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Pricing our Managed Support



Graphic of a pie chart and calculator

Do you ever wonder how a Managed Support Provider (MSP) comes up with their pricing? While we can't speak for others, in this article we'll pull back the curtains and let you know our approach.


One idea that's important to understand is that true Managed Support is typically done under an "All You Can Eat" model, where your organization gets unlimited hours of support for a pre-defined set of services at a predictable monthly rate.


Our Philosophy

We want our pricing to be fair, transparent, and simple.


Fair because it aligns with our goal of being partners, not just vendors. And partners work with each others' best interest in mind.


Transparent because we value trust in our relationship with our clients.


Simple because we all have better things to do with our time than working out complex equations to get everything just right. At some point, it costs more to be be perfect than the value you receive from such an exercise.


Tiered vs Simplicity

A common convention when pricing services is to offer 3 tiers to give a potential customer the choice. We won't get into the psychology of it here, but it is a tactic I'm sure you are familiar with.


We have found that our clients tend to have the same needs, so why add confusion to the process unnecessarily? Especially when they might end up choosing a solution for the wrong reasons! Understanding the many nuances of IT support, along with the reasons behind why decisions are made is not an area of strength for our typical clients. It's why we exist.

So we offer only one option for Managed Support. Our plan is designed to include all the day-to-day needs your organization might have.


While our base plan is the same for all our clients, we do offer some add-ons, such as backup services, security/compliance, and voice solution.


While this is great from a simplicity perspective, how do we make it fair? After all, not all organizations require the same level of support. Some have very basic tech needs, while others have complex requirements.


Single Plan at a Custom Rate

Our solution is to provide a standard plan, but customize the rate based on our anticipated costs. How do we do this? Well, it's a bit tricky, and not an exact science, but it is close enough to allow us to feel comfortable that we are reaching our goals of being fair, transparent, and simple!


We have built a good ol' Excel spreadsheet that calculates a per-user rate. It factors in the number of devices for each user, number of locations, complexity of the environment (servers, software dependencies, etc.), and overall tech literacy.


This calculator gives us a relatively accurate prediction of what it will cost to support your organization. It allows us to establish a per-user rate, so that as your organization grows, you can scale up at predictable costs.


Why not just bill on hours spent?

We understand the appeal of only paying for the hours spent (plus our tools). It certainly feels more fair, accountable, and trackable. But there are a number of downsides to per-hour billing:


  • unpredictable billing

  • it provides the wrong kind of motivation for your support provider

  • it makes your team more reluctant to reach out for help when they need it (costing productivity)

  • adds time and energy cost in having to justify, or at least explain, the are complex and nuanced decisions IT support teams must make


For the best productivity results (which are far more beneficial to your organization), you want your support team working proactively to prevent issues and downtime. You want them to have the freedom to decide where and when to invest time and energy.


Yes, the flat-fee billing requires more trust between the partners, but when done correctly, the benefits to both sides are much greater.


We'll do a more thorough breakdown of this in a future article and link it here when it's up, this subject could fill a novel!


Scheduled Increases

Each November we evaluate any changes in our costs and adjust rates across the board for our clients. We give notice in November and the new rate takes effect Jan 1st. This allows us to keep pace with inflation so we can be sustainable and gives our partners predictable and easy to understand adjustments.


What if things change?

As time marches on, organizations change. Sometime they implement new software that requires less management. Sometimes they open up additional offices, or add new products/services. These are just a couple of examples.


Things can change for Northrock too. If there is a new service, tool, or offering that will positively affect a majority of our clients, we will add that to our stack. Or if something is no longer useful, we'll remove it.


Each month we calculate how much it is costing to support each of our partners. This allows us to understand how things are changing and react to it. The nature of all-inclusive plans means our labour costs can vary significantly from month to month. So we evaluate on 3-month (or longer) trendlines.


If we determine that costs have changed and fall outside the sustainability of our current rate, we'll investigate causes. If it is related to our internal processes, we'll fix those and re-evaluate after a few months. If things have changed in your organization that are driving the changes, we'll let you know during one of our reviews what we believe a new fair rate will be (whether it's going up, or down!), along with our reasons why.


We do not enforce long term contracts. If we cannot come to an agreement on a proposed rate change, our clients are free to explore other providers and and if they find a better fit, we will continue supporting at the current rate for up to three months while they move on.


This could be an uncomfortable topic, but we have confidence in our solution and processes, so we take the approach that if a client does not see the value in what we do for them, it's best for everyone for us to go our separate ways, and we stive to be able to allow that without negativity and as little friction as possible.


Conclusion

It is our goal to support your organization at a rate that is fair, simple and transparent.


We want you to feel well supported by our solution, feel comfortable that you are getting great value from your investment in us, and of course we need to make sure that our business is sustainable so we can be there for you today, tomorrow, and into the future.


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