9 months without a new client

An IT business we recently started working with changed its pricing and packaging nine months ago to solve a longstanding profitability problem.

The new approach was better for profitability. It was more realistic to deliver consistently. And it brought their pricing in line with “industry standards.”

The owner loved it. The techs loved it.

By the time we started working together, they hadn’t sold a new customer in over six months.

Their close rate had dropped to zero. And virtually every objection from viable prospects on winnable deals sounded like this:

“We like you, but you’re a lot more than everyone else we’ve talked to.”

We also used AI to see what a prospect researching IT services in their region might find. The pricing expectations it created were significantly lower than what this company was offering.

You can disagree with those expectations. You can explain why the competing quotes probably don’t cover the same things. You may be right about both.

But that’s the buying environment this company was selling into. And “our pricing is in line with industry standards” wasn’t getting deals across the finish line.

I see versions of this very often in the IT/MSP space, and in B2B services in general. A business fixes how it prices and delivers its services, then discovers it’s built something really damn hard to sell.

There are three things that need to work when you price and package your services:

When an MSP has been undercharging for years and needs to fix its margins, profitability understandably gets the attention first. You triage, just like an emergency room.

Deliverability usually gets some attention, too. The techs have been complaining about shitty clients, bespoke services, being spread too thin, and spending too much time tracking what’s included for whom.

So you standardize. You tighten the scope. You build a package your team can actually deliver without losing their minds.

And in many cases, it’s a better service for the customer. It includes the coverage, protections, and support you believe they should have to keep their technology working and their business protected.

All reasonable.

The trouble starts when you’ve made all those decisions and expect sales to figure out how to sell the result.

Sellability needs to be part of designing the offer. Because the service you ultimately want a customer on and the first thing you ask them to buy don’t have to be the same thing.

That’s where I am seeing a lot of MSPs getting stuck.

They’re selling the end point as the beginning point.

Think about what the prospect is being asked to do. Pay the rate you ultimately want them paying, buy the full scope you want them using, and sign a long-term commitment, sometimes for years.

All before they’ve had any real experience with your team or company.

It’s a marriage proposal on a second date.

And from your side of the table, it makes perfect sense. But you’re looking at the decision with a lot of information and experience they don’t have.

They’re looking at a company they just met, a significant monthly expense, a commitment they may be nervous about, and two other quotes that are lower than yours.

Put yourself in their shoes for a minute.

They don’t care what margin you’re trying to hit. They care about what this does for THEIR business. And they may not value everything in your package nearly as much as you do.

I talk about this a lot in sales training: people buy what they want. Not necessarily what they need.

If knowing what we needed were enough to get us to buy it, we’d all be eating a lot more kale and getting a lot more use out of our gym memberships.

We know what we need. We just want something else.

You see the same thing with business owners. They’ll spend money on a new salesperson, a marketing campaign, or a billboard, then fight you over a couple thousand dollars a month for IT.

From your perspective, that makes no sense. You’ve seen their network. You know the vulnerabilities. You know what could happen.

From their perspective, the salesperson and the billboard help them get something they want: growth. Your IT proposal may look like an expense taking money away from it.

They can agree with every problem in your assessment and still prefer to spend the money somewhere else.

The fact that a prospect needs your service doesn’t mean they’re ready to buy it from you, at that price, on those terms.

Being right about what they need doesn’t get you very far if you can’t help them want to do something about it.

Broccoli is what more of us probably need. Chocolate is what more of us want.

As business owners, part of our job is figuring out how to deliver what people need and package it in a way they actually want to buy.

I call it making chocolate broccoli.

When you reprice solely around profitability and deliverability, you can end up selling a very expensive plate of broccoli.

Yes, it’s probably good for them. Yes, it’s efficient for your team to prepare. And yes, you’ve finally priced it so you make money serving it.

You still have to get somebody to order it.

The chocolate might be fixing the specific issue that’s been driving the owner crazy. It might be a useful initial engagement they can approve without committing their entire IT operation to a company they barely know. It might be a smaller ongoing service that fits their business today.

Something they can see themselves saying yes to.

