How to Set Your MSP Price to Whatever You Want (If You Do This First)
Last week we talked about why MSP owners are afraid to raise their prices. This week we’re going one level deeper. Because even after you get past the fear, the next question is: “Okay, so what should I actually charge?”
The answer isn’t what most MSP owners expect. It doesn’t depend on your costs. It doesn’t depend on what your competitors charge. It depends on how focused your business is.
The Commodity Trap
Here’s the principle: price is a function of value, and value is a function of focus. If you serve everyone, you’re a commodity. And if you’re a commodity, price is a race to the bottom.
Think about what happens when you walk into a prospect meeting and say, “We do IT for small businesses.” You’ve just told them you’re interchangeable with every other MSP in town. The only question left is, “Who’s cheapest?”
Joe Rojas lived this for years. “My pitch was literally, ‘We’re a managed service provider. We handle your IT so you don’t have to,’” he says. “That’s what every MSP says. Word for word.”
The result was predictable. Prospects with three proposals on their desk, flipping between them, saying, “Well, you’re all basically offering the same thing, so…”
And then comes the worst part. You start going line by line through your proposal trying to find things to cut. “What if we only do six days a week of support? What if we only monitor the network during business hours?” You’re crossing out bullet points trying to get the number down. But cutting those line items doesn’t actually reduce your effort. You’re still going to get the call on Sunday. You’re still going to see the alert at 2 AM. All you’ve done is lower your price and set yourself up to over-deliver on an underpaid contract.
You Don’t Have a Pricing Problem. You Have a Positioning Problem.
Most MSP owners blame the market. “Clients in my area are cheap.” “Nobody wants to pay for quality.” “It’s a race to the bottom.”
But it’s not the market. It’s the positioning. When you position yourself as a commodity, you get treated like one. The race to the bottom isn’t something that happens to you. It’s something you create by refusing to get specific about who you serve and what problem you solve.
Positioning starts with three decisions most MSP owners have never made clearly:
Decision one: Who is your Ideal Client?
Not “small businesses.” Not “companies with 10 to 50 employees.” A specific client profile defined by a specific problem. Can you identify them clearly? Can you describe them so someone else would recognize them? Do you know where they congregate? Do they share a common problem you solve? If you can’t answer all four, you don’t have an Ideal Client Profile. You have a wish list.
Industry is shorthand. A client profile actually has less to do with industry and more to do with the problem you solve. That problem can cut across industries (CFOs at fast-growing companies; founders in constant-growth mode), or it can be a subset of an industry (accountants who use Thompson Reuters; personal injury attorneys who use a specific case-management software). Pick the problem you understand deeply, and the client profile follows.
Decision two: What is your product?
Not “managed IT services.” A named solution designed for that specific client’s specific problem. Something you can describe in terms of the business outcome it delivers, not the technology it includes.
Decision three: What is it worth?
Not what it costs you. What it’s worth to them. What does it save? What does it prevent? What does it enable? When you know that number, your price becomes obvious.
What Happens When You Get Focused
In Joe’s third MSP, he picked a vertical: architecture firms. He didn’t just say “we do IT for architects.” He built a solution around their specific problems. Architects run massive CAD files that choke on bad networks. They have project timelines where a day of downtime means a deadline penalty. Their compliance requirements around project documentation are specific and non-negotiable.
Joe packaged a solution around those problems. Named it. Priced it based on the value of preventing a missed deadline or a compliance failure, not based on his cost per endpoint.
“The moment I did that, price objections disappeared,” Joe says. “I wasn’t being compared to the generalist MSP down the street anymore. I was the guy who understood architecture firms. Nobody else was even in the conversation.”
Joe didn’t raise his prices by getting better at negotiating. He raised them by getting specific about who he served. The price followed the positioning.
This is the difference between operating as an MSP and operating as a BSP. An MSP sells IT services. A BSP sells business outcomes. And business outcomes command a completely different price.
The 4-Step Process
If you’re selling IT to everybody and competing on price, here’s how to get out of that trap.
Step 1: Define your ideal client.
Look at your current client base. Which clients do you enjoy working with? Where do you have expertise, or genuine interest? In the beginning, interest counts as much as expertise. You can really start anywhere. A lot of MSPs anchor on industry, and that’s fine, you’ll narrow over time (maybe to personal injury attorneys, maybe to architects, maybe to something more specific). What matters is that you can see problems your clients haven’t identified yet. That’s the test. If you can do that, you’ve found your market.
This feels terrifying. But as Seth Godin says: if you are marketing to everybody, you are marketing to nobody. By not focusing, you think you’re talking to a bigger market, but actually you aren’t talking to anybody. You don’t have to fire all your other clients tomorrow. Lead with a focus. Over time, if someone outside your wheelhouse calls begging for support, you can decide if you want to take it. But over time, you’ll want to do that less and less.
Step 2: Package your solution around a business outcome.
Stop describing what you do in terms of technology. “We monitor your network, manage your endpoints, handle your helpdesk.” Nobody cares. Describe what you do in terms of the problem you solve. Joe’s pitch to architects: “We keep your projects on schedule by making sure your technology never causes a delay.” Same services underneath. Completely different conversation. Completely different price point. That’s the shift from MSP to BSP. Same technical work, but framed as a business solution, not a tech service.
Step 3: Calculate the value you deliver.
What is a day of downtime worth to your target client? For an architecture firm with a deadline penalty, it could be $10,000 or more. When you can quantify that, pricing becomes simple. Your price floor is three times your cost. Your price ceiling is about one-third of the value you deliver. The gap between those two numbers is where confident pricing lives. Most MSPs can’t do this because they don’t know their clients’ businesses deeply enough. Picking a market fixes that.
Step 4: Lead with the value in every conversation.
Stop walking in with a per-user price. Walk in with: “Here’s the problem you have. Here’s what it’s costing you. Here’s how we solve it. Here’s what that’s worth.” When you’ve learned about their needs, the prospect isn’t comparing your price to the next guy’s. They’re evaluating whether your solution is worth the investment.
The Bigger Picture
This is the “S” in the SCALE framework: Set the Foundation. It’s the first step in the transformation from MSP to BSP, Business Solution Provider.
An MSP says, “We do IT for small businesses.” A BSP says, “We solve this specific problem for this specific market, and here’s what that’s worth to your business.”
Everything we’ve talked about today, picking your market, designing your product around a business outcome, pricing based on value—that’s what makes you a BSP. It’s the difference between being a technical vendor competing on price and being a strategic partner your clients can’t replace.
You can’t market effectively if you’re marketing to everyone. You can’t sell prescriptively if you don’t know your client’s problems.
You can’t price confidently if you don’t know what your work is worth. The foundation has to come first.
Where Do You Stand?
If you’re reading this and thinking, “I know I need to get focused but I don’t know where I am right now,” start with the BSP Readiness Assessment. It’s free, takes under 5 minutes, and shows you exactly where your business stands across positioning, pricing, operations, and more. You’ll see where you’re already making the shift from MSP to BSP and where the gaps are. You can save your profile and track your progress over time.
Pick your market. Build your product. Set your price. That’s how you stop being an MSP competing on price and start being a BSP that charges what you’re worth.
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