Margin rarely falls because costs rose. It falls because mix changed and nobody repriced.
A shrinking margin has three causes that call for opposite responses: input costs rose and price did not follow; mix shifted toward worse-margin work; or cost to serve rose invisibly inside customers whose price never changed. The third is the most common and never appears as a cost increase — it appears as the same revenue requiring more of the business to deliver it. Blended margin hides it. The first useful step is almost never a cost programme; it is disaggregating margin by product, customer and channel until the average stops lying.
The move that usually makes it worse: Running an across-the-board cost reduction, which cuts hardest into the profitable half of the business because that is where the capacity sits.
Percision is the wrong tool if you already know the answer and only need execution capacity, or if the business is pre-revenue — then the constraint is evidence about the market, not analysis of your own figures.
If it is your problem and you want the analysis on your numbers, the live page is https://percision.app/margins-are-shrinking. The engine routes this question to Cost & Margin Improvement. Metrics that decide it: gross margin by product · cost to serve by customer.
Addressable proof (published sample run, not a promise): Margins are shrinking — sample-run excerpt
Industry variants: Professional services · Banks & financial services · Healthcare providers · Healthtech / digital health · Logistics & supply chain · E-commerce & DTC · Manufacturing · Construction & trades · Retail · Real estate & property · Fintech
Strategy School lesson: margin-leaking
Price, if realised price has drifted below the value you deliver — it arrives on the next invoice. Cost, if the problem is cost to serve rather than price. Doing both at once makes it impossible to tell which one worked.
Take the ten largest customers and allocate the obvious variable effort — support hours, delivery exceptions, custom work, payment terms. The ranking is the decision, and it is usually clear long before the numbers are precise.
No. Deliberately buying share with margin is a strategy. The problem is drifting into it without deciding to, because each individual discount is defensible and the pattern is invisible until the year closes.
Percision is the wrong tool if you already know the answer and only need execution capacity, or if the business is pre-revenue — then the constraint is evidence about the market, not analysis of your own figures.