A Roadmap For Increasing Prices Without Losing Customers

By Justin Crotty, senior vice president and GM of NetEnrich

One of the most frequently asked questions by VARs and MSPs is “How can I increase pricing without losing customers?” The answer is that VARs and MSPs must clearly communicate the value proposition of their services; otherwise they may never be able to justify the increase. This, however, is easier said than done, with many VARs and MSPs still competing on price, rather than value. So, how do you make more money?

• Price On Value, Not Cost. VARs and MSPs should never set pricing based on how much it costs to deliver their services. Pricing should always take into consideration the benefits received by the end user. For example, VARs and MSPs must articulate that by increasing the cost of the service, the customer will benefit from a quantifiable savings in time or money that offsets the price increase over the long term.
• Provide Customized Solutions. To further demonstrate value that will, in turn, validate price increases, VARs and MSPs should bundle products and services that are designed to streamline customers’ IT operations and deliver a long-term savings in time or cost. Doing so will position the VAR or MSP as a strategic advisor — one who understands the needs of its customers and can provide solutions that are customized to meet the unique challenges they face. And, when customers realize that they are getting more “bang for their buck,” and not simply paying more for the same service, it will be easier to overcome price objections.

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