Introduction
Flexibility remains crucial in having successful partnerships in Managed Service Providers (MSPs). In offering White label managed IT services to MSP partners, it is crucial to maintain a flexible and scalable pricing model for it to succeed in the long run. Having the right pricing structure helps MSP partners resell your services to their clients profitably.
Due to the competitive nature of the MSP market, a one-size approach will not work for everyone. Partners and their client bases have varied needs, and it is important that the pricing models enable partners to meet each of their customers’ demands while maximizing their own profits.
In this blog, we explore together how to build flexible models for white-label MSP partners so both sides can grow, ensuring mutual success.
Why Flexible Pricing Models are Crucial for MSP Partnerships
Flexibility is equally important when working with white label MSP partners. This is justified on several levels:
Addresses all Customer Requirements:MSPs serve customers in a range of industries, and even the distribution of clients across industries can vary. Having a budget and flexible pricing helps MSPs tailor their service offering to keep their clients satisfied and profitable, much like how providers of assignment writing services customise solutions to meet diverse academic needs.
Encourages Growth: Having a pricing model that allows scalability means an MSP won’t be limited by rigid pricing structures. Pricing models need to adjust accordingly as their client base continues to grow.
Fosters Stronger Relationships: Elastic and clear pricing builds trust and helps sustain long-term collaborations. MSPs appreciate the ability to grow alongside your offerings, without being ensnared in a rigid pricing structure, which fosters loyalty for ongoing service usage and investment.
Improves Profit Margins: MSPs can offer competitive pricing with healthy profit margins while maintaining different service levels, features, and usage patterns due to a thoughtfully crafted pricing model.
Now that we’ve covered the importance of flexible pricing, let us look at the types of pricing models that suit white-label MSP partnerships the best.
Forms of Adaptable Pricing Models for White-Label MSP Associates
There are several models of pricing you can apply to MSPs considering varying types of clients and businesses. In this post, I will highlight the few most impactful structures of pricing white-label services.
- Subscription Based Pricing
Subscription-based pricing is arguably one of the simplest and most predictable ways to bill MSP partners. In this case, partners make payments during the specified period, be it monthly, quarterly, or annually, depending on the services they are offering.
Key Features:
Fixed Pricing: Set a fixed price for a predefined set of services which helps MSPs to offer bundled services to their clients.
Tiers Options: Multiple pricing tiers can be availed based on service levels such as Basic, Standard, and Premium where higher tiers come with extra features or support.
Scalable: Subscription pricing as scales effortlessly is easier for deeper integration into new partner MSPs. Additional users, resources, or services can be added without taking a major hit to the pricing structure.
Why It Works:
Guarantees MSPs a consistent revenue stream month after month.
Remains effortless for the MSP and their customers.
Adoption of more clients or services remains effortless, benefiting MSPs.
Service usage such as computing power and cloud services are charged based on a pay-per-use model. This pricing structure is best suited for services with significantly varying usage among customers like bandwidth, cloud storage, or computing power.
Key Features/Benefits:
- Variable Pricing: Price changes based on usage whether it’s per device, user, or per GB of data used.
- Scalable: More clients or services can be added by the MSP without the cost of them increasing or decreasing depending on usage.
- Cost-Efficient: Smaller MSPs or those with varying service needs benefit greatly as costs match their needs.
Why It Works:
MSPs dealing with varying service demands benefit from captured cost flexibility.
MSPs can effectively scale up, especially with cloud infrastructure where resources are leveraged as needed.
Key Features: Predictable Revenue: Revenue is predictable, therefore it increases or decreases relative to the amount of devices being used, making this easier for both the MSP and their clients.
Scalable: The revenue model works better in this scenario as MSP’s gain new clients and manage more devices. For each additional device managed, additional revenue is received.
Simple to Implement: For the MSP, management of serviced devices is simple.
Why It Works: The pricing model is easy to comprehend for both the provider and business and works well for the provider servicing a large number of devices.
Removing or adding devices is easy within the customer base.
Example: An MSP could purchase a package for $5 per month for each monitored device and receive white-label managed services like monitoring, patch management and device security for 100 devices.
This pricing model works best when MSPs are white labeling your services to their customers. It offers a share of the revenue that the MSP receives from using your service.
Key Features:
Shared Profits: Instead of a flat fee, you pay out a portion of revenue based on sales made through resale by MSPs.
Incentive-Based: The MSP’s earnings grow with the number of customers they acquire, reselling services and generating revenue share.
Scalable and Flexible: Increased revenue share as the MSP grows and brings in more business is beneficial to both parties.
Why It Works:
Helps MSPs get access to wide sop directed at selling services which boosts their revenue share.
MSPs are encouraged to develop their brand around your white label services which develops long lasting partnerships.
Example: Granting a 20% revenue share with no maximum ensures that as MSPs grow, revenue from your partnership grows too.
For larger or more intricate Managed Service Providers (MSPs), a specific pricing framework may be needed to meet their individual needs. Custom collaborative pricing strategies can be developed for the MSP’s business model, service offerings, and customer relationships.
Key Features:
Tailored Plans: Custom pricing based on the exact services, number of clients, and complexity required by the MSP.
Flexible Adjustments: Can incorporate subscription, pay-per-use, or per-device pricing, or any combination thereof, based on the MSP’s requirements.
Volume Discounts: Gradually paying less as the MSP grows and as the number of clients or services they manage increases.
Why It Works:
Provides maximum support to large or specialized MSPs with specific service need and offers the most flexibility.
Should pricing changes be need to be altered, this model can evolve in accordance with growth and shifts in demand.
Example: An example of this is a large MSP with multiple services and diverse clients. They could be offered a blended structure with subscription fees, user-based charges, and performance-related incentives to provide a tailored optimal strategy.
Conclusion:
Creating effective pricing strategies for white-label MSP partners helps develop and maintain partnerships. Empowering MSPs through various pricing models such as subscription-based, pay-per-use, per-device, revenue-sharing, or tailored options complements their ability to serve clients while scaling and profiting on their business.
MSPs are able to minimize overhead costs, optimize service delivery, and improve profitability. Alongside improving profit margins, these models strengthen the relationship you have with your MSP partners, improving satisfaction, retention, and sales.
Providing flexible pricing is essential for thriving in today’s rapidly evolving marketplace. Implementing diverse pricing models aids in capturing new partners while retaining existing ones, ultimately driving mutual growth and profit.
