Are You Protecting Your Managed Services Value?
People will wait for, value, pay for, and appreciate quality.
MSPs have a difficult time deciding what their value is. In my discussions with MSP owners and operators, pricing is one of those frequently occurring topics that never seems to resolve itself.
I can appreciate how difficult it is to value something you’ve built. We are often the least objective people when it comes to determining self-worth. As an MSP owner (or individual responsible for setting managed services pricing), you must set your prices at a sustainable level. Here are a few tips to help you accomplish this.
What Is Your Value?
You need to articulate what your value is as a MSP to be successful in determining a fair and accurate market price for your services. There are very few brands that can command a high price without a significant marketing push. Hermes, with its Birkin handbags, would be an excellent example of such a brand. The Birkin handbags are so well known and respected that they have a vibrant secondary market.
You must articulate what your managed services value is. If you cannot, you will be hard pressed to set an accurate price the market will accept.
Protect Your Price
Protecting your price is as much a sales training issue as it is an executive one. Your sales team members need to safeguard your company’s value vigorously. Are sales teams already do this, you may be saying. Maybe.
But, protecting your MSP’s value is as much about protecting pricing as anything else. It is common knowledge that salespeople will negotiate on price to close a sale. I am not suggesting that this practice should stop, or that it can stop, even if you wanted it.
What I am saying is there is a time and place for everything, including discussions around price. There is a considerable difference between bending your pricing model and breaking it. When you break your pricing model, you are throwing away your value. Most importantly, is that when you break your pricing for your managed services offering, it is difficult to regain your value in the eyes of that customer. Customers always remember MSP salespeople who are willing to break pricing models.
Understanding Your Value
I believe a lot of MSPs do not understand what their value is. Understanding your value as an MSP is crucial to being able to articulate it, and convince others of it.
Value is a mindset. Your MSP practice should ooze value with everything you do. Confidence is undoubtedly an essential ingredient of value; or at least a by-product of it. Knowing why your MSP practice has value gets to a deep understanding of how you deliver your services and how customers consume them.
Most customers (most people, for that matter) appreciate value. If your MSP practice effectively understands, protects, and communicates its value, you will never need to engage in price dropping sales tactics to close business. Customers will seek you out because that’s what people do when they find value.