Knowing your business through and through is the best way to support your customers and continue to offer the best services. In a crowded market, it’s tempting to reduce prices in an attempt to stay competitive, but it’s the businesses that work to expand their value, services, and general know-how that find the greatest success.
On the latest episode of our Stories from The IT Nation podcast, Karl Bickmore, CEO of Snap Tech IT, and Julianne Rose, Product Marketing Manager at ConnectWise, discussed five of the best ways to sell the value of your services instead of reducing your prices. Here are some of the key takeaways, tips, and best practices that they shared.
Take These Steps to Help Your Customers Recognize the Value of Your Services Learn more >>
1. Know How to Expand
Many companies face challenges when deciding whether they want to expand from being a managed service provider (MSP) to a managed security service provider (MSSP). It can be hard to make the shift to become an MSSP because the fundamentals of each business can prove very difficult. After all, in the rapidly evolving landscape of IT, it’s important for MSPs to have at least some kind of quality security offerings and taking on more security responsibilities can be daunting.
Some businesses choose not to make the jump from MSP to MSSP, choosing instead to remain an MSP but become reputable for their security services. Other MSPs create valuable partnerships with MSSPs so that when a customer does require an MSSP’s assistance, the company will have solid vendor relationships to rely on.
Learning to make that distinction between where you are, where you want to be, and what’s the best fit is important to the growth of your business and the value you provide to your customers.
2. Decide What to Outsource and What to Keep Internal
For much of IT’s history, security has been focused primarily on prevention tactics like setting up parameters and firewalls. As such, many MSPs underestimate the value of detection and how critical it can be for your business and customers. From Endpoint Detection and Response (EDR) to Managed Detection and Response (MDR) and more, MSPs have plenty of powerful options.
Outsourcing security tactics to another company can be an excellent way to bridge the gap between what you know and what you don’t know about your security services. It takes a lot of staff to run the kind of 24/7 services required for an effective SOC, and it can be more effective to have an outside provider take those tasks off your hands.
It’s the partnership between prevention and detection that makes any security service truly secure. Locking your door when you leave the house is one thing, but it’s even better to have an alarm system that detects what happens while you’re away and a company monitoring what you value most. Your clients want something similar for their business. Outsourcing that monitoring can provide them with peace of mind while saving your organization time and money.
3. Ask for More When You Deliver More
MSPs can struggle with whether or not to roll new offerings into their current prices or request more revenue for the additional service. As Karl puts it, that kind of question is ‘bonkers.’ Why would you decide to increase your costs without getting more revenue for that work? But bridging the gap between offering these great new services and justifying the price increase to customers is where things can get tricky.
Businesses shouldn’t be afraid to make a case for the new services that they’re delivering. Reminding customers that services will only be a few dollars more per user, while also providing a comprehensive costs plan is the best way to have them recognize the value in your services. Clients trust your business to be their advocate in the industry, and that helps new and returning customers understand that the added services far outweigh the additional costs.
Admittedly, long-time clients may have a harder time grasping why what they’re currently paying for isn’t enough. This requires an honest and open conversation in which you demonstrate your new services and help the client understand why they’re important and cutting edge. Showing that you’ve learned new information about how to better serve them, instead of highlighting on the price change, is your best course of action.
4. Deal with Undercutters
Some MSPs may undercut their prices to gain new business, which can hurt bottom lines all around. With a price increase, there should also be an increase in value—and if your business delivers the latter, you need to make that clear to your customers.
Remind your customers that the businesses with the lowest prices may not truly be delivering the services that they promise. As the saying goes, you get what you pay for. Think of it like choosing between a name brand product and a generic option. Not only do you expect to pay a little more for better quality, but you know you’re paying for a brand with a strong reputation.
Just because someone undercuts you, that doesn’t mean you’ve lost the sale. Selling value instead of a price tag is what keeps customers coming back.
5. Remember Your Needs and Your Customers
As a managed service provider, your job is to protect your customers and your business. The bottom line is providing optimal service to your customers and enhancing your own business. Any changes in services provided or business strategy should be done with both of those things in mind. Cutting your own costs may sacrifice the quality of service provided to your customers and negatively impact your profits.
Taking the right steps in order to build a better business model, foster authentic relationships with customers, and set the right standards for your prices and your customers can make all the difference.
See how the right expansion of services and customer service can change everything.