Ask an MSP Expert

Q: When I’m trying to close a managed service deal and I run into a pricing objection, I have a hard time getting past it. How can I confidently overcome a pricing objection?

You’re certainly not alone when it comes to this. In fact, a survey conducted by HubSpot found that after establishing urgency (42 percent) and getting in touch with prospects (37 percent), overcoming objections (35 percent) is one of the largest challenges salespeople face today. Often, a pricing objection isn’t about what price you’re offering your services for, but rather the value—or lack thereof—seen by your perspective customer.

To help you overcome pricing objections with confidence using proven tips and tactics, we looked at the MSP’s Ultimate Guide to Cold Calling and consulted your MSP peers. Each MSP shared unique insight on how they navigate this challenge to close more business.

Everyone wants a good deal

Generally, SMBs usually want to spend as little as possible on their IT. However, this often leaves them open to security vulnerabilities or at risk for data loss—which can end up being more expensive than hiring a solution provider in the first place. That’s why it’s important to position IT services as an investment for your SMB customers.

With cyberattacks becoming more prevalent and mainstream, it should come to no surprise that regulators are starting to crack down with hefty fines for security-related compliance violations. In fact, just this year the Fresenius Medical Care North America settlement showed that five breaches can cost an organization millions of dollars. While it might seem like healthcare practitioners would want to jump on board with managed services to avoid hefty HIPAA penalties, Michael Kaplan of Kaplan Technology Consulting shared that he often runs into pricing objections when talking to prospective clients. But, he explained that he often wins over these businesses by showcasing the value and how an MSP solution can protect them. 

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One thing to keep in mind when you’re talking to prospective customers is that your conversation shouldn’t be about doom and gloom. Instead of talking about the worst-case scenario for their business if they don’t use a managed service provider, ask them questions to discover how you’ll be an asset to their business. In the MSP’s Ultimate Guide to Cold Calling, Carrie Simpson of Managed Sales Pros suggests, “Build a business case for a managed services contract that covers the unthinkable but focuses on the positive benefits that companies reap when they make that change.” This will help you find areas where you can highlight the unique value you can provide to their business.

Providing value to businesses

Systems and processes can change quickly, and that’s why having a managed service provider can be so valuable for small businesses. Instead of learning how to implement a new email filtering system, remembering to update systems with the most recent security patches, or simply setting up backup sets and creating a disaster recovery plan, small businesses need to feel confident that YOU are taking care of their day-to-day IT needs.

Electronic Computer Systems’ Brent Fairbanks has had to work to establish his expertise often, especially with older business owners who are resistant to change. “The best way to support a customer or system is to be familiar with their systems and business. There is a tangible cost associated with maintaining that familiarity,” Brent says. “If you saw a hole in your physical building, you would certainly repair or replace it wouldn’t you? The fact that you cannot ‘see’ the hole is giving you a false sense of security.” That’s why it’s important to implement a managed service plan, Brent explains. The trick is really taking the time to highlight the overall value to their business and what one error can really do to business they have established.

Continually pitch the value of your offering. What can you offer your SMB customer that they can’t do themselves? What can you offer them that your competition can’t? To truly eliminate price objections and avoid running into them in the first place, you need to go into each conversation with a quantifiable unique selling proposition that only you can offer the customer. After all, pricing usually isn’t the problem; it’s the customer’s perception.

Photo:  Paolo Schorli / Shutterstock.

Lauren Beliveau

Posted by Lauren Beliveau

Lauren is an Editorial Associate at Barracuda MSP. In this position, she creates and develops content that helps managed service providers grow their business. She also regularly writes The MSP’s Bookshelf and our Ask an MSP Expert column.

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