The Real Reason You’re Afraid to Raise Your MSP Prices
Most MSP owners know their pricing is broken. They feel it every time they look at their margins, every time they can’t afford the hire they need, every time they lose sleep over a client who’s paying too little for too much work.
But they don’t fix it.
Not because they can’t do the math. The math is simple. They don’t fix it because they’re afraid.
The Three Fears Holding Your Prices Down
When we talk to MSP owners about pricing, the conversation almost always comes back to the same three fears.
“I’ll lose my clients.”
This is the big one. You imagine the conversation where your best client says, “That’s too much, we’re leaving.” That fear is so vivid it overrides everything else. So you keep your prices where they are and tell yourself it’s the smart move.
“I can’t justify the increase.”
You look at your service and wonder if you’re really delivering enough to charge more. You think about the tickets you resolved and the uptime you maintained, and none of it feels like a compelling story for a higher price.
“My competitors are cheaper.”
You’ve seen the proposals floating around. Someone’s always willing to do it for less. You convince yourself that raising your prices will just hand your clients to the low-cost guy down the street.
Here’s the problem with all three of these fears: they’re backwards.
Fear-Based Pricing Is a Death Spiral
When you keep your prices low out of fear, you’re not protecting your clients. You’re weakening your business.
Lower margins mean less money for good technicians. Less money for good technicians means worse service delivery. Worse service is the thing that actually makes clients leave. Not your price.
Joe Rojas, who built and sold three MSPs before co-founding Start Grow Manage, learned this the hard way. “When I started my first MSP, I charged $75 per user per month,” Joe says. “My actual cost to deliver was about $60 per user. I was running a business on $15 of margin. Per user. Per month. And I thought I was doing fine.”
At those margins, Joe couldn’t hire the people he needed. So he was answering every escalation at midnight, getting tired, making mistakes, and getting more afraid that a client would notice. That fear made him even less likely to raise prices. It’s a cycle that feeds on itself.
Your Clients Don’t Think You’re Expensive. They Think You’re a Commodity.
Here’s the reframe that changes everything: if your clients are pushing back on price, the problem isn’t that you’re charging too much. The problem is that they see you as interchangeable with every other IT provider.
When clients see you as just another MSP who keeps the network running and answers the phone when something breaks, price is the only thing they can compare you on. You’re a commodity. And in a commodity market, the cheapest option always wins.
But that’s not a pricing problem. That’s a positioning problem.
In Joe’s second MSP, a client came to him with a competitor’s quote that was $20 per user cheaper. Instead of panicking, Joe pulled up the client’s numbers. He showed them that downtime had dropped 80% since his team took over. Help desk tickets were being resolved in half the time. And he’d identified a compliance gap in their tax software that could have cost them six figures.
“That $65 provider will keep your email running,” Joe told the office manager. “But do they know your industry well enough to catch a compliance risk before it costs you real money?”
The client stayed. Six months later, they agreed to a price increase.
The 3-Step Pricing Fix
If you know your pricing is off, here’s what to do about it. This isn’t theory. This is the process Joe used in his third MSP and what SGM walks coaching clients through today.
Step 1: Know your actual numbers.
Most MSP owners don’t know what it truly costs them to service a client. Not a rough guess. The real, fully loaded number: technician time, tools, licenses, overhead, divided by your managed users.
Once you have that number, multiply it by three. That’s your price floor, the minimum you need to charge for a sustainable business. If your current pricing is below that line, you’re not running a business. You’re subsidizing your clients’ IT.
Step 2: Build your value story.
Before you raise a single price, you need to answer one question for every client: “What business outcomes have we delivered in the last 12 months?”
Not tickets resolved. Not uptime percentages. Those are expected. What did you do that saved them money? Made them money? Reduced their risk? Helped them grow?
If you can’t answer that question, you have a bigger problem than pricing. You’re delivering service without tracking its value, which means you’re invisible to the people writing the checks.
Step 3: Have the conversation.
Don’t send a pricing email. Have a meeting. Walk through the value you’ve delivered. Share your roadmap for the next year. Then present your updated pricing.
When Joe started doing this, he was able to almost double his prices. Later, when he was more confident, he would walk into prospect meetings and say, “I am the most expensive MSP you will talk to.” He leaned into charging more by talking about the value he delivered and the business benefit clients would experience.
The result? Clients would tell him, “Honestly, I’m surprised you weren’t charging more.”
That moment, when a client says they expected you to charge more, is how you know you’ve been operating out of fear rather than value. The fear was yours, not theirs.
The Bigger Picture
Everything above, knowing your numbers, building a value story, having the pricing conversation, is part of a larger shift. It’s the shift from running a traditional MSP (where you’re a technical vendor competing on price) to operating as a BSP, a Business Solution Provider (where you’re a strategic partner priced on the outcomes you deliver).
A BSP doesn’t guess at pricing. A BSP has Strategic Business Reviews that quantify the value they deliver to every client. A BSP raises prices confidently because the client sees them as an investment, not a cost line.
That transformation is what everything at Start Grow Manage is built around. Not just charging more, but building a business that’s worth charging more for.
Where Do You Stand?
If you’re reading this and thinking, “I know my pricing is broken, but I don’t even know where to start,” take the BSP Readiness Assessment. It’s free, takes about 15 minutes, and gives you a clear picture of where your business stands across pricing, positioning, operations, and more. You’ll get a personalized score and know exactly what to work on first.
Because here’s the truth: you already know your pricing needs to change. The only question is whether you’ll do something about it or spend another year leaving money on the table.
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