Unit Economics & Cost-to-Serve Models

Growing revenue in nonprofitable domains is a byproduct of modern-day operational complexity especially in service businesses. Unit margins look healthy on paper, but overhead, complexity, service levels, and operational effort quietly erode returns. Different customers, products, or channels consume vastly different resources, yet they’re often priced and managed as if they were the same. Without clear unit economics and cost-to-serve visibility, leaders risk scaling unprofitable growth and making pricing or prioritisation decisions based on incomplete information.

Unit Economics & Cost-to-Serve Models bring clarity to where value is actually created — and where it’s destroyed. This solution breaks profitability down to the unit, customer, product, or channel level, accounting for both direct costs and the real operational effort required to serve demand. With this clarity, you can identify profitable growth paths, redesign pricing and service strategies, prioritise the right customers, and make confident decisions about where to invest — and where to stop.

INDUSTRY EXPERTISE

SaaS & IT

Healthcare

E-commerce

Logistics

Financial Services

Core Modules

Unit Revenue & Cost Breakdown
Clear view of revenue and direct costs per unit, order, customer, or product.

Contribution Margin Analysis
Baseline contribution margin before overhead and complexity effects.

Cost Classification (Direct vs Indirect)
Separates costs that scale with volume from shared or support costs.

Simple Cost Allocation Framework
High-level allocation of indirect costs to units using transparent rules.

Break-Even Analysis (Per Unit / Customer)
Identifies minimum volume or revenue needed to cover costs.

Average Cost-to-Serve Estimate
Baseline estimate of service costs applied evenly across units.

High-Level Profitability Snapshot
Quick view of which units are profitable vs marginal vs loss-making.

Unit Economics Summary View
One-page summary of core unit-level economics.

Extended Modules

Advanced Modules

Segmented Unit Economics
Profitability by customer segment, product line, channel, or geography.

Activity-Based Cost-to-Serve Analysis
Assigns service and operational costs based on activities consumed.

Service Complexity Cost Analysis
Quantifies the cost impact of customisation, urgency, volume variability, or exceptions.

Cost-to-Serve by Customer / Channel
End-to-end cost view from order intake to delivery and support.

Margin Bridge & Decomposition
Explains margin differences via price, mix, volume, and service effort.

Customer Behaviour Impact Analysis
Links order frequency, returns, payment behaviour, or support usage to cost.

Profitability Heatmaps
Visual identification of high-value vs value-destroying units.

Cost-to-Serve Sensitivity Analysis
Tests how changes in behaviour or service levels affect profitability.

Predictive Unit Economics Model
Uses statistical or ML models to forecast unit-level profitability as volume, mix, or behaviour changes.

Prescriptive Pricing Optimisation Engine
Optimisation-based recommendations for pricing, discounts, or minimum order to improve margins.

Service-Level Optimisation Model
Prescribes optimal service-level tiers by customer or segment under cost constraints.

Cost-to-Serve Simulation Engine
Simulates thousands of demand and behaviour scenarios to quantify profit risk and upside.

Customer Portfolio Optimisation
Recommends which customers, products, or channels to prioritise, renegotiate, or exit.

Cohort-Based Profitability Forecasting
Predicts lifetime contribution by customer cohort using retention and behaviour patterns.

Profitability Risk Scoring
Statistical scoring of units or customers based on likelihood of future value erosion.

Decision-Ready Profitability Dashboard
Combines predictive insights and prescriptive recommendations into a clear executive view.

Understanding basic unit profitability and where margins come from.

In-depth profitability analysis to understand drivers & hidden patterns.

Decision support models that optimise pricing, service levels, & growth mix