best practices, companies can create pricing and packaging strategies that not only drive revenue but also enhance customer satisfaction and loyalty. 

Conclusion

Pricing and packaging are powerful strategic levers that influence how customers perceive your product, how they engage with it, and ultimately how your business performs.

The most successful companies recognize that pricing and packaging are integral parts of the overall product experience, not just afterthoughts or administrative details.

When thoughtfully designed and continuously refined, pricing and packaging actively create value for you – they will enable you to meet diverse customer needs, encourage adoption and expansion, and foster long-term loyalty.

Mastering pricing and packaging are essential for unlocking sustainable growth and differentiation. So, invest the time and resources to get these elements right, and you’ll set yourself up for success that lasts.

Thanks for reading.

Did you find this blog post helpful. If so, feel free to let me know why by sending an email to david@alphabetworks.com – I look forward to hearing from you.

Wednesday, August 6, 2025

AI Is Changing the Role of the CMO

By David Ronald 

You're accustomed to navigating change if you are a CMO – rising technologies, evolving customer expectations, emerging channels, and more.

But, today, AI is more than just another trend on the horizon.

It's fundamentally transforming the very fabric of marketing leadership, reshaping how CMOs think, act, and deliver value.

Forrester’s Predictions 2025 report notes that 64% of global B2B marketing leaders plan to increase spending on AI-driven technology in the next year. Forrester analysis also indicates that 30% of US CMOs are directly leading AI efforts in their organization, showing early adoption and internal leadership shifts.

From predictive analytics and content generation to hyper-personalized campaigns and real-time customer insights, AI is no longer an optional add-on – it’s becoming a core competency for today's CMO.  

 

In this blog post I examine what this transformation looks like in practice and what it means for the future of marketing leadership.

(You may also be interested in our blog post 5 Ways Artificial Intelligence Will Improve Marketing ROI.)  

From Intuition to Intelligence—AI as the New Strategic Brain

CMOs have traditionally relied on experience, creativity, and gut instinct to drive strategy.

While those skills are still essential, AI now augments them with speed and scale previously unimaginable.

AI empowers CMOs to: 

  • Predict behavior before it happens.
  • Deliver personalized experiences at scale.
  • Measure impact with precision.
  • Identify new opportunities with real-time data.

According to a McKinsey report, organizations that extensively use customer analytics are 23 times more likely to outperform competitors in new customer acquisition and 9x more likely to surpass them in customer loyalty. 

Case Study: Sephora

Sephora uses an AI-powered chatbot and a personalization engine are helping to redefine beauty retail. 

By analyzing customer preferences, previous purchases, and behavior patterns, the brand offers tailored product recommendations, virtual try-ons, and predictive insights.

What were some of the outcomes? 

  • A 50% increase in engagement through AI-powered in-app experiences.
  • Higher conversion rates from personalized marketing messages.
  • Increased customer lifetime value.

These results underscore how AI can create more meaningful, data-driven customer journeys that drive both satisfaction and sales.

Redefining Customer Experience—From Mass Campaigns to Individual Journeys

Many CMOs are shifting from campaign-centric thinking to journey-centric execution.

AI makes this shift possible by enabling real-time, one-to-one marketing, at scale. 

Using machine learning and natural language processing, AI can segment audiences dynamically, test messages continuously, and adjust campaigns instantly.  

This is adaptive learning. 

Case Study: Coca-Cola

Coca-Cola appears to be using AI for everything from analyzing social media conversations to generating creative content.

One notable initiative involved using AI algorithms to create more than 100,000 unique video ads tailored to different audiences across markets.

AI has helped Coca-Cola to accomplish the following: 

  • Reduce production costs.
  • Increase click-through rates by 4x.
  • Boost engagement through hyper-relevant messaging.

This level of personalization would be impossible manually. AI makes it scalable and repeatable. 

The Creative Renaissance—AI as a Co-Creator

AI’s role in marketing creativity is often misunderstood. It enhances human creativity, not replace it.

Some CMOs are learning to embrace AI tools that help generate ideas, optimize content, and even draft copy, freeing teams to focus on higher-order creative thinking.

Tools like ChatGPT, Copy, and Jasper and are already being used for: 

  • Blog drafting and content ideation.
  • SEO-optimized web copy generation.
  • Email subject line testing.
  • A/B testing of ad creatives.

