There’s no shortage of advice in the channel telling you what you must do to be more successful. A lot of that advice points to selling managed services and building recurring revenue streams. What’s not so prevalent, however, is specific step-by-step details about how to price your managed services.
I was pleasantly surprised recently to come across an article written by an IT consultant and managed services provider that includes this valuable information. Here’s a highlight of the insights shared by author David Streit, principal at Stephill Associates:
As a solo practitioner, I offer two MSP plans, Remote Care and Remote Care Plus. Remote Care includes monitoring of PCs, laptops, and servers, with included anti-virus/anti-malware protection, scheduled scans and real-time protection, automated tasks (mostly defrags and temp file deletion), and a discounted hourly labor rate. I use per device pricing because my RMM platform also uses per device pricing. I can easily match my pricing to my costs. I generally price no less than $15/PC and $100/server, but my target is $20/PC and $150/server. The discounted hourly labor pricing is an inducement to get prospects to sign up. I’ll discount my $125/hour rate to $115/hr. Remote Care excludes labor. ALL of my closed deals to date are Remote Care.
Many IT service providers are reluctant to share this information for fear of providing information that a competitor could use against them (e.g. $10/PC and $50/server). Kudos to Streit for sharing this valuable information — especially for solution providers looking to get started selling managed services.
He even goes a step further to contrast his business model with the AYCE (all you can eat) business model some MSPs offer and to share insights on what it takes to make this model work (e.g. factoring computer upgrades into the monthly cost of the service). Whether you’re new to managed services, or perhaps you’re already selling managed services and want to see where your plan lines up, be sure to check out Streit’s latest article: “How To Bundle And Price Managed Services.”