September 28, 2017
Sponsored by Datto
Pricing and packaging managed services is a well-known pain point for IT service providers. One approach MSPs take is to package their offerings into “bundles” as opposed to allowing customers to choose services à la carte. Some prefer this approach because it makes pricing services simple and straightforward. Others say that it helps them differentiate their business from the competition.
Bundling services gives MSPs an opportunity to demonstrate the value of their services in a straightforward way. An MSP might have tiers of services at different price points. Others might offer a single all inclusive bundle sold as “premium” service. However, some say an à la carte strategy is preferable, because it gives them more flexibility when serving customers. With à la carte pricing, customers frequently look for ways to cut costs by evaluating each service separately rather than looking at the big picture. Bundling services can help customers quickly understand how they’ll benefit from your service, without needing to evaluate each piece.
Think of it like a car wash. Let’s say a “Basic Wash” costs $5 and additional services are priced at $1.25 each (wax, wheels, rust inhibitor, polish, towel dry, etc.). The “Super Wash” bundle includes the Basic Wash, wheels and towel dry for $7. Finally, “The Works” includes the Basic Wash, wax, wheels, rust inhibitor, polish and towel dry for $10. Many customers will choose one of the bundled options because it represents a better value—even though a “Basic Wash” alone is less expensive.
Efficiency is another important benefit of bundling. Offering a distinct set of services allows you to streamline processes that apply to all customers. Standardizing on specific technologies as much as possible is another common practice among many MSPs. Standardization allows technicians to develop expertise and efficiency on a specific set of tools, reducing the amount of time they spend troubleshooting customer issues.
Successful MSPs agree that delivering exceptional customer service is essential to grow your managed services business. Happy customers become long-term customers that are likely to refer your services to their peers. The more you can streamline your service delivery, the better customer service you will deliver. Using reliable, complementary technologies to deliver bundled services can help accurately set and meet service level agreements (SLAs).
Bundling services can also improve customer retention. Obviously, smaller businesses have limited budgets. Cost is primary focus, and, as a result, they are more likely to investigate less expensive options—especially if they only rely on you for a single service. As such, bundled services can be “stickier” than single services. When delivering a set of services, you’ll have more frequent interaction with customers and build stronger business relationships.
To learn more about the benefits of bundled services, check out our eBook. In Bundled Services Made MSPeasy, we uncover the pricing and packaging strategies for industry-leading MSPs so you can make an informed decision based on your needs.
Eric Torres is Channel Development Manager, Datto Inc.
Guest blogs such as this one are published monthly and are part of MSPmentor’s annual platinum sponsorship.
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