Key Highlights
- It may be easier for MSPs to keep afloat now than in prior years. However, successful differentiation is harder.
- Stick your brand on the tip of your spear and jab your customers in the face with it — metaphorically speaking.
- Package and bundle for easily digestible services.
- Capture growth and upside from your customers by attaching your bundles to the highest growth units.
How MSP Service Packaging Strategies Drive Growth
In a crowded MSP landscape, service packaging can be the difference between dreaming of growth and waking up to it.
Bedtime Stories
The managed IT services market is one of the most competitive industries. Every year, more MSPs consolidate into larger platform companies. These entities look to standardize and commoditize for the sake of cost, efficiency, and simplicity for their customers.
Similarly, companies in the vendor ecosystem have formed and merged. Dominant players have gobbled up the most popular SaaS apps and tools to add features and functions to their ever-growing stacks.
As they compete to diversify, they essentially force their competitors to match their diversification strategy. This actually leads to the inverse, making it difficult to distinguish one provider from another.
This competition and innovation explosion is an overall net positive for the industry. These days, a small MSP has the tools, knowledge, and support to be successful. The floor has been raised and padded for your protection. The ceiling has risen as well, though. Now, it’s even harder to reach.
Recurring Dream
The challenge with the industry’s massive growth is the flattening of service offerings. Everyone uses the same ticketing systems, documentation platforms, RMM, cybersecurity tool stack, etc.
Pause before you say “I use Cylance and my competitors use SentinelOne,” or, “I use NinjaOne and my competitors use DattoRMM,” to your customers. These are still the same. Your clients do not see value in understanding any differences between them. They trust that you put in the work to choose the right solution.
The problem with this approach is that your customers see you and your competitors as potentially being one and the same. They don’t understand what value you bring compared to the guy down the street and your proposal is in a race to the bottom as a result.
“Who can do it for me cheaper?” will be the next question that comes out of your prospect’s mouth, and that’s never where you want to be as a service provider.
Waking Up
So how do you prevent this nightmare from becoming your reality? First, consider your service delivery model. How well you manage your customers and their technology plays a significant role in how you differentiate yourself. Of course, that’s assuming you can leverage it through customer referrals and marketing collateral.
The easiest way to control and prevent comparison shopping is through your packaging. How you price and package your services can mean the difference between how they are perceived and consumed by your clients.
The Quintuple Shot of Espresso
Here are five hard-and-fast rules to follow for packaging your service offerings:
1. ‘Per Unit’ MSP Pricing is the Name of the Game
Whether your service aligns with mailboxes, users, devices, endpoints, etc., you should tie your service to a unit that will scale with the growth of your client’s environment. Avoid selling single line-item services that cover one-to-many items that won’t let you control your margins.
2. Bundle, Bundle, Bundle
Present your customers with a single service line item that is unique to your brand. Though it may be difficult to attain, maintain that spirit as you build your service packages.
Customers hate the complexity of IT services. There are too many technical terms and acronyms. Frankly, they just don’t care. Rather, they want to be supported and protected. They want their monthly invoice to be easy to understand. Show them one line item that shouts your brand ethos, and can do it all for their business, and you’ll win their hearts.
3. Tiered MSP Pricing Offers Economies of Scale to Your Customers
Your customers should be excited to grow with you. They should be confident that you can save them costs as they reach certain seat-count milestones. Your per-seat price for a one- to 25-seat environment should be radically different than it is for 250-plus seats. This will win you larger deals without hurting yourself in the short term.
Imagine you’re engaging with a new platform rollup that is starting small but plans to grow 10x-20x in size over the next 12-24 months through acquisitions. It will want an aggressive price. Meanwhile, you need to protect your costs in the short term while the platform is small and scaling up. MSP pricing tiers accomplish both goals.
4. Offer Multiple Packages, but Don’t Get Too Cute
Every package must contain the essential items that YOU need to do your job and protect your business. Cybersecurity, data backup monitoring/management, 24/7 environment monitoring, etc., are all non-negotiable features.
You may choose to bundle all labor in your top package but bill any support or reactive hours on a time and materials basis for your lowest package. Perhaps you bundle all remote support, but bill for any on-site labor to deter your customers from requesting it.
Additionally, you may look to offer 24/7 live support for your top package, but only business hours support for entry-level clients. Ideas like this allow you to control your margins while offering more competitive MSP price points. Plus, it ultimately won’t compromise you or your client’s business if something goes wrong.
5. Don’t Charge for QBRs/SBRs. These Are Selling Opportunities.
Welcome every chance to engage with your customers. Quarterly business reviews (QBRs) represent trust and relationship-building opportunities that will enhance your stickiness and offer opportunities to upsell.
Frequently Asked Questions
Alex Joy
1. Why should I bundle services together rather than break them out clearly to show my clients exactly what they are getting? Isn’t this like hiding the nutritional information?
To be clear, you should absolutely have a statement of work (SOW) detailing the services your clients receive at a high level. But the way you bill should be as clean and compressed as possible to make it easily digestible for your client. The client does not want to see an invoice with 12-line items with similar quantities all tracking two or three different aspects of their environment. Make it clean, simple, and aligned with the most scalable unit in the environment.
2. How many different packages should I present to my customers to ensure that I have something that fits their budget?
First and foremost, you won’t necessarily fit every customer’s budget. Some customers simply may not value your services at the level they should. You should not chase those customers if they can’t be led to see your value.
Offer a maximum of three different packages to your customers. The drivers for differentiation for these packages should be labor, not cybersecurity, monitoring, or other functions that may come back to bite you for not having them in place. One package might include compliance management labor, for example, which only a subset of your customers may require.
3. What sort of discounts should I be considering for my pricing tiers?
Before answering this, it’s important to assess your labor burden across your customers. Typically, an efficient MSP-managed environment will require 30 mins to one hour of labor per endpoint. For smaller environments, start by accounting for three hours of labor per endpoint at your average labor cost (across your delivery resources) plus your subscriptions and hard costs.
As MSP-managed environments scale and approach 100-plus endpoints, add two hours of labor per endpoint. Similarly, as you get into the many hundreds or thousands of endpoints, factor in one hour of labor or less.
Smaller environments tend to be noisier and more labor intensive on a per endpoint basis, whereas larger environments tend to be less intensive overall.
4. How do I package with my brand ethos?
Brand ethos is the fundamental character of a business. It encompasses its values, principles, and overall spirit. It defines what the brand stands for and how it presents to the world.
For example, McDonalds bundled its fast-food favorites in a package for kids called the Happy Meal. Define your brand’s Happy Meal. It should shout what your brand stands for in just a few words to remind your customer that they are in good hands every time you slap it on one of their devices.
Alex Joy launched Ibex Staffing Solutions in April 2025. The company is built to serve the MSP industry by providing a blueprint for hybridizing MSP workforces with offshore labor. This helps improve competitiveness in the market, enhance quality of life for MSPs’ staff, and improve service delivery for their customers.
Images: iStock, Alex Joy