And here’s where this bites you in the ass: if a competitor has figured out how to put even a little chocolate on their offer, you may be asking the prospect to choose between something they want at a lower price and something you keep telling them they need at a higher one.

How do you think that goes?

Now, I know some of you are already thinking, “Industry standards, Ray.”

“Best in class, Ray.”

“Other MSPs are charging this much.”

Fair points. Those numbers are useful. You should understand what healthy businesses in your industry charge and what it takes to deliver a good service profitably.

But knowing what successful MSPs charge doesn’t tell you everything you need to know about how they win customers. And it certainly doesn’t tell you everything about winning customers in YOUR market.

A national average can leave out a lot of what matters in your next sales conversation: the alternatives your prospect is considering locally, the reputation you’ve built, where your leads come from, and how much those people already know about you before they get on a call.

And what a client pays today doesn’t tell you what they bought first.

Some may have signed up at full price from day one. Others may have started years ago with a different scope and moved up as the business, the relationship, and their requirements changed.

If you’re using that company as a model, the way they acquire clients deserves as much attention as what those clients eventually pay.

Let me give you an example.

A couple years ago, I went to a $5,000 Acquisition.com workshop. Through that experience, I was pitched a $30,000 program with greater access to Alex Hormozi and his team. Once inside that program, I was invited to invest $100,000 for a more exclusive level of access.

I watch a lot of their shit on YouTube, and I haven’t heard them talk about that $30,000 or $100,000 offer a single time.

They had a progression of offers. I could make an initial investment, experience the business, and consider a much larger investment from there.

They didn’t need me to be ready for a $100,000 commitment to become a customer.

And once you start looking for this, you see it in things you buy all the time.

You buy an airline ticket, then get opportunities to pay for a better seat, more flexibility, or lounge access.

You book a hotel room, then consider the ocean-view upgrade, breakfast package, spa, or rewards program.

You start using a piece of software on a plan that fits what you need today. As your team grows or you need more functionality, there’s another plan to move into.

You go into Starbucks for a regular coffee and come out with a pumpkin-flavored milkshake and a sandwich.

You can try a winery’s tasting before buying a case or joining its wine club. You can have dinner at a restaurant before deciding it’s where you want to host your company’s holiday party.

Different purchases, different commitments. But you’re surrounded by businesses that have figured out how to let people start somewhere and give the right customers reasons to spend more.

In the MSP world, we can get so focused on where we want every client to end up that we make it unnecessarily difficult for a new one to get started.

That also helps explain why you might successfully upgrade your existing clients and struggle to sell the same package to new ones.

Your existing clients have experienced your responsiveness. They know your team. They’ve seen you solve problems and follow through.

That changes what they’re willing to commit to.

The owner who found you through a ChatGPT search last week is making a different decision with a lot less information. They have your promises, some reviews, and whatever they’ve seen during the sales process.

The difference in trust is part of what your offer has to account for.

How do you make it easier to buy without blowing up the economics of your business or pissing off your entire team?

First, decide whether that’s actually a problem you want to solve.

A tightly standardized, full-service-only model can be a deliberate business choice. You may be willing to accept fewer new customers in exchange for a simpler operation, more consistent delivery, and a very specific client profile.

If that produces enough of the right business to meet your goals, great.

Build your marketing and sales process around finding those buyers.

But if you’re falling short of your growth goals and repeatedly losing viable deals, I’d take a hard look at whether your initial offer is making the decision harder than it needs to be.

Here are three paths I’d consider.

Keep it.

Some prospects are ready. They already have an MSP, they’re accustomed to paying market rates, and they want a better experience.

Or discovery uncovers enough urgency and need that the full engagement makes sense now.

The problem is assuming every otherwise qualified prospect should enter through that same door.

This is for a business that should be on your full plan but needs more confidence, clarity, or experience with your team before making the commitment.

For example, a 30-day engagement that includes an assessment, fixes one or two agreed-upon issues, and produces a roadmap for what needs to happen next.

And I mean a legit assessment with findings and recommendations specific to their business. Sending them a link and handing over the same automated report every other MSP offers doesn’t cut it.

The engagement has a defined timeline, specific deliverables, and clear limits on what you’re taking responsibility for.

