MSP Pricing Survey – 10 Tips for Higher Growth

The fourth annual Kaseya MSP pricing survey attracted almost 700 responses from MSPs around the world. The 2014 survey included questions on a broad set of topics including demographics, growth rates, services offered, pricing strategies, the prices charged for a variety of services, and price revision plans for 2015. We’ve described many of the findings in our series of MSP Pricing Survey blog posts over the past several weeks.

Based on the survey results, other market research, and conversations with leading MSP luminaries and advisors, here is a list of 10 tips for MSPs who would like to grow faster:

  1. Position a small number of service bundles/tiers with increasing levels of capability. SMB customers want more comprehensive services and see strong value in attractively priced bundled managed services.

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  3. Differentiate with advanced and specialized services that include system availability guarantees. MSP customers are interested in getting more from their managed service providers than just a promise to respond rapidly to problems. If they are going to outsource portions of their IT management they want their providers to have “skin in the game” and to take on some of the responsibility for IT service delivery by providing service availability and/or performance guarantees.

  4. Determine how to best assist customers with cloud migration, operations and management. Cloud services will not replace managed services. On the contrary they increase the need for services which support cloud migration and cloud service management.

  5. Establish clear business value for each offering. SMBs buy on value to their business; price is important but not paramount. Know your prospect’s/customer’s business and how you can add value. Price based on the specific value you can deliver to each customer.

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  7. Target a smaller number of larger customers rather than a larger number of smaller customers for greater efficiency and profitability. Knowing where you can sell successfully and focusing on that segment will help make your sales and marketing more efficient and more effective.

  8. Adopt a proactive approach to IT security. It will save you money and improve your engineering/technical staff productivity significantly. Security issues create tremendous disruption – like any other systemic infrastructure issue. Take steps to minimize the disruption before it occurs by setting up regular scans, ensuring the right is running through policy-based automation, and manage access with password management, multi-factor authentication and single sign-on processes.

  9. Don’t underprice. Use the pricing report to show you are in the right range. Be competitive but compete on the outcomes and value you can deliver not on the cost of providing each service component.

  10. Develop strong managed services sales and marketing capabilities. Selling and marketing managed services is very different from selling hardware and software. Having the right skills in this area will pay tremendous dividends in terms of deals won and in the profitability of those deals.

  11. Participate in vendor communities, meetings and events to learn more and keep up-to-date. Managed services is a fast moving market with new players and new approaches entering all the time. Even if you operate in a small geo market with limited competition, your customers are still informed about the wider possibilities and opportunities. Keep up to date so you can continue selling and delivering value.

  12. Invest in great tools – leverage all the capabilities you can. Efficiency translates into both profitability and competitiveness. The more efficient your MSP operation the faster you can grow and the lower the business risks. Invest in integrated and professional tools that reduce variability, automate routine tasks, speed problem resolution and support your expanding managed service portfolio without needing to be replaced.

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Pricing MSP services for growth and profitability

These topics are discussed in more detail in our webinar Pricing MSP Services for Growth and Profitability. The webinar highlights the results of the Kaseya 2014 MSP Pricing Survey which was completed in September 2014.

Author: Ray Wright

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