Finding the right price for managed services offerings has always been a battle for MSPs – a balancing act influenced by geography, the ability to articulate value propositions to customers and the competitive landscape. While savvy solutions providers have learned to quantify their vertical focus, engineering expertise, and say “no” to potential customers unwilling to pay for IT expertise, many MSPs continue to struggle with pricing and short change themselves as a result.
As more new MSPs adopt the business model, the question has become: Are MSPs willing to sacrifice profitability by reducing fees just to win business? And what impact will that have on the channel? Many argue that as managed services grow with SMB customers, so does the commoditization of the market. On the flip side, research from CompTIA shows that managed services customers are enjoying IT cost reductions ranging from 25 to 50% and report nearly a 90% satisfaction rating. If the benefits to the end user are so clear and being realized, why are so many cutting pricing to win the business?
That’s the big question and the debate that’s brewing in our industry.
At NetEnrich, we don’t believe managed services are even close to being commoditized, but recognize the dangers of this downward price trend. That’s why in Q4, we’ve launched our BIZ DEV webinar series, which includes a webinar dedicated to MSP pricing.
Taking place Nov. 15 @ 9 am PT, Noon ET, this webinar covers all the bases and features special guest and industry pundit, Larry Walsh, CEO of the 2112 Group, in addition to field sales experts from NetEnrich and N-able.
During the webinar, Larry will discuss recent research and analysis from CompTIA and the 2112 Group that shows how and why MSPs are underpricing their services, what impact that’s having on the channel, and what MSPs can do to address this head-on in order to ensure higher margins and enjoy profitable pricing.
If you missed Walsh’s recent blog on this topic – check it out. The takeaway: Many MSPs charge for services based on an isolated perspective, which may be profitable to them, but not necessarily in line with the industry. “Low-balling prices will provide MSPs a competitive edge against peers in their patch, but that advantage is only short-lived as the cost of doing business increases with the increase in customers and service capacity,” writes Walsh. “All of this leads to an unnatural commoditization of managed services.”
Don’t let other MSPs drag your business down. Join us on Nov. 15 to learn how you can avoid commoditizing your services and how to set pricing that makes you money and keeps customers coming back.
BIZ DEV – Part 2: Value-Based Pricing
Tuesday, November 15, 2011 – 9:00 AM (Pacific) / 12:00 Noon (Eastern)