If you’re in an active Toolkit membership or up, you MUST SEE the session we did on how to raise your prices now. It’s CRITICAL to get this done now and not wait until a recession takes hold and the economy softens to the point where no one will tolerate a price increase. Don’t say you weren’t warned!
Here are five ways to raise your rates in your MSP business, that you can do RIGHT NOW.
1. Sell an UPGRADE.
Create a “new and improved” 2022 managed services package that has upgraded support, security tools and benefits. Go to all clients and insist (or strongly recommend) they upgrade to this for their protection. People LIKE “new.” In all likelihood, your service offering NEEDS a facelift right now anyway.
2. Meet with your clients’ insurance agents.
Review their policies that specifically cover cyber liability and crime. I’ll bet you a dollar to a donut there are things your client has agreed to contractually to do to protect their data and network from a cyber-attack that YOU’RE NOT DOING. This is all a value add for your client who hasn’t realized this little tidbit and/or hasn’t thought to have you review their declarations to ensure you actually have implemented these protocols.
3. Offer a “first-class” option.
This is a strategy I’ve taught for YEARS but have hardly any clients actually doing it. Sell a first-class, higher-level option of whatever it is you sell. To be clear, you should NEVER sell a client less than they need. But you should also offer a “luxury” or higher-level service offering than your standard one that is 30% to 50% higher in price. Include things like faster response times, after-hours support, advanced cyberprotections, etc. The company that services our heating and cooling offers a “comfort club” where I can pay $350 and get discounts on services, twice-a-year maintenance visits included and “first in line” response. Airlines sell first-class and it’s nearly always sold out. Hotels sell suites and room upgrades along with a concierge level. All cars offer upgrades, warranties and after-market modifications. These are all ways to increase your prices without increasing your prices.
4. Raise your prices on all NEW clients.
They don’t know your “old” pricing models and can be sold on a more profitable basis.
5. Sell additional services.
Phone systems, security cameras, employee training, advanced cyber security solutions, compliance-as-a-service, application development, ISP services, etc., etc. If the add-ons are priced a bit higher, you can make up the margin by selling these higher-ticket, higher-margin services.
Of course, most stay stuck in an unprofitable model because of fear, guilt over raising prices or a lack of confidence in themselves (thinking they’re not “worth” higher fees).
This is all emotional baggage and most MPSs never test price elasticity to see how far they can go with pricing before it “breaks” and they are unable to close any deals. Eighty-three percent of MSPs are underpaying themselves and are NOT profitable, defined by not paying themselves a fair market wage as the owner AND not generating 10%+ EBITDA. If you’re in that crowd, you should be very, very concerned and take action immediately to correct your fast-approaching demise.
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