Managed service providers (MSPs) are always struggling to try and keep up with their competition. The market is challenging to say the very least. It is important to be able to provide things to clients that are different than what other MSPs offer. The market for an MSP business is one that is ever expanding, creating new opportunities to serve clients and new avenues to grow the business. Even though the market is competitive, you do not want to react only by dropping prices. There are other things that you should be doing, rather than immediately slashing your service fees.
According to a study that was done by Kaseya in 2017, MSPs that were able to grow their revenue did so by increasing prices. Needless to say, it is not all about slashing prices. The inverse move can work in your favor at times where you increase prices, and you make your services seem that much more valuable.
Price Based on the Value Provided
You want to price what you are offering to your clients based on the value that you are providing. This is known as the value-based pricing model and is used by many MSP business owners all over the world.
The idea behind the value-based pricing model is that you are assessing what you are providing to clients as a product or a service— in this regard, the services you are bringing them as their MSP— and tying a price tag to that.
Customers genuinely do care about the services that you provide to them, the technological advances that you are going to be able to bring to them. When you can offer them the latest and greatest regarding creative solutions, the price tag is going to be more than justified due to the value that you are getting out of it.
The Value of Work with Your Company
There is a lot of value that comes with working for you as an MSP, and it is important to realize that. You want to get out there and talk to as many clients as you possibly can. Speak to them about the services that you offer and about the experiences that you have had with customers in the past. The more you can get out there and discuss what your company can bring to the table, the more you can sell it.
As an MSP, you can do things that are unique. The qualities that you have regarding your industry, your expertise and reliability, and how efficiently you can come up with solutions for business— all of these provide a lot of value.
When the time comes to try and grow your MSP business, you do not want to do so simply by cutting your prices. This may provide a short-term gain of a few more clients, but it is going to significantly devalue the services that you can provide. Sell your business and push things regarding what you can bring to the table. Increase prices, sell your value, and show that you are an MSP with premier solutions for clients. It is then that you will be able to grow your business.