Every year, the cost of doing business for MSPs grows. Whether it’s the cost of rent, salary increases, or heightened prices on technology, your overhead doesn’t stay flat year-over-year. Yet, despite inflation, it can be uncomfortable asking your clients for a raise. You might be nervous you’ll lose the business—or you simply want to avoid potential conflicts during the conversation.
But don’t lose your nerve—there’s nothing wrong with raising your rates! Think about it this way: If you don’t raise your prices, you’re giving your clients an automatic discount equal to inflation. Are you comfortable with giving a 2% discount without getting something in return like a lengthier contract?
So, if you’re a little uncomfortable asking for more, try the following:
- Remember, it’s not personal—it’s just business. Your best clients will get this. They understand that prices increase from time to time. It’s just the cost of doing business—and if you’re underpaid, you won’t be able to continue providing the same level of service to each of your clients.
- Make it positive and focus on value. When you have your pricing conversation, frame the discussion in a positive, value-driven light. Mention how much you like working with them and how much you want to continue working with them. If you have numbers that prove your value, use them. Even just showing how basic patch management prevents breaches can be enough to remind clients of the unseen value you provide.
- Explain why you’re increasing prices. Often, people will agree to pay more if you offer a simple explanation. When they realize that marginally raising prices allows you to continue providing outstanding service and innovate to offer new services, they’re more likely to empathize and go along with the increase. After all, you’re both in business!
- Hold firm against objections. Some clients may balk at an increase, but you have to remain strong. Remember, it’s a negotiation—they want to keep their prices low. But if the tables were reversed, they would do the same thing. So, don’t let any pushback rattle you.
One last note about all this—your business’s brand depends on your ability to stay competitive and show continued value, which means that changes in pricing are often a necessary step in the process. If you keep pricing flat, you devalue your own work. And worse, your clients will see IT as a commodity rather than as a strategic value-add. A strong brand is backed by a strong business, and ultimately that means happier clients who renew their contracts—and a more successful bottom line for you.
Want to make sure your price increase goes along with providing greater value for your clients? Check out SolarWinds MSP N-central for your remote monitoring and management platform. It’s easy to get started and provides powerful automation that lets you improve efficiency, helping you keep more of the revenue you bring in.
Nadia Karatsoreos is the Manager of Community at SolarWinds MSP. She joined the team in 2014 to promote collaboration, education and innovation among partners. Her specific responsibilities include ensuring partners use the MSP suite of solutions to achieve positive growth, enhance their offerings and become best-in-class solution providers. Nadia is a familiar face in the channel, having spent five years with another vendor, leading its very successful Partner Development program. Nadia was named to CRN’s 2014 and 2016 "Women of the Channel” list, as well as CRN’s list of "100 People You Don’t Know But Should" for 2016. Nadia received her certification from CompTIA in Channel Management in 2014 and was previously part of CompTIA’s Future Leaders Executive Council. She is now on the Executive Council for the Cloud Community.
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January 25, 2017 at 12:29AM