My general rule is whenever one MSP tells me something, I take it as innovation or experimentation. Whenever multiple MSPs tell me something, it's a trend. There are many MSPs currently reviewing their existing pricing models, looking to adopt more current models. I believe this is a real trend, which all MSPs should consider.
Our profession has, for too long, been rooted in outdated pricing models, largely inherited from the days of Value Added Resellers. VARs built their pricing models (similar to their business models) off of the products they represented. Pricing strategies, therefore, were largely influenced from the vendors they worked with and the products they were selling. MSPs do not operate in such a fashion and should not rely on those old fashioned pricing models any longer.
Per user and per device models were easy, primarily for the sales staff, who wanted a widget or a SKU product. This is very similar to how they sold hardware and software, and that is how many MSP sales people wanted to sell managed services. This could be why MSP owners and managers have had so much trouble in developing effective sales techniques for their services.
Furthermore, I've had a lot of conversations with MSPs who expressed concern over competitive "MSPs" price cutting on managed services just to win deals or steal customers. This type of behavior will always exist as long as MSPs continue to use per device or per user pricing schemes. This may be hard to take for some, but there it is. MSPs who want to remain competitive in the future, need to develop a new pricing model. But, what are the options?
Risk Based Pricing
I'm generally not a believer in the "one ring to rule them all" theory, but for managed services pricing, I actually think there is such a model. Risk based (some call it SLA) pricing models are flexible enough to be utilized by many types of MSPs, even those delivering cloud based solutions. As such, it is a pricing model that can be used for virtually every type of MSP, regardless of their geography, service or market vertical.
If you are interested in learning more about risk based pricing models, as well as innovative and effective lead generation practices, you should highly consider attending this upcoming webcast called "The Best Way to Price, Market, and Sell your Managed Services Offerings" I will be speaking with a panel of experts on the three distinct topics involving pricing, marketing or lead generation, and sales techniques often ignored by the majority of MSPs. If your company has concerns about any of these topics, attending this webcast will give you some new ways to approach and resolve these operational challenges within your own organization.
