Right now there are two competing concepts for pricing managed services. Value based pricing and commodity based pricing. Both can be good models, depending on what you’re trying to accomplish and what types of resources are available to your technology firm.
The main question we are going to ask is: How does IT lead generation factor into your decision of which pricing model you want to use for your computer consultants marketing?
The goal of value based pricing is to try to get the most money for your services and not leave any money ‘on the table’. Also, this pricing model tries to make your marketing proposal a little bit harder to price compare with the competition. This is because you don’t price each server you offer or break up you price into any groupings. You attempt to find out what the customer needs and give them a bid on only that. Any other services your offering are ‘Thrown in” without any additional price increases.
Of course commodity based pricing is the exact opposite, in that you set a price for each component of your offering. For example, you set a price of $250.00 per server to offer server management. Granted this model is much easier to price compare and you do stand the chance of leaving money on the table, if the customer saw more ‘value’ in the services your offering.
Now what does IT Telemarketing have to do with your pricing model? The answers is that you must consider the cost of lead generation when setting your pricing model. Because the market is so competitive you must consider what your competition might me doing. If you have paid money to get into an opportunity, to pitch your technology offering; then you might ‘need’ to make sure you get a decent return on your investment.
Value based pricing usually will be a tougher sell, if other companies have laid out on the table what they charging for each item. If you have gotten this lead by referral or some other FREE method then you might not be concerned with your closing ratio and insist on going with a value based pricing model to insure that you don’t leave money on the table and that you can not be shopped against.
However, if you have marketing cost from your telemarketing campaign that you need to ‘pay back’, then you might want to be as competitive as possible. This way you can land as many new account as possible. If you were hyper concerned with how much money you were getting on each client [value based pricing] then you might end up with no clients and still have to pay back you marketing cost.
MSP Telemarketing is agnostic as to which pricing model you choose but if your budgets are tight and you must earn back your marketing cost, then you might consider commodity based pricing.
John Black is the Marketing Director at MSP Telemarketing and has over 10 years experience marketing for IT providers and VARs to help them get more IT leads that turn into IT sales!