Control Profitability with Price Plans
Facing challenges with charging your Microsoft customers correctly?
When that monthly distributor invoice lands in the mailbox, CSPs are often met with a glaringly obvious challenge: the absence of detail. Queue the time-consuming task of trawling through Partner Centre and Azure, trying to distinguish which cost belongs to who, then applying different pricing rules and discounts… it’s an excel nightmare! We wouldn’t wish that upon any Microsoft Partner.
What’s crazy is, all of this is done simply to offer customers with custom pricing. Thankfully life has been made easier with the introduction of Azure Plan. That said, there are still many considerations CSPs need to take into account when setting pricing for customers.
Setting prices for customers doesn’t have to be a chore
CSPs charge customers differently for a variety of reasons. For example, some clients are larger than others, with higher tenant numbers or different license needs. Some are smaller with more bespoke needs, and resellers often have their own custom services and requirements too. CSPs are looking for flexibility to price their customers accordingly, and move away from a simple margin or percentage approach.
Let’s talk techniques to maximise profitability
Serious about growing your MSP business? There are many ways to maximise profits by delivering personalized pricing.
- Price according to the market – CSPs often want to price according to the market. Selling base subscriptions at list-price tends to be the norm, yet CSPs can choose to discount in order to up-sell in other areas. Price too high and customers may go to a more cost-effective competitor. On the flip side, if price plans are too low, business profitability could suffer if cross or up-sell strategies don’t work.
- Manage your margins appropriately – Also consider the cost of your business overheads and resources. Managing and setting margins closely gives CSPs the opportunity to make sure all costs are accounted for.
- Custom pricing – Every customer has their own unique requirements, so taking a tailored approach to pricing will benefit everyone. CSPs can make their lives easier by using pricing management tools that offer the flexibility to tailor pricing at a detailed level.
- Rewarding volume – SKU prices shouldn’t necessarily be charged at a fixed rate. User and tenant volumes and subscription types might be factors influencing your pricing strategy.
- Custom services and product bundles – CSPs usually want to set custom pricing for unique services. Some tools may not provide this functionality, or require CSPs to build additional tools to transact custom services. Also consider the benefit of product bundles, where you can increase the overall monthly subscription value, in exchange for a combination of slightly discounted subscriptions.
Don’t settle for one-size-fits all pricing plans, simply because the process of charging customers is limited by your existing workflow or process. If pricing can’t be set at a flexible and granular level, per SKU or resource, business profitability can be hard to control.
Bridging the gap to leverage flexibility
Spinpanel now supports custom price plans, allowing Microsoft Partners to define their product catalogue, sell custom services and set their own price per SKU and service. CSPs can create targeted customer segments to cover all offerings, meaning customers will have more clarity into their Microsoft 365 and Azure Plan invoices. On top of this CSPs will have more insight and power, to have full control and flexibility of their own pricing management.
Want to learn more? Get in touch today