Discover how you can break free from underpricing traps , build value-based offerings , and boost profitability .
STATE OF THE INDUSTRY
Stop Racing To The Bottom :
Strategies To Elevate
Your MSP ’ s Pricing And Value
Discover how you can break free from underpricing traps , build value-based offerings , and boost profitability .
BY SARAH JORDAN
Gary Pica , Founder TruMethods
Charles Henson , Owner Nashville Computer
Erick Simpson , CEO and Chief Strategist , Channel Mastered
Many MSPs struggle with pricing , caught between trying to maintain profitability and keeping prices low enough to dissuade customers from jumping ship . But the cold hard truth is most MSPs aren ’ t charging enough . “ That ’ s why 50 % of MSPs are at — or below — breakeven after a true owner salary ,” says Gary Pica , founder of TruMethods , an MSP coaching and peer group business , now part of Kaseya . “ And they do not make as much money [ as they should ] for the risk and the effort that they put in . Their customers might like them , but they don ’ t value them .”
And there ’ s the rub .
“ Their prices are too low , but really , that ’ s a result ,” says Pica . “ Their value is too low . The way that they package and present their offering [ doesn ’ t have enough value ].”
Here are some tips on how to package and price a value-based offering that will drive profits for your
MSP and deliver desired business outcomes for your clients .
Why Pricing Is A Struggle
One reason many MSPs have a hard time getting their pricing right is because they don ’ t fully understand their cost drivers , Pica explains . “ They have so many tasks that they do — support desk , vCIO work , tool costs , proactive work , projects — even in a small MSP , and all of these things are done differently . Turning that into a unit of measure where they know their costs [ is difficult ].”
Determining the true cost of service delivery is challenging , agrees Erick Simpson , an MSP business and channel growth expert , and CEO and chief strategist of Channel Mastered . “ I think what throws MSPs off is that they ’ re using the same resources to do lots of different things ,” Simpson says . “ You might have a technician that ’ s working tickets on the service desk , prepping for a project , and going on-site . How do you measure everything ?”