5 Ways to Increase Your Fees and Profitability and 4 Things You’re Doing Wrong That Lowers Them

Being in this industry for over 38 years, growing a successful 7 figure MSP and working with thousands of MSPs, we learned a few things about how to be successful and profitable. We learned several things that you MUST have in place if you want to grow your MSP, as well as things that you want to make sure you are NOT doing that can really hurt your MSP!

We’ve learned through direct experience at our own MSP and through the thousands of MSPs we have met and worked with. Let’s start with the five things that can help you to increase your fees and profitability!

1. Have a Mindset of Success

Having a positive mindset directly influences your confidence and your ability to overcome challenges. It is extremely important for you as the MSP business owner to have that mindset.

You need to believe that your services are worth your price, and you have to believe that you can solve your prospects problems successfully! If you had a salesperson that you hired and was in your office who felt uncomfortable selling, or thought that your prices weren’t worth it, or thought that you couldn’t produce the services that you were providing, how much do you think that that person would sell? Not much!

You need to have the mindset that what you have, the services that you offer, are fantastic, and keep that going through everything you do. If you can’t do this, you need to get your services to the place that they are providing maximum value for your clients!

2.  Make Yourself an Expert

To be an expert, you need to leverage the benefits of social media! Make sure that your profile shows your business and personality, and be active in interacting with current and prospective clients.

Don’t just post a couple of things and never come back to social media. It wasn’t until much later in our MSP journey that I realized how important it was to be out on social media and build yourself as that authoritative expert.

Other than on social media, there are a lot of industry events out there that are looking for speakers that would want to listen to you and what you have to say. Choosing the right topic and delivering it to these groups is a great way to position yourself as an authority!

Another way I did this was through creating a show called IT Done Right where I presented technology and cloud tips each month for over ten years. I, spoke at several different conferences and published over 100 articles. I was everywhere, and it helped people know who I was when I walked into a room. And again, that starts to gain that expertise that you’re looking for!

 

3. Specialize

We all know that specialists get paid more than generalists. For example, a cardiologist is going to get paid more than a family doctor, or an oral surgeon is going to get paid more than your regular everyday dentist that you go to twice a year for your six month checkup.

Having a specialization allows you to charge more for your services. There’s a lot of different ways that you can have a specialization at your MSP. You can specialize in a particular vertical, such as legal or medical. When we were an MSP we found a ton of success in specializing in cloud (shocker, right?)

Now, why did it work? We made sure to build ourselves as the go-to MSP for cloud so that when businesses were out there looking to be able to access their data and access their applications from anywhere at any time, we were out there as an authority.

If we ran across a prospect that wasn’t interested in cloud, we shook hands and moved on. We did not focus ourselves on customers or prospects that weren’t interested in what we had to do. Instead, we built a reputation on helping businesses in our cloud specialization, not to just fix their computers or provide managed services.

An added benefit was that few clients came to us with the common price objection since they knew that they were coming to us as an expert and specialization comes at a premium!

4. Don’t Waste Time on Clients Who Won’t Buy

Tying in with our previous point, there’s a lot of people out there looking for your services: your job is to go out and find those people and make sure they buy it from you (while sifting through prospects who don’t have interest in your specialization).

A lot of MSPs grow because they are sitting back and waiting for prospects to fall in their lap. You really need an aggressive outbound marketing effort: I call it our marketing engine!

Think of it like fishing. The more lines you have in the water, the more likely you are to catch a fish. It’s the same way with your marketing!

5. Measure Everything

You need to be measuring everything so that when a strategy is successful, you can document it and replicate it in the future.

If you’re doing what everyone else is doing, you’re going to get shopped on price (and get a lot of objections in this area), Even your clients are going to start to question what you do if they think that the MSP down the street is doing exactly what you do!

Measuring what you are doing is essential so that you can show prospects and clients what you can do or did for them!

Now, how do you measure things? You can’t expect your clients to share information like how much money you saved them or how much productivity you increased their business. Honestly, they probably don’t know!

Here’s an example with one of our customers. We specifically tracked the equipment and services we provided to this client and found that every two years we were saving them about $80,000 in equipment and labor costs by moving their servers to the cloud. With this data tracked, we created a focused case study on what we helped them with!

This case study helped us to sell to other prospects and reinforced to our customer exactly what we did for them and why we moved them to the cloud.

Just as a reminder, make sure you know what you’re going to measure before starting any project: you can’t do it after the fact!

Now we’ve talked about five things that can help you to increase your profits. Let’s move on to talking about five reasons why your IT services can fail to build value and end up inviting price objections.

 

1.Don’t Price Out Your Services

Pricing out services based on what you think you’re going to get is not a good strategy. What you do needs to be worth the price that you sell it at. If you have the right mindset and confidence, then your customers and prospects are going to understand that price!

2. Don’t Raise Prices Randomly (No Fluctuation)

We do have to raise our prices, and testing the waters with higher pricing is something that you want to do periodically. The last thing you want to do is not communicate these price raises to your clients! They need to be kept in the loop on price increases, and you need to be able to communicate why these prices are raising so that they don’t feel that the increase is random.

Remember, it’s easier to increase a little bit year after year than it is to have a large increase immediately after three years. If you’re never increasing your pricing, you’re going to get yourself in trouble; just make sure to do it correctly and respect your client base!

3. Failure to Create an Effective Sales Process

Not creating an effective sales process will cause it to be much harder to get higher fees from your prospects.

If it looks like everybody and their brother is doing the same thing, then you will get questions on price over and over. What makes you charge that price when other MSPs are requesting half of it?

 An effective sales process will communicate your value directly to your prospects and customers and leave no doubt to your expertise in a specialization of choice.

4. Don’t Frequently Discount your Services

To try and get a bigger deal, a lot of MSPs will discount their services. What ends up happening is that they spend so much time on that client that they end up losing money in the long run, which is not very good for them at all.

Make sure you don’t discount your services unless there is a compelling reason to do so, and definitely don’t overuse the offer!

Thanks For Reading!

Make sure to do something today that helps your MSP. The definition of insanity is doing the same thing over and over again and expecting a different result, so make sure to do something different today!

All these things I’ve talked about today need to be used as a positive marketing tool that will give you an advantage in selling your services and closing your prospects.

I’ll leave you with a quote from Tony Robbins: It is it is your decisions, and not your conditions, that determine your destiny. Thanks again, and please reach out if you need any cloud help at all