Pricing and Packaging - How to build your stackFeb 09, 2022
If there's one thing that every MSP gets stuck into at some point, it's pricing and packaging. Whether you've started looking at this early on, or later in your journey upon realising your pricing and packaging is too complicated, today, I want to help you to get it right.
If you don't already know who I am, I'm Pete, the former owner of an MSP that I grew to £1.2 million and sold in 2020. Now I make videos through my YouTube Channel and blog posts here, to help other MSP's by sharing my own experiences. If you want to join my YouTube channel to see my current series of videos, subscribe now.
I'm going to try to help you plan a pricing and packaging strategy using various levels, so, let's get started.
LEVEL 1 MSP OR IT BUSINESS
You should always include a basic package. Some sort of entry-level plan that gives your customer the basic stuff that they must have.
This should include:
- Desktop Anti-Virus
- Email Protection
- Web Protection
- Cyber Security Awareness Training
- Backup for 365 or Gmail
- 24x7 Monitoring and Alerting
You can price this anywhere from £10 to £20 per month with margins being around 50%-100% giving you the flexibility to swap out products and services if better options come up. You must remember though, that this isn't a cash cow. This is by no means a way to make you money. This option is to ensure your client gets the basic protection they need.
This option also gives you stability with your clients because they are all covered with the same protection, the same services - which makes them a lot easier to service. Once you have people signed up for this service, you can then give a few options for support.
PAY AS YOU GO
Very simple, people call you and you fix things. With the monitoring service already included in the basic plan, notify your customer if you pick anything up and get their approval before carrying out any work.
For this option, customers would pay you in advance for a block amount of time, for example, 10 or 20 hours. Any work you do for them gets taken from that block of hours until the time runs out. When it does, you quote them for more hours.
GOLD, SILVER, PLATINUM
Next, you have tiered options. Each option includes more additions to what your customer gets as they move up the pricing band. This could look like longer opening hours, maybe different SLA’s discounted hourly support rates, discounted out-of-hours support charges, dedicated primary and secondary engineers, dedicated phone numbers, and priority support - there are a lot of ways to differentiate those tiers.
LEVEL 2 - GOLD, SILVER, OR PLATINUM PACKAGE
With this option, you start to drop some of the offerings in Level 1 ensuring that each offering still comes with that basic protection. With this option, you are really narrowing down your offering, and simplifying everything - for your staff, for your customers and it helps all around.
With Level 2, you would not include Pay as You Go or Block Time as they are reactive support options. That's not to say you can't still quote for extras that are payable by the hour, you just wouldn't offer a ‘you call us and pay us by the hour to fix it’ type of service.
LEVEL 3 - ONE SINGLE SERVICE
This was always my personal goal when running my MSP, to get customers to sign up to just one plan, either Gold or Platinum package.
The benefit here is that when your company sells one main service, everything else becomes clear.
There are no awkward telephone calls from clients where your engineers don’t really know what service they’re on.
Are they gold, silver? Are they pay and go? Do they get charged for on-site visits? What about out of hours?
So having a single, primary offering, is a huge benefit to you as an MSP.As with the other levels, that does not mean to say you can't offer additional options, you can. As an MSP, you might also be doing Telecoms, Online Backup, cabling, or all these other services that are associated with IT Support. Those can still be bolted on and sold. But the fundamental, underlying support that you offer - can fit into these levels.
The one thing I would warn you about upfront is that if you choose to go with one primary offer from the start, your growth may well be slower. It's much harder to sell a premium service as a one or two-man band. Yes, your clients will receive a better quality of service, but you may find yourself stuck in the one or two-man band stage for a longer period of time, compared to opting for Level 1 or 2 Pricing and packaging instead.
A more affordable or entry-level ‘foot in the door’ price that gets clients in, who over time can then see value in the service you provide, gives you the opportunity to build up a history with your clients, allowing you to open up discussions with them about considerations for moving up to various packages.
If that’s been useful then check out more in the link down below, where I have spent the last year putting together all of the things I learned whilst running my own MSP, as well as all the resources that you need, support agreement, terms and conditions, employment contracts and all sorts of templates and resources.
Sign up for my Course: https://www.notabusinesscoach.com/nab...
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