What factors go into determining your price when you put together an MSP marketing proposal? Most business owners use a combination of tactics to determine what rate they should offer. They’re usually based on how large their prospect’s budget is, the number of hours they’ll need to put into fulfilling the contract, and what they’ve determined their competition charges. However, many MSPs don’t take into consideration other factors that should go into their decision. This causes them to consistently price their services too low. Is it time for your MSP to raise prices on proposals? Here are three reasons why you should consider it:
You Can Negotiate Price
In MSP marketing, as in almost any other area of business, everything is negotiable. Whether you think this or not, your prospects probably have this idea. That means that when they see your proposal, they automatically think of a counter-offer. If you’ve already priced your services at the lowest rate you’re willing to offer, you have no room for negotiation.
If your prospect tries to make a counter-offer, you’ll have to say no instead of starting a conversation. Having a back and forth negotiation with a prospect should not be considered ‘haggling’ nor should it be seen as a diminishment of what you offer. Instead, it should be viewed as a mutually beneficial discussion. You can learn more about why the prospect is willing to pay the amount they’re offering and what other companies have offered to do for this same price. By viewing the negotiation as a learning process, you might find ways to improve your marketing model even as you are earning the prospect’s business.
You Can Offer Special Discounts
If your prices are always the same and you have no wiggle room, your prospects will figure this out and lose any sense of urgency when it comes to making a decision. Offering special discounts, one-time offers, or other ‘sales’ is a great way to get prospects off the fence and ready to take action.
Many MSPs are hesitant to offer discounts or specials because they can’t afford the hit to their bottom line. Raising your prices automatically removes this worry. When your rates are higher, you can offer specials and discounts that simply take your rate back down to where it was previously. You don’t lose any revenue and your new clients feel like they were able to take advantage of a deal.
You Increase Your Perceived Value
When you set your rates to be competitive and reasonable, you probably think you’ll be perceived as a value option. You want prospects to see that you’re willing to give them amazing services at a rate that won’t bust their budget. Unfortunately, many prospects won’t see it the same way.
When comparing rates on everything from MSP options to mattresses, consumers usually equate the lower priced options as cheap and of less value. While they don’t want to choose the highest price option every time, they certainly keep in mind the saying ‘you get what you pay for.’ If you want to be perceived as an expert in your field and elevate the perception of your value, you must raise your rates. Even though you aren’t changing anything about the actual services you provide, prospects will automatically put you on a higher playing field and be willing to pay more for what you do.
Don’t be afraid to raise your rates in your MSP marketing proposals! Instead of scaring prospects away or losing business, you’ll likely find that your close rate will increase. You’ll also be able to build in negotiation room and have a cushion for times when you want to offer special discounts or one-time deals. Remember, value and price are often the same in the eyes of your prospect.
About the Author
Nuresh Momin is the co-founder of HoustonTech, a company providing <a href=”http://houstontech.com/”>Managed IT Services in Houston</a>. They specialize in <a href=”http://houstontech.com/”>IT support for Houston</a> small and medium-sized businesses, and since 2009, they’ve been helping clients improve their businesses with quality solutions, such as IT consulting, backup and data recovery, cloud services, computer repair and <a href=”http://houstontech.com/”>IT services in the Houston area</a>. From a very young age, Nuresh liked to tinker with gadgets. He made his passion into career. He has more than 10 years of experience working in Information Technology. His role and expertise include, but not limited to, IT management, support and consulting. He works with clients ranging from CPAs and accountants, doctors, and real estate developers, to credit unions, oil and gas companies, manufacturing companies, insurance firms and nonprofit organizations.