What’s the average MSP Pricing per User and per Customer?

Choosing the correct pricing system for your MSP can be quite a challenge. To provide competitive pricing, many MSPs will settle for unprofitable pricing schemes. Generally, if your MSP is not profiting, your service standards will start to suffer.

The result is that the attractively affordable service that landed you your customers in the first place ends up costing all those involved in the long run.

There are many factors to consider when deciding on your MSP’s pricing model. Below, we will touch on some of the most important aspects.       

How MSPs Price Their Customers

To make an educated decision, you need to know a little bit about the options available to you. So, let’s start by exploring the most common pricing schemes offered by MSPs.  

Per-device Pricing

In this pricing model, MSPs charge a flat annual rate per device. The fee is dependent on the type of device in question. For example, figures sighted in a recent TechTarget article were $69 per desktop/laptop, $299 per server, and $29 per network printer. 

Of course, this can become expensive for the customer if they have a lot of devices. Thus, the downside to this pricing model is that it might be difficult for MSPs to maintain competitive prices.   

In terms of advantages, charging per device is easy to keep track of and quote. Payments can be adjusted easily to account for any added/removed devices for the duration of the service.

Because this pricing model is particularly versatile, it is incredibly popular among MSPs, with 40-45% of companies adopting this pricing system.  

Per-user Pricing

In this pricing scheme, the company is charged according to the number of users on the network, rather than the number of devices. This benefits companies with employees who use several Apps and devices at once. 

Under the per-user pricing model, top MSPs charged about $125-$150 per user per month.

As the company workforce grows, MSP costs will increase, but this will ensure that service standards remain high regardless of company size and complexity.

The per-user pricing system is also easy to understand and quote for. This makes it a popular option, with around 22% of MSPs adopting this pricing mechanism.   

Tiered Pricing

With tiered pricing, MSPs will offer different packages for the customer to choose from. The tiers might be categorized as “bronze”,” silver” or “gold” or “basic” “advanced” and “premium.” 

The basic packages are the cheapest and offer minimal desktop and security services. As you pay for more advanced packages, the services offered will increase in complexity and value.

This option allows for services to be tailored according to the customer’s needs. Unfortunately, the customer does not always know what is best for them. 

The “basic” package might seem attractive because it is cost-effective. But, it might lack important features that a company requires. This will cost the company in the long run and can result in a bad experience for both the customer and the MSP. 

If you are interested in the tiered pricing approach, make sure that even the basic package is profitable. Avoid the trap of under-charging in a bid to get customers in the door. 

“All You Can Eat” Pricing 

This is when customers pay an up-front fee to an MSP that covers all services required, seen, and unforeseen. 

When this model is priced correctly, it can actually be the most profitable scheme for an MSP to adopt. Most MSPs offer an “all-you-can-eat” service fee of under $30,000 a year.  

It is easy for the customer to budget for MSP support, without having to factor in unforeseen expenses. This gives this pricing model a competitive advantage.

For this pricing scheme, it is imperative that all possible services are mapped out and assigned a value, from which the flat rate can be decided. 

Make your customers understand the extra services available to them under this option and be sure to emphasize the services often left out of the tiered packages. 

Useful Metrics

Each pricing scheme has its benefits and downfalls, which are very much dependent on your target market. But, no matter how you map out your pricing scheme, be sure to consider the following useful metrics.  

Average Price per Member

This calculation will need to be adjusted according to your chosen pricing scheme. See the averages mentioned above for a good estimation.  

Average Costs per Member 

How much money will you realistically have to spend per customer? Consider costs such as:

• Technician costs per hour

• Service delivery costs

• Costs per added user 

Average Total Revenue per Customer

Are you making a profit from each customer? This metric will help you decide if your current pricing scheme is making you money, or if perhaps, it is time to switch things up. 

Your profit will vary from month to month, which is why it is important to keep revisiting this calculation. 

To Conclude

For MSPs, the chosen pricing scheme is everything. We have very briefly touched on some of the most popular schemes in use today. 

Hopefully, this has given you a basic idea of a pricing system that may work for you. It could be a good idea to scope out the pricing schemes of MSPs in your area for an indication of what works. But be sure to do plenty more research before you make any final decisions.