The MSP Finance Team

Boosting MSP Profits with a New Pricing Policy

The two levers to manage profit are cost and revenue, often cost is overly focused on, and getting the revenue right is equally important and requires a strong hand on the ‘revenue lever’! 

Working recently with an MSP the topic of pricing policy in relation to user/device on/off boarding came up.   

The challenges included 

  • Team members charging inconsistently, sometimes for good reason such as when a new device was DOA or worse – had an intermittent fault, but other times because time recording best practice has been missed, such as recording time days after the activity, which almost always results in rounding down! 
  • Variation of customer devices, loose customer policies and processes around IT and security, adoption of Microsoft 365, before we even got to the customers IT stack or LOB applications. 

The MSP has been refining their user/device on/off boarding process, starting with how the customer communicates requests [tip; have a form, customised to each customer to ensure the right instructions are extracted from the customer at the beginning].  

The MSP wanted to document clearly for customers and the team what the policy was and how it could be best communicated to the customer. 

So we started with what the MSP wanted to achieve: 

  • Clarity for customers and team 
  • Promoting the MSPs objectives for stack consistency and security 
  • Reducing risk for customer and MSP 
  • Fair sustainable billing with no surprises 

We workshopped what good task execution would look like, ensuring we allowed enough time for when things don’t go to plan and also importantly testing and handover to the user, to reduce follow up helpdesk tickets and how the well managed customer environment would reduce that time estimate, providing a business case to support that solution [tip; use the breakdown of time to handle any customer objectives over the estimate; confidently justifying time]. 

The outcome?  

The team are clear on what they should be recording, and communicating to the customer, which means the customer is clear on how long the tasks will take and what the billing will look like following.  The customer can be supported and the MSP can operate efficiently whilst the customer evaluates continued improvements to their IT efficiency and security. [tip; consistent ‘business review’ meetings between client and account manager will help the customer understand the roadmap and over time execute MSP guidance]. 

From Daniel’s desk; feel free to reach out on LinkedIn to discuss this post with me 

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