One of the most common topics we encounter while working with MSPs is how to price BCDR for their customers.
We’ve encountered some very creative methods used, which we will share here. But first, we must remember that each regional and local economy plays a huge part in determining your ultimate go-to-market strategy. For example, we spoke with MSPs located in major metropolitan areas across the U.S. and all had reported that their markets were very competitive, making it a buyer’s market. In some areas, not only was there strong competition from other MSPs, but also a wide-ranging size of customers, which required working with onsite IT. Many MSPs located in suburban areas had reported not running into much competition, allowing them to set more profitable pricing.
Regarded as one of the most popular and safest options to go with. Typically, MSPs will double the cost, equating to a 50 percent margin. Others with a more conservative approach prefer a cost-plus model. Not only do they believe it’s a more transparent and palatable approach to use with their potential customers, but can also provide many other strategic and tactical benefits, according to Harvard Business Review.
Some MSPs report just bundling in a standard cost into a server or desktop management fee. Those that are creative can provide multiple options, which range from a capex to an opex-focused model depending on the customer’s preference. Meanwhile also catering to the preference of some MSPs that own the hardware as opposed to the customer.
Multiple Cloud Flavors
Certain end users, possibly due to regulatory requirements, can only use specific clouds. Many of these end users have an extensive private footprint at a data center or some use public cloud. It’s important to account for these types of situations and pick a pricing strategy that provides you with the flexibility of choosing your own cloud targets and not factoring in the cost of storage.
We recently met an MSP that found a harmonious way to work with large end users with onsite IT. The end user insisted on procuring their own solution and paying the vendor directly based on the CFO’s policy and had struggled to find an MSP that was willing to deploy a product in this type of situation. This MSP approached them and offered his services in the form of Managed Backup, which resulted in a win-win. The MSP was paid for their time and efforts while the company’s onsite IT didn’t violate policy.
Recovery Testing Add-On
Some savvy MSPs have learned the difference between offering BCDR as a solution rather than as a product. One way to tackle this is with a recovery testing add-on package that can range from an already included feature that automates the validity of the backups or a full simulation that’s orchestrated by the MSP to demonstrate preparedness. Whatever your approach is, demonstrate your subject matter expertise and differentiate yourself from the competition in the market.
To know which method would best suit your business needs, reach out to our expert staff of BCDR advisors.
Schedule a no-obligation consultation with a BCDR specialist today and increase your margins.