“ Make sure you are profitable . Never discount . And know your worth .”
With the hyperinflation we are in , you must raise prices . On May 11 , 2022 , the U . S . Labor Department published the annual inflation rate for the United States . For the previous 12 months , ending April 2022 , the annual rate is 8.3 %. ( Between 2012 and 2020 it never rose above 2.3 %.)
Even if you are only looking to break even , you ’ ll need to raise your prices by around 8 %. But even that might not be enough . Not only is the cost of goods rising , but we are receiving reports from MSPs across the country about premiums on labor between 18 % and 20 %. MSPs are losing top staff to companies offering to double their employees ' salaries . In speaking with service leadership groups with best-inclass MSPs , we discovered that across the board , every MSP had raised prices by 20 % in the last eight months .
To help you feel confident in raising your prices too , we spoke with three MSPs to find out how they charge premium prices for their MSP services .
Michael Glasser , Founder of Glasser Tech , started his business out of his house in 2008 and has charged premium prices from day one . He also doesn ’ t use contracts . His billable rate is $ 195 to $ 225 per hour . With profit margins , nearly four times that of the average MSP , Michael ’ s business was acquired by Frontline Managed Services in 2021 .
Will Nobles , Founder of Vector Choice Technology Solutions , used to believe his market wouldn ’ t tolerate premium prices . But when he raised his prices in 2018 , his company took off and has grown at a blinding pace , increasing a million dollars year over year . He charges between $ 100 per computer / per month and $ 250 per computer / per month , plus projects .
Mike Bazar , Founder of Bazar Solutions , Inc ., has been growing at a rapid pace , even through this economic downturn . While he charges 47 % more than the competitors in his market , he says there is room to charge more . “ We have solid pricing , but we are not charging an astronomically high rate ,” he says .
Here are seven things these MSPs recommend you do to charge premium prices :
1 . Don ’ t undervalue your services .
Make sure you are profitable . Never discount . And know your worth . Even if you are only getting started , serving a certain market segment , or don ’ t have all the resources in-house , it doesn ’ t mean you can ’ t charge premium prices . “ You don ’ t need to have a cybersecurity person on staff to charge premium prices ,” Nobles said . “ You can partner with a company that has that expertise to build out your package .”
Glasser does not use an “ all-youcan-eat model ” where everything is included . Instead , he offers an entrylevel managed services plan with two requirements : advanced endpoint protection and system recovery backup system . Everything else is a billable event . “ Robin Robins told me , ‘ You can charge anything you like , as long as you ’ re backing it up with the service ,’” Glasser said . “ The value you provide , if you ’ re giving excellent service , you can certainly charge for it as long as you back it up with what you promise .”
MSPSUCCESS . COM | 15