Blog | August 13, 2014

3 Tips For Beating Cloud Pricing Paralysis

By Jay McCall

BSM-Business

Originally seen on Ingram CloudTalk

You put a lot of thought, research, and training into selecting your latest cloud service and you know that coming up with an attractive price is very important. But, don’t fall into the trap of analysis paralysis, warns Jason Etheridge, president and CEO of Logic Speak, an MSP that’s projecting 25% revenue growth this year, following last year’s 15% revenue growth over 2012.

Etheridge offers the following three tips to those struggling with pricing their cloud/managed services:

1. Your Pricing Isn’t Etched in Stone. Unlike the 10 Commandments, which have remained unchanged for thousands of years, it’s okay to change your prices from time to time, says Etheridge. “Your clients will help you determine if you’re too expensive, and your net profit will tell you if you’re too cheap.  Don’t be afraid to raise your prices, and even better — don’t be afraid to lower them. Some of the nicest comments we’ve ever gotten were from a discount that we were able to pass along to our clients because we changed backup vendors.”

2. Evaluate Your Prices Yearly. Get in the habit of evaluating and setting your prices for the upcoming year in November, he advises. “This gives you a month to use your price increase to sell your holdout clients on a locked-in price for the following year.  They’ll feel like they “got in under the wire” and you got them off the fence!  Change your price any more often than that and you’ll create confusion and frustration (and more pain for whoever does your accounting).”

3. Offer Discounts (Just Not Forever). “Your client loves your cloud service.  They are really excited about implementing it as quickly as possible.  There’s just one thing.  It is just a little too expensive.  If only it were a little cheaper, they’d be ready to go!  Sound familiar?  Discounts are a part of sales.  Don’t be offended or discouraged — go ahead and offer that discount. But, here’s the trick: Expire the discount after a fixed amount of time.  “Sure Mr. Valued Client, because of our great relationship over the past several years, I’m happy to give you that cloud service for 15% off for a year!”  They will get all warm and fuzzy over having gotten a discount and you get the satisfaction of signing up another client.  After the discount expires, you’ll have them hooked.”

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