As these tools evolve, they are becoming essential collaborators in the creative process, amplifying human ingenuity rather than diminishing it.

Case Study: Heinz and DALL·E

Heinz partnered with OpenAI's DALL·E to explore what "ketchup" looked like in AI-generated imagery. 

The results were consistent – most images resembled the iconic Heinz bottle, reinforcing the brand’s cultural presence.

This campaign delivered these results: 

  • Sparked a 10% uplift in brand sentiment.
  • Generated significant among of earned media.
  • Showcased how AI could be used in a playful, brand-enhancing way.

This is a powerful example of AI as a creative collaborator, not just a data tool. 

Real-Time Insights—The CMO as a Data-Driven Decision Maker

AI has the ability to transform a CMO’s dashboard from retrospective reporting to real-time insight generation.

With AI-powered analytics tools like Adobe Sensei, Google Cloud’s Looker, , and Salesforce Einstein, CMOs can now monitor campaigns, customer behavior, and ROI in real time.

AI can accomplish the following: 

  • Identify underperforming channels before money is wasted.
  • Detect anomalies in customer churn.
  • Recommend budget reallocations based on predictive ROI.
  • Model “what-if” scenarios to support strategic decisions.

According to a Salesforce whitepaper, 57% of marketing leaders say AI and machine learning are essential for creating a unified customer view. 

Case Study: Autodesk and IBM Watson

Autodesk used IBM Watson to create “AVA,” an AI-powered customer service agent. 

AVA handled over 30,000 customer support queries per month, reducing response times from days to seconds and freeing up human agents for more complex tasks.  

The ripple effect on marketing was profound: 

  • Better insights into customer pain points.
  • Improved content strategy.
  • Increased Net Promoter Scores (NPS) and retention.

AVA became a source of real-time, structured data - which is “gold” for any CMO. 

Organizational Impact—The CMO as a Change Agent

AI isn’t just changing what CMOs do—it’s changing who they need to be.  

To lead in the AI era, CMOs must: 

  • Embrace cross-functional leadership, working closely with data science, IT, and product.
  • Build teams with hybrid talent—marketers who understand data and technologists who grasp customer empathy.
  • Rethink traditional agency partnerships in favor of AI-powered platforms and in-house capabilities.
  • Champion ethical AI use and data privacy.

Here are some of the key skills that CMOs now need: 

Traditional CMO

Modern CMO

Brand building

Data fluency

Channel management

Tech stack fluency

Campaign execution

Continuous experimentation

Storytelling

Story + Strategy + Signal

In other words, a modern CMO must evolve into a Chief Intelligence Officer, guiding the organization not just with creative vision, but with evidence-based foresight.

Looking into the Future

As AI continues to evolve, we can expect to see the following: 

  • Generative AI driving even more creative assets, from video scripts to product designs.
  • Predictive personalization based on emotion, intent, and context.
  • Zero-click marketing where smart assistants (think Alexa, ChatGPT) become the buyer’s interface.
  • Autonomous campaign optimization, where AI adjusts spend and content in real-time across channels.
  • Voice and conversational AI as dominant marketing channels.

According to a study by Deloitte, companies using AI-powered personalization see a 40% increase in marketing ROI, and that gap will widen as early adopters double down. 

Conclusion

AI is no longer an emerging trend, but the new foundation of modern marketing leadership.  

This requires a full-scale mindset shift for CMOs. The role is evolving from storyteller and brand builder to orchestrator of intelligence, creativity, and real-time strategy.

As the technology accelerates, so too must the marketer’s ability to blend human intuition with machine-driven insight.

The CMOs who thrive in this new era will be those who embrace AI not as a threat, but as a partner, leveraging it to deepen customer relationships, drive smarter decisions, and fuel continuous innovation.

The future belongs to those ready to lead with data, scale with automation, and create with intelligence.

Thanks for reading.

Would you like to discuss this blog post? If so, my email is david@alphabetworks.com – I look forward to hearing from you.

Wednesday, July 30, 2025

Turn Your Customers Into Evangelists

By David Ronald

Traditional marketing tactics are losing their edge.

Ads get skipped, emails get ignored, and cold outreach rarely warms up.

