Building a pricing model
in an acquired SME
A company with three historical pricing methods, margins ranging from 5% to 40%, and no logic connecting prices to costs or market. How we built a coherent model that the sales team understood and believed in.
The situation at acquisition
The new CEO acquired this French company through a search fund and inherited a business with three separate pricing approaches that had developed organically over the years. Each had its own logic, its own margin profile, and its own sales pitch. None had been designed with the company’s cost structure in mind. No one in the business could explain how the prices had originally been set.
Margins ranged from 5% to 40% depending on which method a salesperson used. In a highly competitive market with multiple national players, the pricing was neither transparent to clients nor defensible internally. There was no public pricing on the website. Each client interaction involved a degree of improvisation.
No link between price and cost
Prices had been set historically with no reference to the company’s actual cost structure. Some methods generated strong margins. Others barely covered delivery costs.
Highly competitive market
Several well-funded national players offered comparable services with clear, published pricing. The company had no structured answer to the competitive comparison a prospect would inevitably make.
What the diagnosis revealed
We started with a competitor analysis, mapping how the main players in the market structured and presented their pricing. We then worked with the CFO to build a full cost analysis, mapping the actual cost of delivering each service component against the prices being charged across the three existing methods.
The three pricing methods had not been designed. None reflected what it actually cost to deliver the service, and none had been tested against what competitors were charging for equivalent offerings.
The cost analysis also revealed which service components carried the highest delivery cost and were most frequently underpriced. This became the foundation for the new structure. The goal was a pricing model that could be explained clearly by any salesperson, defended against a competitive comparison, and that covered costs at every tier.
What was built
The work ran over several months in four phases, with the CEO, CFO, and sales team all involved at different points.
Competitor research and cost analysis
We mapped the pricing structure of the main national competitors, covering tier architecture, entry price points, add-on logic, and contract duration incentives. In parallel, we worked with the CFO to build a detailed cost model covering every service component: setup, delivery, technology, support, and account management. This gave the working group a shared factual base before any pricing decisions were made.
Working group with CFO, sales team and CEO
A structured working group was set up with the CFO, the sales team leads, and the CEO for critical decisions. The sessions used the competitor analysis and cost model as the starting point, then worked through the package architecture, the add-on logic, and the contract duration options. The sales team’s involvement was deliberate: the people who would present the pricing every day had to understand it, believe it was fair, and feel they could defend it against a prospect’s questions.
The output was a three-tier package model with a modular add-on structure. Each tier covered a defined scope of service at a margin that the cost analysis confirmed was sustainable. Add-ons allowed clients to build beyond the base package according to their specific needs.
Field test with the sales team
Before full rollout, the new pricing was tested in the field. Sales team members used the new packages and pitch in live client conversations and reported back on how prospects responded, where objections arose, and what needed adjustment. This phase was important for two reasons: it caught practical issues before they became systematic problems, and it gave the sales team ownership of the new model rather than having it handed down from above.
Sales Q&A document and implementation support
To support the rollout, we produced a structured Q&A document covering the most common objections and questions the sales team had encountered during the field test. It addressed how to explain each tier, how to handle comparisons with competitors, and how to position the add-on structure. The document gave new and existing sales team members a consistent reference point and reduced reliance on informal knowledge that varied from person to person.
What changed
Pricing methods consolidated into a single model that every salesperson could present and defend
Every tier confirmed against the full cost model before being presented to the sales team or clients
New packages tested in live sales conversations before full rollout, with feedback incorporated
The most immediate change was internal. For the first time, the sales team had a pricing model they understood completely. They knew what each tier included, what margin it generated, and how to position it against a competitor’s offer. The previous situation, where a salesperson might use one method or another depending on habit or instinct, was replaced by a single coherent pitch that could be trained, monitored, and improved.
The field test confirmed that clients responded well to the clarity of the new structure. A prospect comparing the company to a national competitor could now see an honest, structured offer rather than a proposal that felt assembled on the spot.
In most acquired SMEs, pricing is inherited. Before you change it, understand what you sell, who buys it, and what it costs to deliver.
In many acquired SMEs, pricing has never been designed. It has accumulated over years of individual decisions, competitive pressures, and sales team habits. The result is a structure that nobody fully owns and that nobody can fully defend. If you inherit this situation, the answer is not to raise or lower prices. It is to start with costs, competitors, and the profile of your target clients, then build a model that the people selling it understand completely.