The pricing of a backup and disaster recovery (BDR) offering can make or break the solution's profitability for managed services providers (MSP). To avoid beginner mistakes with BDR pricing, we did a little research and discovered five pricing tips that can help MSPs keep their head above water. Take a look at what we uncovered in this MSPmentor exclusive.
BlackPoint IT Services Managed Services Vice President Chris Butler told MSPmentor that his pricing practices have worked well for his company. His pricing strategy has been "developed over the past three years by listening to client feedback and what would be their ideal backup as a service solution."
If you're not sure where to start with your BDR pricing, take the following five pricing tips into consideration:
- Eliminate setup fees -- This removes any initial barriers or sales objections. You don't want potential customers dropping out before negotiations, do you?;
- No appliance fees -- As an MSP, you're maintaining the hardware, so why charge an appliance fee? Butler said that your backup solution is a complete hardware/software backup replacement;
- No cancellation fees -- Don't charge your customers a cancellation fee for your service. "No one likes the cell phone model," he said. If your customers don't like your service, allow them you can cancel at any time. Don't hit them up with additional costs;
- No upgrade/downgrade cost -- Allow businesses to grow without charging additional fees. Charge your customers for what they use and move them into the right size appliance as their business changes; and
- All services included -- Make sure that you included all of your services into your offering. Butler said that "file restores all the way down to disaster recovery (DR) planning and testing" should be included. Don't make it more difficult on your customer.
Setting the right BDR pricing can be challenging, but doing it right is worth the effort. Make sure to listen to the needs of your customers, and you'll be converting new BDR customers in no time.