Pricing, are you getting it right?

Richard Tubb

One area that MSPs spend the most time considering - even worrying about - is their pricing.

If you charge more than your competitors, you’ll lose business (or so the conventional wisdom goes). If you don’t charge enough, you’ll fail to grow as a business.
So how should you ensure you are getting your pricing right?

Undercharging attracts the wrong type of business

Price-and-valueThere are always clients who will go for the cheapest - and so if you are more expensive than your competitors, you’ll find clients who will chose your lower priced competitors over you. But are these really clients you actually want?

Clients who shop on price alone are rarely satisfied. We’ve all had clients like this! The ones who never trust your judgement or experience, are always second guessing your advice and are forever “nickle and diming” you on quotes. “I can get that $5 cheaper...” is a phrase you’ll often here from this type of client.

Oh, and I’m willing to bet that if you recognise this type of client then you’ll also be used to the fact that they are typically late payers too. Right?

It’s worth remembering that this type of client, the client who shops on price alone, are, by their very nature, always looking for a better deal.

And here’s a reality check - there will always be a competitor who will offer to do the work cheaper than you. Faster than you? Probably not. Better than you or more reliably than you? Almost certainly not! But as any of us who have dealt with clients who shop solely on price knows, logic regarding quality of service goes out of the window for those who want to buy something as cheap as possible.

So, by setting your prices too low you’ll end up attracting the wrong type of business.

How do you know if you’re setting your prices too low? A good rule of thumb is that if you have too many clients who exhibit the painful behaviours I’ve shared here then your prices are too low and need adjusting immediately.

Being expensive loses business, right?

So we’ve covered the fact that some clients will always shop based on price alone. We’ve also covered the fact that these types of client are typically people you don’t want to have to deal with.

Next, it’s worth addressing the fear that if you’re charging more than your competitors that you will lose out on business to them.

What if I told you the opposite was true? That by charging a premium for your services, you’d win more business, make more profit, and find yourself working with the type of clients you really enjoy forming relationships with?

In my experience, by charging a premium for your time and experience, you’ll not only qualify out those clients who shop on price alone, but will attract the type of client who is looking for quality over price.

These are clients who have thriving businesses and want to partner with an IT company who can help them take their business to the next level. They are clients who will respect your time and experience, won’t second guess your advice and guidance and will rarely haggle over quotes. Oh, and they’ll almost certainly pay on time too. Why? They are businesses that act in a professional manner and want to deal with other businesses that act in a professional manner - and they appreciate this level of professionalism doesn’t come cheap.

It may seem counter-productive, but by raising your prices and charging more than your competitors, you’ll end up winning more business - and of the right type.


How do you know if you are getting your pricing right? Simply put, if I were to ask you that question today and you answer with something like “We’re probably not charging enough” - then you’re definitely not charging enough.

By undercharging, you’re likely attracting the wrong type of client - those that shop on price and come with a lot of baggage.

By charging a premium for your time and experience, you’ll attract the type of client who respects you and is a pleasure to work with.

Do yourself a favour. As we move into the year, make sure you’re charging appropriately for the value you bring to your client relationships. If this means putting your prices up, then do so. Today. It’s a move every growing business should take, and very few regret doing.

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