As you might imagine, I speak to a lot of MSPs over the course of any given day. Probably the most common question I get is “how do I price by offering?” One of the benefits of speaking to so many MSPs is that I have had a wide range of experience in discussing pricing structures. Managed service providers are all over the map when it comes to pricing. But, as I have spoken with them over the years, I’ve had an opportunity to begin to see some trends.
There are four general groupings of pricing that IT service providers tend to follow. And while there are no hard and fast rules, if you stick within one of these four groupings, then you’ll find it a lot easier to pick a price that’s suitable to the service that you’re delivering.
Each grouping has several pros and cons and it is difficult to switch from one to the other, though, not impossible. So it is best to pick the right pricing structure from the beginning if you have that option. But don’t worry if you’re already started, this article will give you an opportunity to get a birds eye view of what other managed services providers are doing. Maybe it’ll give you the motivation that you need in order to take that leap of faith and switch your business around to a model that makes more sense for you.
Network Depot, the MSP that Virtual Administrator is associated with, began with one of these pricing structures and eventually switched completely to another one. But that story is for another article :-).
So without further adieu, let’s dive in and take a look at these four pricing structures.
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