If there’s one topic that still plagues many managed services providers it’s the issue of pricing. What makes this issue so difficult for some MSPs is the thought that they’re trying to convince a company that formerly paid for IT services only when something broke to pay every month — even when everything seems to be running smoothly.
Rob Merklinger, VP of sales at Intronis, addressed this topic recently in his article, Pricing MSP Services for Maximum Business Value. The article is full of useful tips and good advice, but it was this point in particular that caught my attention:
Don’t allow customers to nickel and dime services by offering a single-service menu to choose from. The most successful MSPs bundle their solutions and support into a managed service offering that commands a higher perceived value and leads to greater profitability.
The key phrase in that quote is “perceived value.” This is so important — especially in when it comes to selling managed services, which includes intangibles such as “better IT uptime,” “peace of mind,” and “trusted business advisor.” These are especially hard to grasp when you’re talking to a brand new prospect that hasn’t had the opportunity yet to experience the services you’re proposing.
It’s tempting to try to overcome objections by offering a discount or throwing in one or two “freebies,” but don’t do it, advises Merklinger. The key is for the MSP to firmly grasp the business value it has to offer, whether it’s reduced downtime, a projected savings, or an improvement in productivity. Then — and here’s the clincher — those tangible benefits need to be articulated to the prospect and presented as a baseline bundle that cannot be pulled apart. There’s no question that it requires more planning and sales training to do this correctly, but the payoff potential is too great to ignore this best practice.