Avoiding Competitive Pricing Traps
The session opens with a critical warning against pricing based on competitor rates or aiming to be the cheapest option in the market. This approach has led to widespread pricing commoditization in the MSP industry, where providers have inadvertently trained business owners to focus solely on the final price rather than the value delivered. By specializing in security and developing security-centric programs, MSPs can differentiate themselves through the benefits and outcomes they provide rather than competing on price alone. The emphasis is on education and communication — helping prospects understand why your approach is different and why that difference justifies premium pricing.
Per-User Pricing and Labor Cost Realities
The presentation advocates strongly for per-user pricing rather than per-device pricing, positioning users as the most expensive asset of any organization and the primary cause of security breaches. This pricing model aligns with the goal of keeping users safe, protected, productive, and working. Understanding your fully burdened labor rate — which includes hourly wages, payroll taxes, benefits, training, and all employment-related expenses — is essential for accurate pricing. MSPs must be honest about the actual time required to deliver their programs, resisting the temptation to underestimate labor hours to meet preconceived customer budgets, as this only erodes profitability over time.
Implementing Regular Price Increases
A significant portion of the discussion addresses what may be the biggest pricing mistake: failing to implement regular price increases. Many MSPs still avoid annual increases or haven't resumed them post-COVID, which naturally erodes profitability as business costs and inflation rise each year. The session provides practical strategies for introducing increases, including addressing them at executive business review meetings or, more effectively, bundling them with enhanced value through redesigned security programs. One particularly innovative approach shared involves versioning security suites like cars (e.g., "2023 Security Suite"), which promotes product standardization, positions the MSP as the expert, and removes the need to seek customer permission for technology changes.
Building Customer Acceptance Through Education
The final segment emphasizes that customers are actually expecting price increases — they've experienced them from every other vendor and are waiting for their MSP to implement them as well. The key is proper implementation through education and communication. By setting clear expectations during the sales process and maintaining regular executive business reviews, MSPs can build acceptance for annual pricing adjustments. The session acknowledges that some customers may resist, but suggests that strategic churn can actually strengthen your book of business by retaining only those clients who value your security-focused approach and expertise.
