How Managed Service Providers Can Eliminate Price As An Objection

Always focus on value when you’re pricing IT services. Don’t worry about charging too much (potential clients aren’t always looking for the cheapest option). In fact, prospects are willing to pay much higher prices if they feel like you’re delivering value to them. Eliminating price as an objection is dependent on you being able to develop a value-based pricing model for your MSP. Show your value, and pricing will be secondary.

Lower prices don’t equate to more business

First and foremost, lower prices don’t equate to more business (it’s that simple). Charging too little is one of the biggest blunders an MSP can make; it’s something I see all the time. Selling yourself short causes a lot business problems, including an excess of IT tickets, low profit margins and no opportunities for business growth at all. Charging not enough can also lead to employees being spread too thin and a business barely getting by. You can avoid this by shifting the conversation from your price to your value.

Why focus on value?

Nowadays, anyone with a credit card can become an MSP. When providers look similar, prospects will use price as a deciding factor. That’s an issue because there are low-cost providers in every market. From experience, what I can tell you is this: I’ve been on more than 1,500 sales calls as an MSP, and on nearly every single one of those calls, the pricing I offered those prospective clients was higher than what they were paying. My competitors were selling themselves short; they were pitching price instead of value to potential clients. In order to eliminate price as an objection, you need to change the way prospects look at what they spend on IT support in total and what they receive in return.

Change the frame of reference

Keep everything simple. You don’t need to dissect every detail to charge the right price for your services. Here’s what you need to be able to do when a competitor’s price is lower than yours: You must be able show prospects how investing a little more will impact the big cost in their businesses. I call this process reframing, which means changing the frame of reference prospects have around IT costs and results. If you can get your prospective clients to feel like investing a little more will increase productivity, reduce risk and lower other costs, they’ll gladly invest more.

Show the prospect why you need to charge more

You need to be able to show prospects what they’ll get in return for paying more. Pitching your experience, better response times and superior tools won’t get you anywhere; your competitors will say the same things. You need to be more specific. In other words, which specific process performed by which role will impact results differently than your competitors. As you know, I call this developing your Super Power.

Eliminating price as an objective begins with changing your mindset. Creating a value-based pricing model for your MSP will help you achieve results by reframing the way prospects view IT costs and outcomes, and clearly defining your MSP Super Power.

Interested in learning more about pricing your IT services? Download a free guide to packaging and pricing your services.

MSP Sales Mistakes

TOPICS: MSP pricingMSP profitabilitypackaging and pricingtop MSPworld class msp
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