So, how can you break through the noise?

Increasingly, the answer lies in community-driven growth, a strategy that transforms customers from passive users into passionate evangelists.

In this blog post I explore how you can increase revenue performance by turning customers into evangelists.

What Is Community-Driven Growth?

Community-driven growth is about much more than setting up a user forum or launching a Slack group.

It’s a deliberate strategy to cultivate spaces where customers can connect, share knowledge, and contribute to the success of a product or brand. It’s built on the idea that people trust people more than they brands.

And when customers feel a sense of ownership, they help you grow.

Look no further than companies like Figma, Notion, or Webflow. These brands built thriving communities of designers, creators, and developers who hosted meetups, shared templates, and organically spread the word.

What was the result? 

Hypergrowth. 

Hypergrowth fueled by advocacy, not by ads. 

Why Community Matters More Than Ever

Community creates authenticity and social proof at scale.

A community creates thousands of these interactions. It’s also a powerful lever for product feedback, customer success, and retention.

According to a study by Nielsen
, 92% of consumers trust recommendations from people they know even if they’ve never met them in person.

In B2B environments especially, community-driven growth can shorten sales cycles and increase deal velocity.

When prospects join a user group or attend a customer-led event, they get to “try before they buy”, experiencing not just the product, but the ecosystem around it. 

How to Turn Customers Into Evangelists

The bad news is that turning users into evangelists doesn’t happen by accident. 

The good news is that you can follow the examples set by others.

Here are a few key principles:

1. Start with Listening

Find your most engaged customers and ask them what they want from a community. Their needs should guide the structure (not your roadmap). 

2. Create Connection, Not Just Content

Content is important, but true communities thrive on conversation. Encourage peer-to-peer sharing, celebrate contributions, and make members feel seen. 

3. Empower Your Champions

Identify your power users and give them the tools to lead, whether it’s early access to features, speaking opportunities, or just public recognition. 

4. Align with Product and Support.

Your community should be an extension of your product experience. Involve customer success and support teams to ensure continuity and value. 

5. Invest in Platforms That Scale.

Pick a platform that supports both structured engagement and organic interaction – you can choose Discord, Slack, Circle, or a branded community hub. 

Conclusion

Community-driven growth turns your customer base into a flywheel, when done right.

New customers become contributors, contributors become champions, and champions attract the next wave of buyers.

It’s about creating a brand that customers feel proud to be part of.

Thanks for reading.

Would you like to discuss this blog post? If so my email address is david@alphabetworks.com – I look forward to hearing from you.

Wednesday, July 23, 2025

Pricing Using the Van Westendorp Method

By David Ronald  

Pricing a product can often feel more like art than strategy.  

Set the price too high, and you risk losing customers – but set it too low, and you leave money on the table or, worse, signal low quality. 

Fortunately, the Van Westendorp Price Sensitivity Meter (PSM) offers a structured and data-driven approach to pricing based on customer perceptions of value.  

Essentially, Van Westendorp's method leverages a survey to determine what price your buyers are willing to pay.  

In this post, I explain what the Van Westendorp PSM is, walk you through how to use it step by step, and provide guidance on interpreting the results.  

Yes, the analysis will appear a little intimidating at first, but stick with it, because it’s really not that challenging.  

And it will prove very helpful. 

(You may also be interested in our blog post The Benefits of Pricing Your Product for Value.)

What is the Van Westendorp Method?

The Price Sensitivity Meter is a survey-based tool used to determine acceptable price ranges and identify the optimal price point for a product or service based on consumer price perceptions. 

It was developed by Dutch economist Peter van Westendorp in the 1970s.  

The method asks respondents four simple yet powerful pricing questions, and their answers allow you to build a set of curves that intersect at meaningful points:

  • Indifference Price Point (IPP).
  • Optimal Price Point (OPP).
  • Point of Marginal Cheapness (PMC).
  • Point of Marginal Expensiveness (PME).

Van Westendorp's method is an ideal approach in any of the following circumstances:

  • Launching a new product or service.
  • Entering a new market.
  • Testing the perceived value before pricing adjustments.
  • Looking for a lightweight, survey-based pricing approach that's easier to deploy than full conjoint analysis.

It’s especially useful in early-stage go-to-market planning or pricing strategy discussions where you want to align pricing with consumer expectations.  

