Q: Recently, we’ve been adding more and more customers that want managed services. While we love getting new business, it’s hard to keep track of all the different pricing plans now! We started offering new plans to generate more business, but we grandfathered our previous customers into their existing plans. Lately, our techs have been getting mixed up on which customer has what plan and what plans we’re currently offering. I feel like it’s time to get organized. What is an effective way of keeping track of it all?
Congratulations on adding more customers to your MSP! It sounds like your promotions have been effective in converting more SMBs from break fix services. We know finding a solution for organizing your pricing plans can be tricky, but doing so will help you and your team be more efficient when talking to your customers — and it will save you a lot of headaches.
To help answer your question, we consulted one of the Intronis Partner Managers, Stephanie Shane. Stephanie works closely with Partners to help them maximize their potential as MSPs, so she has some great insights on how to simplify billing. Here is Stephanie’s advice on how to create a billing plan that will make your life easier as an MSP:
How to organize your pricing plans
Creating a billing plan is an easy way to organize your pricing plans. A billing plan is a configuration you can set up in your management program to give you information on how you’re going to charge your customers. This gives you the freedom to do what you want to your billing and customize it to fit the needs of each customer. In many programs, you can choose the default billing or create your own plan.
A billing plan usually consists of the name of the plan, the size of the plan, and the price of the plan. It can also include information such as how much extra you’ll charge customers that go over their allotted plans and how much you want to charge per device. There are a few different pricing models you could implement for your business, such as:
-The fixed pricing model: Customers are charged a simple flat fee each month. This can be used to charge customers by service, by user, or by device.
-The per gigabyte model: Charges are based on the amount of data customers use each month. Many companies use this model, but it can set you up to compete on price instead of the added value of your services.
-The bundled services model: In this approach, you offer different levels of services to your customers, such as gold, silver, and bronze. These preset packages make customers feel like they’re getting a good value because of everything that’s included, and a billing plan will help you analyze if it is priced effectively.
-The percentage model: This is the percentage you decide to charge based on what you’re paying for the services you’re reselling. Although this is an effective method, it becomes harder to track when multiple services are added on.
Why a billing plan is beneficial
Billing plans are great because you can see both what you’re being charged for services and what you’re charging your customers. This allows you to have an idea how much data your customers are using, and it gives you visibility into your profit ratio. Creating a billing plan is fast and easy, typically only taking six to 10 minutes to set up. Once you have the billing plan set, you can use it for multiple customers or opt to create a new billing plan to reflect different services.
For example, the Intronis ECHOplatform has a billing plan feature built in, and it can be accessed through the Customer Snapshot. With this tool, you can view on any given day how much data each customer is using, how many devices they have, and how much you’re charging them. For example, you can see that you’re charging them X amount per computer and that per gig over their plan you’re charging Y. This is easily customizable to fit the pricing model you want to implement for your customers, and the information can be integrated with multiple tools such as Excel or QuickBooks, which can help you analyze the information and simplify your invoicing process.
Billing plans are an important way to keep you and your techs on the same page, and these best practices will help ensure that you’re billing plans are successful.
-Standardizing billing makes it easier to add new customers to your services. Although you can create individualized billing plans for each customer, standardization makes sure everyone is on the same page when talking to potential customers.
-Updating defaults. If you have software that allows you to create a customizable billing plan, do it. Adjusting the plan to fit your company’s pricing policy will save you time and help avoid confusion.
-View your results, check your billing plan’s tracking, and make sure your business is profitable. If not, go back to the drawing board and see if some adjustments in your pricing can help.
Creating a billing plan doesn’t take long, and it’s well worth the effort. It will help your business maximize profitability and simplify the way you charge customers.
Ask an MSP Expert is a weekly advice column answering common questions from MSPs and IT service providers. It covers topics ranging from pricing and selling to marketing and communications—and everything in between.