Connectwise MSP pricing
So back in 2018 Joe Panettieri wrote an article about then ConnectWise CEO Arnie Bellini and his efforts to simplify services and pricing models for managed service providers.
You can find that article here: https://www.channele2e.com/channel-partners/msps/cybersecurity-pricing-models
Essentially, it struck a chord with me because I am always thinking about how services can be priced in a way to both make them easy to sell and easy to understand, especially for the managed service provider msp community.
Easy to Sell Services
IT Services are not easy to price out. You will always have questions about what can be delivered internal, outsourcing considerations, etc. One of the biggest things to consider is how you sell your services.
- If your sales team cannot understand the value of remote monitoring and management services and how that aligns with their customers desired outcomes it will be difficult.
- If your sales team can’t explain the value of expertise in infrastructure management services to your small and medium sized businesses, it will be difficult.
However, if you can focus on how you communicate the value of your managed services from both an information technology, business, and security standpoint, you will stand out from the other managed service providers.
Easy to Understand Services
Managed IT Services could include a lot of technology and cybersecurity services options when it comes down to it. Joe even put together a nice graphic as an example:
So, as you can see, there is a wide range of services from both a business standpoint and a technical support standpoint.
Either way, there should be some thought put into how many tiers you offer, and what is included in each. You don’t want to reinvent the wheel every time you are scoping out a deal for clients.
Start your pricing exercise by determining which services you are going to offer. For example:
- Web content filtering
- Log Collection (SIEM)
- Network Management
Then, determine the costs associated with delivering each of these services. More than likely, there will be both software/hardware costs as well as labor costs. Write that number down.
Bellini outlined about two dozen technology services and organized them into three tiers – priced at the following example levels:
Then, work backward, and determine what an appropriate rate for these services would be. For example, in the article referenced, you can see a potential charge of $200/month per user. Now that’s just an example, but you get the point.
Today’s best MSPs are charging around $125 to $150 per user per month, ChannelE2E estimates. Certain vertical market customers that deeply value compliance, data protection and data security may be willing to pay a market premium for additional, more advanced cybersecurity services.
Dennis Manfra and I talk more about this in-depth in episode 6 of the In Scope podcast (scopestack.io/podcast). Dennis gives some very practical examples of what to think about when pricing services.
Managed service provider, MSPs, have a lot to consider when going to market. There are considerations both technical and business-oriented, skillset evaluations, pricing considerations, etc.
The most important thing is that you put some thoughts into it in advance. Don’t make it up as you go. As far as cybersecurity goes, it should be embedded into each and every one of the solutions you offer. As Joe stated in the original article:
The big question — can MSPs really charge $250 per user per month for a complete suite of technology services and advanced cybersecurity services?
Thats a great question. I’m curious to poll our MSP clients to see where they stand. This was written back in 2018, and quite a few macro events have happened since then.