User Based All-In Seat Price (AISP)
I advocate for the all-in-seat price model as the optimal approach for managed IT services. Pricing by user is the most business-friendly and easiest to scope. If services are priced correctly with standardized client environments, the number of devices should be irrelevant — unless the environment has more devices than users, in which case systems should be counted instead.
Client-facing pricing should be as simple as possible. Since clients engage with MSPs precisely because they don’t want to handle technology, presenting proposals with multiple line items like endpoints, firewalls, and servers creates confusion. A confused mind makes no decisions.
You may use complicated internal spreadsheets to calculate costs based on device numbers and configurations. That complexity should remain internal. When pitching to prospects, present the simplest possible price structure.
Avoid overly flexible, mix-and-match pricing models. Using Portugal’s service-based internet pricing as an example: à la carte pricing frustrates customers and negatively impacts their perception of service quality. Instead, set fair market prices that cover costs and allow reasonable margins, while enforcing standardization and offering comprehensive service packages.
MSP Pricing Strategies
Fixed Fee Pricing
Pros:
- Easy to communicate
- Includes everything clients need
- Prevents surprise charges
- Allows providers adequate margins
Cons:
- High cost to clients
- Limits the customer base
- Requires strong standardization
Tiered Pricing
The industry standard “gold, silver, bronze” approach offers multiple service levels to appeal to different markets.
Pros:
- Price flexibility
- Easier to sell broadly
- Prospects choose based on budget
Cons:
- Lower tiers may attract less mature clients
- Complexity makes standardization harder
- Budget options may create poor value experiences
Per Device Pricing
This model addresses complex, unstandardized environments with high device counts.
Pros:
- Variable pricing based on device changes
- Clear device inventory tracking
Cons:
- Contracts often not adjusted when devices change
- Multiple technical line items confuse clients
- Administrative billing burden is substantial
Per User Pricing
My preferred approach. Instead of charging multiple low prices per device, charge one higher price per person supported.
Pros:
- Simple for clients and providers
- Allows flexible internal costing
- Filters for clients seeking full-value partnerships
Cons:
- Cost-conscious prospects may not perceive value
- Requires defining service stack clearly
- Demands strong client standardization
Per-user pricing typically ranges from $125-150 per user, and when calculated for existing clients, often matches their current device-based pricing — surprising those initially resistant to the model.
How a Mature Price Model Benefits Your Business
Pursue higher-value clients rather than competing on price. By increasing the all-in-seat price to match delivered value and focusing on robust technology solutions, seek clients who understand the value of comprehensive service partnerships. Over time, prioritizing higher-margin opportunities creates business sustainability.
For more on pricing strategy, check out ERP056 - How To Price Your MSP Offering.