Successful managed services marketing is dependent upon getting your pricing right. Cloud services, in particular, are increasingly in demand. However, because margins are sometimes thin, accuracy in pricing is imperative.

ChannelPro-SMB publisher Michael Siggin, along with guest experts Earle Humphreys (CEO ITEEx) and James Gaskin (a technology author, consultant, and speaker), held a webinar a while back that spelled out two fundamental options:

1. Cost-based approach. You determine how much it costs to deliver your service and then factor in a profit margin. As long as you actually make sales, then by definition, you’ll be making a profit.

2. Competitor-based approach. You look at what other providers charge for cloud services and set your pricing within that range.

These choices could also apply to other managed services marketing, but a third one is hidden in the presentation that deserves more emphasis.

3. Value-based approach. The big difference compared to the two above is that you look at what your customers want, what value they see (or not) in your cloud services, and what they’re prepared to pay.

If you’ve been wondering how best to approach this kind of managed services marketing:

Start with value-based pricing (C), then check what you’ve found against cost-based pricing (A) and competitive pricing (B).

If necessary, define a couple of options for your service offering, while still keeping it simple. Then you can sell the full service to customers who see value in all of it, without losing sales to those who only want to pay for a more basic version.

How many of these ideas from Humphreys and Gaskin do you use in your managed services marketing? Which pricing approach works best for you? Tell us in the comments section below.

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