So, let’s get started.

The Four Van Westendorp Questions

The key questions you want to ask your buyers according to the Van Westendorp method are:

  1. At what price would you consider the product to be so inexpensive that you’d question its quality (ie, it’s too cheap)?
  2. At what price would you consider the product to be a bargain (ie, it’s cheap)?
  3. At what price would you begin to think the product is getting expensive, but still worth considering (ie, it’s expensive)?
  4. At what price would the product be so expensive that you would not consider buying it (ie, it’s too expensive)?

By collecting these four data points from a reasonably sized sample (something like 100+ respondents), you can chart cumulative frequency distributions and generate pricing insights.

Step-by-Step Guide: How to Use the Van Westendorp Method

Let's apply Van Westendorp’s PSM for a hypothetical product, such as a premium wireless mouse:

Step 1: Collect Data

Develop and send a survey to collect responses to the four questions provided in the prior section.  

Here is a sample response from one participant:

  • Too Cheap: $10
  • Cheap: $20
  • Expensive: $40
  • Too Expensive: $60

Repeat this for all respondents.

Step 2: Compile and Organize the Data

Once you've collected responses, compile them in a spreadsheet. 

Here’s an example, simplified for clarity: 

It’s important to realize that you need to calculate cumulative percentages in the case of “Too Cheap” and “Too Expensive”, and reverse cumulative percentages in the case of Cheap” and “Expensive”. Here’s why: 

Cumulative Percentages (for "Too Cheap" and "Too Expensive")

For these two questions, you want to calculate the percentage of people who say a given price is either too cheap or too expensive.

  • “Too Cheap” (Cumulative): At each price point, we add up all responses saying the product is too cheap at that price, or lower. So, as price increases, fewer people think it’s too cheap – the percentage goes up more slowly or levels off.
  • “Too Expensive” (Cumulative): At each price, we calculate the percentage saying the product is too expensive at that price, or higher. As the price goes up, more people think it’s too expensive, so the percentage increases.

Reverse Cumulative Percentages (for "Cheap" and "Expensive")

For these, you need to “flip the logic” and count the percentage of people who think the product is at least that cheap or that expensive (but still acceptable).

  • “Cheap” (Reverse Cumulative): At each price, it’s the percentage of people who say that price is still cheap or lower. As price increases, fewer people say “this is a bargain,” so the percentage decreases.
  • “Expensive” (Reverse Cumulative): At each price, it’s the percentage of people who say the product is still not too expensive. Again, as the price increases, fewer people are okay with it, so the percentage goes down.

Next, use the data compiled in this section to create four cumulative distribution curves.

Step 3: Plot the Data

Plot all four lines on a graph to create your Van Westendorp Price Sensitivity Meter. 

Here is a graphical representation based on the simplified dataset: 

 

What does the graph tell us? 

Read on because this is where things get really interesting.

Step 4: Analyze the Intersection Points

From the graph we can pinpoint four important thresholds where the lines intersect: 

Step 5: Determine Your Price Range and Strategy

Now you can use this information to develop your pricing strategy:

  • Target price zone: $30–$32, which balances value perception and maximizes appeal.
  • Pricing closer to $32 leverages the product’s full perceived value and remains just under the PME threshold. 
  • Pricing around $28–29 appeals to value-conscious buyers who still expect quality.
  • Avoid pricing below $27, as it risks signaling poor quality.

This strategy gives you flexibility to adjust based on positioning, customer segments, or promotional goals while staying within the optimal perception range.

Tips for Deploying the Van Westendorp Method Effectively

Now, let's shift our focus from analysis and consider how to best apply the Van Westendorp PSM: 

1. Segment Your Audience

Analyze results by demographic or behavioral segments (for example, enterprise vs. consumer users, power users vs. casual buyers). Different segments may have different price perceptions. 

2. Combine with Conjoint or Gabor-Granger

Van Westendorp is great for perception-based pricing. If you need willingness-to-pay or trade-off modeling, consider pairing it with conjoint analysis or Gabor-Granger pricing for deeper insights. 

3. Use Realistic Context

Frame the product description carefully to avoid skewing results. Provide context around features and benefits so respondents evaluate based on perceived value, not guesses.

