5 HUGE Pricing Mistakes Most MSPs Are Making – Are You Guilty?

Robin Robins IT Sales, Managed Services

1. Pricing your services in the same manner as everyone else. When most MSPs go into business, they look around and talk to all the other MSPs in the business, their contracts and what they are delivering and then model THEIR services after what they see. What they don’t realize is that what they’re doing is building a commodity—a service that looks, sounds, acts and is priced like everyone else’s. Then they wonder why they get shopped on price. Dumb.

2. Marketing to prospects who truly cannot afford your services. There are some people who simply cannot afford to buy what you’re selling, so STOP marketing to them OR figure out a business model and service where you can still profit from what they CAN afford (Wal-Mart). For example, there are certain groups in the IT industry that I’ve spoken in front of where the people are clearly small, struggling IT firms who, even when I get `em, end up in collections, have a high refund rate or simply don’t buy because they quite honestly can’t swing a $500 charge on their credit card. When invited to speak at these events, I decline. You can’t fish in a murky swamp and hope to come up with a prized tuna.

3. Not being able to give prospects logical and sufficient reasons why your services are worth more. Let’s take my services for example. If you choose to go with a cheaper competitor, you’re going to waste a lot of precious time and money implementing the WRONG strategies, and nothing is more expensive than bad advice. Bottom line, you HAVE to learn how to make a solid argument to a prospect as to why they need to hire YOU, and help your prospect see the hidden costs of “free” or “cheap” services.

4. Not having a PREMIUM-priced version of what you sell.
I have this argument with people all the time about varying levels of managed services offerings. Many boast that they only have one price for one service plan that they sell. Stupid. I firmly believe having at least two options is SMART, provided one is a premium version. Even Southwest Airlines offers a “premium” option of business class that guarantees you’ll be one of the first 15 to board the plane. If nothing else, the premium version acts as a contrast to the “coach” services you provide, making them seem like a better bargain.

5. Negative, emotional beliefs about asking people for money.
Most of the “price” issues I see in business primarily stem from the owner/salesperson having low self-esteem or low confidence in themselves and what they deliver. They never ARTICULATE it that way, but with a little digging, they’ll admit they pull their punches and hold back from confidently advising the client that they should buy from them.