5 Steps to Pricing Managed IT Services

Many IT service providers often struggle with the task of pricing their services. Managed services, along with the resulting managed service contracts have further enhanced the complexity of the process.

As you are probably aware, pricing services is often more challenging than pricing products.

This is because you can always point at the physical cost of making a product, but it’s very subjective to calculate the value of your time, worth of your counsel and expertise of your staff.

5 Steps to Pricing Managed IT Services

You can use the underlying 5 steps to price managed IT services; the trick is to figure out your operating costs along with your target profit while setting the prices for your IT support services.

1. Calculate An Hourly Rate

Before you begin with pricing, it is important that you calculate the hourly cost and selling rate for a single technician. This is because many a times, clients require customized services over pre-defined packaged services.

Chances are that even the most comprehensive service package would lack certain specific needs of the customers. So, calculating hourly prices and selling rate for a single technician would prove beneficial for correctly pricing your managed IT services.

2. Evaluate The Costs And Profits For Break/Fix Services

Determine the total costs and profits for break/fix services. This would help you in better revenue prediction and also increase your chances of building lone-term relationships with all your clients.

This estimation done well will help your company to be proactive as well. This will promote the management teams to better engage with users and discuss IT in terms of revenue for creating communities of customers that share best practices.

3. Determine The Cost And Profits For Managed Services Model

Automating the managed services model helps in effectively removing the bottlenecks of break/fix model. In addition, it also improves the profitability while providing an opportunity of building long-term, professional relationships with customers.

Automating the managed services would enable you to deliver efficient IT services to an increasing client base. This would put you on the path of building successful and profitable business.

4. Calculate Price Per Desktop For Managed Services Model

After you’ve calculated the hourly cost and selling rate for one single break/fix technician and finalized the staff that will deliver automated managed services, you can now determine price per desktop for managed services.

5. Price Additional Services And Develop A Price Per User

After pricing all your services and analyzing per user price, you are now all set to offer bundled managed IT services to the customers. In addition, managed IT service providers should also review their prices on a regular basis in order to optimize their profitability.