Countering Artificial Commoditization and Poor Pricing Practices in Managed Services

I stumbled upon awesome white paper from my friend Larry Walsh and the teams from N-Able and Netenrich.  As an experienced MSP consultant or MSP Coach who has built a very successful IT Support firm, I often stop and think about how my MSP coaching clients are pricing themselves in the marketplace today.  There is a pricing challenge in our industry.  It starts with how we see our value as an IT Professional” or “IT Consultant” versus just the regular “joe computer fix it guy”.

Larry’s teaser says it all:

A plague has befallen the managed services marketplace. Once the bastion of predictable revenue and sustained profitability, MSPs are watching their average sale prices and margins erode precipitously under competitive and economic pressures. As services become more prevalent, end users have more choice in whom they buy from and what price they’ll pay for various managed services.

I have my own theories on why today’s IT service providers, I can’t call them MSPs anywhere are struggling on price and in some situations making up competition in their head.  Yes, we have competition out there but do we really?  I think many of us make up the competitive threat because we see a new competitor pop up on the horizon or we hear an industry leader such as Arnie Bellini mention at IT Nation that DELL or Microsoft have their sights on our business model and we have to “unite” to combat it.

Get the report from the 2112 Group and read it…let me know what you think?

Download the Countering Artificial Commoditization and Poor Pricing Practices in Managed Services

Here is my last thought from the article and then I will let you check it out.  Stop talking CUSTOMERS and focus on CLIENTS who get IT.  Many of struggle to generate the right revenue for our business because we don’t know who our ideal CLIENT is!  There are only two bad “C” words in my vocabulary and CUSTOMER is one of them.  Stop worrying about competition and focus on attracting CLIENTS who get the value you deliver!  Do this now!

Cheers

Stuart Crawford