5 Proven Ways to Improve Margins Through Pricing and Cost Discipline

Low profitability can bring surprises, even when you are growing.

Businesses get too busy chasing top-line growth without a clear view of what it costs them.

Growth without margins is a dangerous illusion.

When companies fail to protect their pricing or let costs creep (camouflaged under strong revenues), company’s can develop financial weaknesses.

Improving margins requires a disciplined system for reviewing pricing policies, tightening cost structures, and aligning both to the company’s strategic goals.

In this post, we draw from the key lessons discussed in our case study to highlight five best practices that help companies improve profitability, by leveraging the information they already have.

1. Audit Your Pricing Power Quarterly

A stagnant price is a silent killer.

Most companies haven’t adjusted their pricing in years, even as costs increase for them.

Best Practice:
Implement a quarterly pricing audit. This should evaluate:

• Competitor pricing changes

• Value delivered vs. value captured

• Customer willingness to pay

Use the audit to identify underpriced offerings, flag discounts that erode margins, and spot opportunities for premium positioning. For B2B companies, this process is especially powerful when paired with customer segmentation and usage data.

Key Insight from our Case Study:
The companies with the strongest margins aren’t necessarily the lowest-cost providers; they’re the ones who understand their value and defend their pricing power accordingly.

2. Institute a “Zero-Based” Cost Review Annually

Fixed costs have a way of growing quietly. What was once essential becomes habitual. Margin-minded companies routinely challenge these assumptions.

Best Practice:
Use a zero-based review at least once per year. Instead of assuming existing costs are justified, start from zero and ask:

• What would we spend if we had to justify every dollar today?

• Which costs are aligned with our current strategy and priorities?

• Where are we overpaying for convenience/comfort?

This is about being intentional in the allocation of resources. Companies often find they can fund strategic initiatives by cutting back on outdated or unproductive expenses.

3. Tie Variable Compensation to Margin Metrics

If your sales team is only rewarded for top-line growth, they’ll push volume even if it kills profitability. The same applies to procurement and operations teams who aren’t incentivized to control costs or optimize spend.

Best Practice:
Make gross profit a core component of variable compensation. Whether it's per sale, per project, or per quarter, align incentives with what actually drives sustainable business value.

Key Insight from the Video:
One of the fastest levers to improve margin discipline is ensuring that the people making daily decisions feel responsible for profit, not just activity. If you tie their annual bonuses to that, yes, you will be spending more. You will be also driving behavior and getting an ROI that otherwise might not exist.

4. Create a Dynamic Cost Dashboard

Companies that wait until month-end to review financials are already behind. Real-time visibility into costs (especially in procurement, labor, and overhead) is a competitive advantage.

Best Practice:
Develop a live dashboard in Microsoft Excel or Google Sheets that breaks down key cost categories and flags variances early. A simple tool that uses data from your existing accounting system can:

• Alert managers of sudden cost increases

• Track cost-per-unit trends in real time

• Improve forecasting accuracy

This empowers faster decisions. Teams can intervene before small issues become large profit leaks.

5. Bundle Value, Not Discounts

Many businesses try to win customers by discounting. But margin-focused companies look for ways to increase value without sacrificing price.

Best Practice:
Rethink how you bundle and communicate value. Instead of dropping price, enhance the offer by:

• Including service layers that cost little but are perceived as valuable

• Offering speed, convenience, or exclusivity to your customers

• Highlighting the cost of not choosing your solution

Key Insight from the Video:
Discounts are easy but destructive. Creative value packaging preserves margins while still giving customers a compelling reason to buy.

Conclusion

Improving margins requires company-wide discipline.

The five practices above: pricing audits, zero-based reviews, compensation alignment, dynamic dashboards, and value-based bundling; can be adopted in any industry to drive meaningful gains in profitability.

Companies that master margin discipline are better positioned to scale, reinvest in growth, and withstand market volatility. They grow not by doing more, but by doing what matters most… and doing it with precision.