How Highly Profitable MSPs set price: How to Price MSP Services

Before we go any further, price is hard. Everybody from the smallest shop to the largest enterprise struggles with it. There is as much art as science, but there are rules, there is a lot you can do, and I’m 90% sure you are underpricing your services. So here’s how to price MSP Services.

At the same time, the price isn’t impossible. If you don’t worry about getting it right, and worry more about getting it right for you, it’s very doable. The most important thing to remember is that when someone says, “Your price is too high,” they’re not talking about your price.

They’re telling you one of two things: they don’t see the value, or they don’t trust you to deliver it.

That’s it. That’s the whole game.

I know this sounds overly simple, but stick with me. Because once you understand what’s really happening in these conversations, you’ll stop cutting your prices and start winning more deals at higher margins.

The Real Reason People Buy (Or Don’t)

Picture this: you’re at the airport, starving, desperate for food. You find a sandwich that anywhere else would cost $3.99, but here it’s $18.99. What do you do?

Whatever action you take depends on how hungry you are. How important is it to you that you take care of your hunger. If you are hungry enough you’ll buy it without even asking them to remove the pickle and knock 50 cents off the price.

Now think about the last time you spent twenty minutes comparing prices on Amazon for something that costs twelve bucks.

Same person, completely different behavior. What changed?

The value equation.

When Will from F1IT was stuck at $280K, his clients constantly pushed back on price. He delivered quality results, worked until nearly dawn, and cut cost everywhere he could.

But his dentist clients saw him as a cost to control and budget.

You can’t scale an MSP if you are a cost center and play by the budget rules.

So, he made some changes.

He started with productizing his offer; same tech (well less tech since he reduced redundant systems) different packaging, and defined the value he delivered.

To understand value he talked to his clients, moved from QBRs to SBRs, measured the impact he had on their businesses (he had access to the data after all). His conversation shifted, and over the course of 6 months he doubled his prices, added services, lost two clients and ended up with twice the revenue for less work.

His clients now rarely mention price. They buy his business solutions and the impact on their bottom line, not IT support.

What changed wasn’t his service. It was how his clients perceived the value.

The Three-Part Formula That Actually Drives Buying Decisions

Every purchase decision comes down to this simple equation:

Value – Trust Risk Balance > Price = Sale

Let’s break this down:

Value is the importance of the transformation in the client’s mind—not what you think it’s worth or what it costs you to deliver, but how important they feel the transformation is.

Trust risk balance is their confidence in you delivering that value. Can you do what you say? Will you do what you say? And what happens if you don’t?

Price is just the entry fee. It can be high, low, or somewhere in between. It doesn’t matter, as long as the value minus the trust risk balance is greater.

Now, sit down for this one, it’s absolutely true, but it may cause your head to spin: People, all people, even dentists and CPAs, always buy when the Price of something is less than the value minus the trust/risk balance.

The problem most MSPs face is that they spend their time defending price instead of building value and trust.

And most advisors in the MSP space encourage you to do so.

But, it’s backwards.

Why “Budget” Is Usually BS

I’ve heard this story a hundred times: “They said they loved our proposal, but they didn’t have budget. Then they went with someone else who charged twice as much.”

Their budget wasn’t the problem. Your value story was.

When someone really wants something, when they see clear value and trust you to deliver, they find the money. They shift budget from other projects. They finance it. They make it work.

When they don’t see the value or don’t trust you, “budget” becomes a polite way to say no.

George at Biztech doesn’t sell “cybersecurity services.” He sells “DermProtect” a complete security solution built specifically for dermatology practices. His clients aren’t buying IT. They’re buying protection for their practice, their reputation, and their patients’ data.

Same underlying service. Completely different value story. And completely different price tolerance.

How to Build Value (The Right Way)

Building value isn’t about listing more features or working more hours. It’s about connecting what you do to what they care about.

Stop talking about:

24/7 monitoring

Response times

Number of endpoints

Technical specifications

Start talking about:

Revenue protection

Productivity gains

Risk elimination

Growth enablement

Here’s a simple test: if a business owner’s spouse could understand why your solution matters to their business, you’re talking about value. If they’d need an IT degree to follow along, you’re talking about features.

The transformation happens when you shift from “we provide managed IT services” to “we ensure your business runs smoothly so you can focus on growing revenue instead of fixing computers.”

Same service. Different frame. Different value.

If you already have clients, the best, fastest, easiest way to show value and grow revenue is by moving from Quarterly Business Reviews to Strategic Business Reviews. This workshop shows you how.

Trust Is Your Multiplier

Value gets attention. Trust gets the signature.

You build trust the same way you build any relationship: show up consistently, do what you say you’ll do, and prove your expertise through actions, not arguments.

This is why our Strategic Business Review process works so well. You’re not asking permission to be strategic. You’re being strategic. You’re asking business questions, identifying real problems, and following up with solutions.

When Joe needed his client to approve $150K in new hardware, he didn’t argue the technical merits. He set up one workstation for their slowest employee. When that person became the most productive, the CEO asked for the same setup for everyone.

No argument needed. The results did the talking.

What This Means for Your Pricing

Once you understand the value equation, pricing becomes straightforward:

Your minimum price should be 3x your direct costs. Anything less and you don’t have a sustainable business.

Your maximum price is limited by the value you deliver and the trust you’ve built. In a perfect world, you’re charging about 1/3 of the value you create.

Everything between those two numbers is about market positioning, competitive pressure, and how well you communicate value.

But here’s what most MSPs get wrong: they start with cost and add margin instead of starting with value and subtracting price.

The Bottom Line

Stop competing on price. Start winning on value.

Your clients don’t want cheaper IT. They want their business problems solved. They want to sleep better at night knowing their systems are secure. They want to focus on growing their business instead of managing technology.

Give them that, prove you can deliver it, and price becomes a minor detail in a much bigger conversation.

When you get this right, you’ll stop hearing “your price is too high” and start hearing “when can we get started?”

That’s the difference between selling services and delivering solutions. And it’s how you build a business that grows without you having to work harder.

Want to see how this looks in practice? Book a demo with Start Grow Manage, and we’ll show you exactly how to reframe your services as high-value business solutions.