4. Avoid Leading Questions

Do not show suggested price ranges in the question. Let your buyers input price points freely or use broad ranges if using sliders to guide answers. 

5. Validate with Market Testing

Yes, Van Westendorp helps identify perceived value, but it’s still theoretical – always validate findings with A/B pricing tests, especially in digital or SaaS contexts. 

Limitations of the Van Westendorp Method

While useful, the Van Westendorp method is not perfect. 

Some of the limitations to be aware of include: 

  • It relies on self-reported pricing, which may not reflect actual buying behavior.
  • It assumes price is a primary purchase driver, which may not apply in all cases.
  • It doesn’t capture competitive context or feature trade-offs.
  • It lacks the depth of conjoint analysis, which measures feature-price preferences.

That said, it’s a fast, inexpensive way to collect directional insights—ideal for early-stage product launches or refining existing price strategies.

Conclusion

The Van Westendorp Price Sensitivity Meter is a powerful, customer-driven tool that helps you find a price range that aligns with perceived value and purchasing comfort.

By asking just four questions, you can uncover the psychological price boundaries for your target market, and price with confidence rather than guesswork.

Van Westendorp offers a blend of simplicity and strategic insight that makes it an essential tool in any marketer or product manager’s toolkit, whether you're launching a new product or revisiting your pricing strategy.

Thanks for reading.

Would you like to discuss how to price your next product using the Van Westendorp method? If so, get in touch with me at david@alphabetworks.com and let’s discuss how.


Wednesday, July 16, 2025

Aligning Marketing and Product Teams for Agile Innovation

By David Ronald

The relationship between marketing and product teams can feel like a game of telephone in many organizations.

Product builds what they believe the market wants; marketing crafts messaging they think fits the product.

What's the result?

A disconnect that leads to misaligned launches, underperforming campaigns, and frustrated customers.  

But in an age where speed, relevance, and iteration are key to growth, aligning product and marketing teams is a competitive advantage. 

From Siloed to Synchronized

Marketing teams and product teams have operated in silos traditionally - product owns features and marketing owns messaging.

Yet, this division is artificial - great product experiences start with a deep understanding of the customer, and no one is closer to the voice of the customer than your marketing team.

When marketing is looped into the product development process early, two things can happen: 

  1. Customer insights shape the roadmap—marketing brings competitive intel, customer pain points, and content engagement data that help prioritize features customers truly want.
  2. Launches are more effective—messaging is sharper, positioning is clearer, and go-to-market is faster because both teams were aligned from the start.

This collaboration turns product marketing into a strategic growth lever, not just a last-mile function.

Agile Innovation Needs Cross-Functional Rhythm

Agile methodologies have transformed how products are built, but less often how they’re marketed. 

To reap the benefits of Agile, marketing and product must operate on the same cadence.

This means the following: 

  • Shared sprint reviews where both teams hear what’s shipping and why.
  • Joint retrospectives to unpack what went well and what didn’t during product launches.
  • Collaborative roadmaps that factor in market trends, brand positioning, and buyer feedback.

When this rhythm exists, it’s easier to test, learn, and iterate – not just on features, but on messaging, campaigns, and product-market fit itself.

Real-World Alignment in Action

At high-growth startups and product-led companies, this alignment is table stakes, not theoretical. 

  • Product marketers often sit in product stand-ups and contribute to early feature discussions.
  • User research is a shared responsibility. Marketing runs surveys or listens to sales calls; product interviews beta users.
  • Launch teams are cross-functional by default. Engineering, product, marketing, and sales gather to define success metrics, rollout plans, and feedback loops.

What's the result now?  

Products are easier to explain. Buyers are easier to convert and growth becomes more sustainable.

Conclusion

At the end of the day, both product and marketing serve the same mission - delivering value to customers. When that’s the North Star, alignment should follow naturally.

So, if your teams are feeling friction, don’t start with tools or processes - start with a conversation and ask these questions: 

  • “What do we both need to succeed?”
  • “How can we make customer feedback more central to our decisions?”
  • “Where are we assuming alignment, but missing it?”

Agile innovation is about learning fast, and the best way to learn faster is together.

Thanks for reading.

Would you like to discuss this blog post?

If so, my email is david@alphabetworks.com – I look forward to hearing from you.