FAQ: Managed Services Pricing Tips, Asked Another Way
Each week, readers submit questions to MSPmentor’s Ask a Mentor form. And each week, we take our best shot answering a specific reader question — while updating our Managed Services FAQ section along the way. Here’s the latest submission, from yet another reader who wants thoughts on pricing. Got advice? Weigh in.
We are an IT Service Provider, offering support from the desktop to the complete infrastructure. We are looking to modify our, pricing model from an hourly price point (we have a spreadsheet that calculates, based on the number of devices, how many est. hours of support would be required per month. Clients prepay the number of hours at a discounted rate–the more prepaid hours, the better discount)to a per-device model.
I then came across an MSPmentor article that makes me question that and that maybe we should look at the one line item – valued services approach. I am looking for advice from others in this market as to how they do it, also, how they deal with modifications (new devices/users, etc), how after hours / extended hours are figured in to the equation, and a variety of other questions related to the pricing model.
Is there a forum, newsgroup, etc., where these types of topics are or can be discussed?
We have been in business for approximately 7 years now and I just feel we are giving away too much of our services for free based on the way we currently run it…it is time for a change. Thanks for any information you can provide!
MSPmentor’s initial reply…
Let’s start with the easy stuff. Yes, there are forums and groups where pricing and business models are discussed. Two groups worth noting on LinkedIn include the Managed Services Provider Network and our own MSPmentor group, among others.
In terms of “shifting” your pricing model, MSPmentor does believe that per-user and per-office pricing is gradually replacing per-device pricing in many scenarios. But perhaps our article, mentioned above, understated the ongoing use of per-device pricing in many scenarios — especially when it comes to data center devices and infrastructure rather than personal IT systems like PCs, tablets and smartphones.
That said, we’ll turn your question over to our readership for their thoughts. Readers, any advice?