Profitability and pricing: recover the margin you already have

Pricing isn't a sales detail. It's the architecture of your relationship with your customers, and often the fastest margin to recover.

By Thibaut Vanderhofstadt · CEO of Sortlist for 11 years, founder of FounderOS.

A growing company's profitability is rarely decided by the total. It's decided customer by customer and offer by offer. Poorly built pricing makes good customers pay for bad ones, and growth hides the problem until the day cash stops following.

Why growth hides margin

As long as revenue goes up, everything seems fine. You hire, launch offers, sign customers. Quarter after quarter, results don't quite follow the plan, but there's always an explanation.

The problem shows when you stop looking at the total. Some customers consume far more value than they pay for. Some offers bring in revenue and lose money. The single flat fee, so convenient for selling, often ends up as a buffet: the ones who eat the most pay the same as everyone else.

Four signs of broken pricing

Your oldest customers are also your least profitable.
Churn doesn't drop, despite all your efforts.
Raising your prices scares you.
You avoid looking at your customer cohorts.
You invest 20% more and revenue only follows by 5 to 10%.

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What works: look, quantify, fix

1. Measure in euros, not percentages. "+40% growth" doesn't tell you whether the company funds its team. Net MRR added each month, in euros, does. The rate is an outcome; steer the causes.

2. Read your margin per customer. For each large customer: what they pay, what they cost you to serve. You'll find VIP customers, profitable ones to multiply, and a few squatters you serve at a loss.

3. Put a number on each lever. 1% on price, 1% on volume, 1% on fixed costs, 1% on variable costs: they don't weigh the same. On paper, price is almost always the strongest. It's also the least used, because it's scary.

4. Fix it in waves. New customers first, then the lightest users, then the heaviest. Short, finite pain beats a margin that melts for years.

What FounderOS installs

P&L & levers is part of the Revenue & Profit Engine, from week 3: your management P&L month by month from your accounting, margin per offer, your Break Even, and the levers quantified for the next 90 days. The Copilot maps your accounts; you validate. The AI makes up no numbers: they come from your data and readable formulas.

FounderOS P&L & levers screen on a fictional company. — P&L & levers: margin per offer and Break Even. Real product screen, on a fictional company: Atelier Brume.

What the books that matter say

Confessions of the Pricing Man

Hermann Simon

Price is the most powerful and most neglected profit lever. A short book that gives you the nerve to touch it.

For Entrepreneurs

David Skok

His articles on SaaS unit economics (LTV, CAC, payback) remain the reference for knowing whether your growth creates or destroys value.

Try it nowWhat 1% is worthPrice, volume, fixed costs, variable costs: what 1% on each is worth. 3 minutes.

Frequently asked questions

How do I raise prices without losing customers?

Start with new customers, then with those consuming the most value for what they pay. You'll lose some customers; what matters is losing the ones who cost you money. Do the maths first: with a 60% margin, you come out ahead as long as you lose less than about 1.6% of your sales for a 1% price increase.

How do I calculate margin per customer?

The customer's revenue over 12 months, minus what it costs to serve them: team time at loaded cost plus direct costs. The “Your buffet” tool does it in 15 minutes for your main customers.

What LTV/CAC ratio should I aim for?

At least 3. Between 4 and 5 is a lasting advantage. Below 3, growth costs more than it brings in.

When should I rethink my pricing model?

When the data suggests it, not when it forces it. And never let underpriced contracts sit in your portfolio for more than 18 months.

Go further We forced a pricing migration · The full article on Thibaut's blog