The customer gets something useful for the money. They experience your team. You learn more about their business and how they operate as a client.

At the end, you have a scheduled conversation to review the work, explain what remains, and recommend the appropriate next engagement. That meeting is part of the process from the beginning.

And the sprint should be worth buying even if they don’t continue. If the customer pays for an assessment and some agreed-upon fixes, they need to walk away with those things.

This is for a prospect who’s ready to buy ongoing help, but whose business can be served appropriately without the whole enchilada just yet.

You define what’s included, what isn’t, the service hours, the response expectations, and the limits. You also define what changes would make that plan stop fitting.

Maybe their user count exceeds a certain number. Maybe their support needs consistently exceed the agreed scope. Maybe a new customer contract, security requirement, or compliance obligation changes what they need from you.

Those are reasons to revisit the engagement. And you should have a process for doing that.

You also need to ask yourself:

If this client never upgrades, but stays within the boundaries of this plan, am I still happy to have them?

The economics need to support that answer.

For all three paths, my view on pricing is the same:

Price = delivery cost + CAC (customer acquisition cost) recovery + desired margin.

Put dollar amounts to those components. Account for what it really costs to deliver the engagement, the customer acquisition cost you need to recover, and the profit you intend to earn.

None of these should be a loss leader. If the smaller engagement only becomes a good deal for you after an upsell, go back and fix the price or the scope.

Your minimum requirements deserve the same attention. If they include everything you’d recommend in a full engagement, you’re back to asking them to buy the end point.

Set those requirements around the work you’re agreeing to do, the customer’s actual circumstances, and what you can responsibly deliver. A vCIO may have a long list of recommendations for where the environment should end up. Work out which of those are necessary for the engagement you’re selling today.

There’s a big difference between the environment an experienced IT professional would ideally build and what a business owner is prepared to invest in today. Explain what needs to be addressed now, what can be done in stages, what remains their responsibility, and where you can’t reasonably accept the engagement.

Some prospects won’t qualify for the smaller option. Some won’t qualify for any option. If they refuse the requirements necessary for you to do the work properly, disqualify them.

You may decide all three paths make sense. You may find that a full-service offer and a paid sprint are enough. The options need to fit a business your team can actually operate.

And I wouldn’t present them like a menu.

I’d build discovery around understanding the prospect’s business, what they want to accomplish, what’s getting in the way, what they’re ready to do, and what kind of engagement would actually work.

Then I’d make one recommendation.

Your prospect should leave knowing what you recommend and why.

The goal is to win more of the right customers profitably. Giving yourself more ways to do that still requires qualification, good discovery, disciplined delivery, and the ability to say no.

It also requires a process for helping clients move into more appropriate services as their needs change and the relationship develops. Schedule the reviews. Make the recommendations. Explain the value of the next step.

You can’t build a plan around “we’ll upsell them later” and leave later to chance.

This is one approach. There are others. I’m not pretending every MSP should sell the same three offers or that packaging is the reason behind every lost deal.

But I do want more MSP owners to question the assumption that an offer is right for new-client acquisition because it hits an industry benchmark and makes the delivery team happy.

Those things matter. So does whether enough people in your market will buy it.

With the business I opened with, we’re keeping the full-service option and incorporating a more limited ongoing plan where it fits.

We’re revising the discovery playbook to get more specific about where each prospect is today, what they’re ready to do, and how to scope an engagement that meets them there.

We’re asking the rep to turn around a nine-month sales drought within 60 days. Improving how we scope and recommend the service is part of the work to get there.

If you’re in a similar position, look at the decision you’re putting in front of someone who barely knows you.

Is your offer designed around the relationship you eventually want, or the decision a good prospect is ready to make today?

You may know exactly where that customer needs to end up. Figuring out how to get them there is part of the job.

Put some chocolate on the broccoli.

Adios,

Ray

P.S. — As fractional sales managers, we help MSPs improve their sales process, playbooks, training, and execution. Sometimes that means rethinking the offer, too. If you need help turning qualified opportunities into clients, chat with our AI assistant to see whether MSP Sales Partners is a fit.