Priced to Sell

In the current economic climate, conversations around service pricing are often going to be tense and possibly even counterproductive. When an MSP receives a call asking for a quote, odds are the prospect is price shopping. MSPs that have built their pricing around the actual value they create may not fare well in a price-only comparison.

That’s why it’s important to shift those inquiries into a different type of conversation that focuses on the solutions the potential client needs, and the value the MSP can create for them.

These types of conversations not only help improve an MSP’s likelihood of winning the business, but it also allows MSPs to weed out prospects that aren’t a good fit for their business. They may be too small or not have the budget to afford your services.

How can you shift the conversation away from price and toward value? Here are a few strategies that can help:

Make sure you understand your pricing. Don’t hesitate to quote a ballpark figure to a prospect, even if you think you might be charging more than what they’re initially willing to pay. The key here is to fully understand why you charge what you do and to be able to explain that to prospects. Whatever pricing model you use, it should be based on real costs and client value, and you should be able to communicate that clearly.

Don’t let prospects self-diagnose their problems. They may have some idea of what challenges they need to solve, but may not be accurately diagnosing the cause of those problems. Those inaccurate diagnoses will affect client expectations around services and pricing. Help them with the diagnoses, so that everyone is on the same page when it comes to developing a solution. This also ensures that as an MSP, you are showcasing your consultative approach and positioning yourself as a trusted advisor to your prospects.

Qualify the prospect before providing a quote. In the early stages of the conversation, get data from them that will help guide your diagnosis and quoting activities. Find out how many users they have, how many locations, what they spend on IT currently, and which systems they have in place. If there are other factors that will affect the scope and cost of the solution, ask about those as well. It will be easier to determine whether the client is a fit for your MSP business before you start delivering services.

Guide prospects through the value conversation. Once you’ve qualified a prospect and determined their business challenges, use data from other clients’ experiences to spell out the type of value you can provide (e.g., headcount reduction, faster response times, fewer failures, more uptime or other relevant metrics). By questioning the prospect about their needs and using appropriate examples from your own experience to define potential improvements, you can keep them focused on value.

Link their needs with your value. Quantifying potential value is another critical part of the conversation. You also have to make sure the prospect sees the link between their needs and the importance of their resources, such as network uptime and data availability. Aligning these points makes the price conversation much easier.

Don’t get roped into price-only discussions. Prospects are always going to be able to find a cheaper provider. Your goal is to show them that they need to focus on their actual needs, not a price tag.

If you’re confident in the value of the services you provide and take charge of a prospect call by asking the right questions to qualify the client, it will be much simpler to talk about pricing. Prospects that only want to talk about price may not have a firm grasp on what it takes to secure and protect them, and to keep them productive. Helping them identify the right steps involved with this will give your quote the proper context and will ultimately lead to a more successful client engagement in the long run.

Scott Bennett is Senior Director of MSP Sales for Barracuda MSP, a provider of security and data protection solutions for managed services providers, and he plays a key role in the development and growth of partner relationships.

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TOPICS: High-Value ServicesMSP pricingMSP Valuepackaging and pricing
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