How to Create a Pricing Strategy for Your As-A-Service Business

| By:
Mark Sokol

Now, how much would you pay?

While we may roll our eyes at this classic infomercial line, the truth is there’s tremendous value in understanding your clients’ pricing tolerance.

Finding the sweet spot between frightening customers away and giving away the farm takes some expertise.

Here are a few tips to get you started developing a business pricing strategy for long-term profitability:
Bundle up.

By packaging several of your services into one bundle at one price, you’re providing customers an easy buying experience. And selling multiple products and services in one solution means a greater return on the cost of customer acquisition. Standardizing your deliverables into bundles also translates into highly effective service-level agreements (SLA) and streamlines processes such as client onboarding, tech training, and billing, creating savings advantageous to your bottom line.

Avoid pricing battles.

It’s easy to assume whoever has the lowest price will win the most customers. Short term, maybe. But if your value story is built solely around a rock-bottom price, what happens when the competition undercuts you? Your primary value needs to be in providing outstanding ‘can’t find it anywhere else’ service and expertise. Instead of focusing on dollars, consider personalized client offerings such as a refresh of their equipment every so often. You’ll benefit by not having to service dinosaur technology, and your client will appreciate having the latest and greatest.

Analyze and assess your costs.

Evaluating price points should be an ongoing process in your recurring-revenue business. Track time, expenses, and overhead for an accurate assessment of what you need to charge. ConnectWise PSA™ (formerly Manage) makes it easy to calculate your effective rate, so can see the profitability of each client and can use that information to refine your business’s pricing strategy further.

Develop Winning Pricing

For a more detailed analysis of how to develop a solid pricing strategy that wins you more recurring revenue, download part 3 of the The Ultimate Guide to As-A-Service: Creating a Pricing Strategy.

Get the Guide!