Managed Lite or Silver Package?

Do any of you offer scaled-down managed services? I proposed a full management package to a client that currently uses a competitor on a T&M arrangement. They want to go with me, but my annual cost is more than double what they have been spending based on my full coverage pricing. They know about the intangible benefits, down-time, staff efficiency, etc. (and I package in some extra services), but they can’t justify the cost difference.
They asked about if I could do full MSP services on the servers and network, and to T&M or something for desktop. I’m a little hesitant, but I have thought of offering an alternative package for price sensitive clients. I have some small clients that have stable networks that may only spend $1-2k/year with me, but with my Managed Service package would spend 3 to 5 times that.
Do any of you have any advice on offering an alternative package, or a hybrid MS/T&M package? I’m also thinking maybe it is better to have them full coverage at a discount, as long as I’m still making money. I’m trying to get away from having each client have their own customized package.
Thanks in advance,
-d

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