How to package your services and how much to charge for them are two major issues for every business. MSPs, especially, struggle with these questions, most importantly because:
- The market is saturated with MSPs offering basically the same services.
- MSPs view low prices as a competitive advantage, so they don’t want to charge more than the competition.
Find out three MSP packaging and pricing strategies that can help you increase your profits and generate more monthly recurring revenue.
Sell More Than Services
Do you want to be an IT service provider or a strategic partner? Depending on how you package your offering, you could be a high volume/low profit margin MSP, or you could be a World Class MSP.
Beyond the usual IT services and technology that all MSPs offer, you need a competitive advantage to make your MSP package more compelling. This is your MSP Super Power, a unique process your business offers that other MSPs don’t. Your Super Power directly benefits your customers’ businesses, and it adds value that other MSPs can’t provide.
Explain Your Value
It’s easy to tell a client how the technology and services your MSP provides can minimize their IT problems. But are you explaining how your MSP service offering could help clients achieve their business goals?
If a client has streamlined operations because you recommended and implemented new software, you’re helping them save money in the long run. Or maybe proactive network management by your MSP diminishes the downtime that negative affects a client’s productivity.
Talk to clients about their IT pains and how they affect their employees, efficiency and bottom line. Then explain how partnering with your MSP solves those problems for a long-term positive impact.
Charge What You're Worth
Packaging your MSP service offering the right way is only the beginning. You have to charge what you're worth, too. Average AISP (all in seat price) for the majority of MSPs is low – under $100. Low AISP affects every aspect of your business, since it usually involves a net profit under 10%.
Compare those numbers to those of World Class MSPs. Their AISPs range from $120 to $160, and their net profit margins can reach 25% to 35%. Imagine the impact that tripling your profit margin would have on your business!
If you’re selling your strategic IT direction and you’ve become a trusted business partner, your support offering is worth more. Your MSP Super Power comes into play here, too. When you’re strategic about how you package and price your services, you’re able to command higher prices from clients.
Determine if your MSP numbers are average or World Class. Use this free calculator now.