MSPs Don’t Have a Sales Problem - They Have a Profitability Problem

Charles Weaver explains why many MSPs are not actually facing a sales problem, but a profitability problem. He breaks down how top-line growth can hide rising delivery costs, expanding client expectations, and underpriced responsibility. The episode focuses on how MSPs can reset pricing around risk, scope, and accountability instead of relying only on per-user or per-device pricing. 

Key points 

• In this episode, Charles argues that revenue growth can look healthy while margins quietly deteriorate. 
• He explains how MSPs often absorb more responsibility without consistently charging for the added labor, risk, and expertise. 
• He says client expectations have shifted dramatically in the last 5 to 10 years, especially around security, compliance, reporting, and strategic advice. 
• He highlights the “client expectation gap,” where customers want more service but often resist higher prices. 
• He stresses that security and compliance are not just tool licenses, but ongoing services involving configuration, monitoring, escalation, documentation, and accountability. 
• He notes that AI is creating a new wave of advisory demand, giving MSPs a chance to reset pricing and redefine the relationship. 
• He strongly recommends moving beyond per-seat or per-device pricing as the primary model, since it measures volume rather than responsibility. 
• He argues that pricing should reflect risk exposure, regulatory obligations, business complexity, and service intensity. 
• He advises MSPs to document service rejections, reassess risk regularly, and treat pricing as a living part of the customer relationship. 
• His core takeaway: profitable growth requires charging for the real scope of work, not just the number of users. 

Timestamps 

0:12 - The real problem: MSPs have a profitability issue, not a sales issue 
1:24 - Why top-line growth does not automatically improve margins 
3:06 - How MSPs take on more responsibility without charging for it 
4:42 - Why growth can hide margin pressure and inefficiency 
6:22 - Rising delivery cost and the danger of scaling inefficiently 
8:06 - The client expectation gap and why it hurts profitability 
10:18 - How managed services evolved into cyber risk governance and advisory 
11:37 - The slow creep of unpaid security and compliance work 
13:21 - Why price shocks happen when services were never separately charged 
15:34 - Turning changing expectations into updated service catalog offerings 
16:56 - Security and compliance are services, not just tools 
18:46 - Compliance work MSPs should be getting paid for 
20:30 - Why old service catalogs fail modern MSPs 
21:06 - How AI is adding new obligations and a pricing reset opportunity 
22:49 - Why customers expect AI to lower costs while MSPs absorb more work 
24:16 - MSPs now join board-level and C-suite conversations 
26:29 - Why risk-based pricing should replace seat-count dependence 
28:39 - Why per-user pricing captures volume, not responsibility 
30:25 - What to include after the baseline user and device calculation 
33:29 - Reassessing risk and documenting service rejections 
35:44 - Final takeaway: profitable growth comes from charging for accepted responsibility