What’s Old is New Again (or, How to Price Your MSP Offering)

There are a lot of theories on how best to structure pricing for an MSP company.  Mine stems from two realities:  pricing for MSP delivery has not yet solidified so existing companies are somewhere between price searching and price taking.  This is good, as it means there is a good amount of flexibility in which you can operate.  The second reality is that insurance companies are always right.  Or at least they always win.  Whatever – let’s borrow a play from their book: pricing based on risk.

If I’ve a few drunken driving arrests on my record with a handful of speeding tickets and a bunch of other various moving violations, can I still purchase automobile insurance?  Sure I can, but it’ll be mighty tough to find a provider and the cost of it will be astronomical.  Why then, are you providing ‘IT Insurance’ (which MSP delivery essentially is, more on this to come…) to companies with equivalent driving records at the same cost you deliver to ‘safe drivers’?

Reward the customers who follow your standards with lower pricing.  Bolt a policy requirement to your Gold Offering so that customers subscribing to that product receive your best efforts at a greatly lowered cost and make zero exceptions.  Create your Silver Offering so that it too delivers your best efforts but doesn’t include the policy requirement.  This will be your most expensive offering.  Now your pricing is based upon a tried and true model – the insurance companies’!

This is not something that can be done overnight – or even over a month – it will take time.  You should also be aware there is a great deal of responsibility that comes with the Gold Offering.  This is nothing like break-fix – you are completely taking ownership of their entire IT chain with this model.  That means you will need to have an application build process for each and every application your customer requires to operate and you’ll be maintaining that software for years to come.  This, in turn, requires you to become application packaging and deploying experts. (Much, much more on this later)  There are other responsibilities here too...

But if you want a scalable, worldwide business offering, this is a both an essential and huge step in that direction.

Technical Realization:  Build a desktop policy that works for you as well as for your customers.  Building this ‘child-safety-proof-cap’ for client workstations will not be easy and will require a lot of field testing for viability.  Have two test groups running when validating your policy collections: one that requires an above-average amount of flexibility within the OS and one of technically capable people who try to circumvent your policies.  This will ensure what you create is both viable and effective.  Once you have this policy collection, create a LabTech script for deployment and assign that script to run on your ‘Service Offerings.Gold’ group.

Business Alignment:  This is an essential part of offering a ‘boring workstation’.  If we cannot control what changes occur on a resource, it makes it much more difficult (if not impossible) to manage that resource.  The value proposition to your customer is threefold: productivity increase due to less downtime and no distractions from ‘other’ software on the company computer.  The third is, of course, considerably reduced monthly management costs.  Gold coverage is very cheap AND very good.