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July 2, 2010
By Erica Ayotte, Marketing Strategist at Intronis

Intronis Online Data Backup Expert Tips: Pricing Online Backup to Your Client Base

You have a great online backup solution. You have a customer base that needs the service. But how do you structure your pricing to make profits?

Partners often struggle with determining a price that reflects both the product and the service that they offer. Though your pricing will differ according to your location and your portfolio, we’ve noticed that our most successful partners share a few common strategies.

However, before you start structuring your pricing, it’s essential to position your business as a value-added service, not merely as an intermediary between the client and the product. Once your clients understand your value proposition, then you can price your services accordingly.

Read more about positioning managed services to your clients…

The most important concept to understand regarding pricing is that MSPs need to differentiate between what it costs you for online backup and what you charge your customers for it—including the time and money it costs you supporting that software. Strong, value-added services such as installation, upgrades, and restoration are all part of the service you offer your customers.

Other examples of valuable add-ons:

  • Monitoring
  • Data maintenance
  • Periodic business continuity testing
  • Disaster recovery plans

Determine Your Per GB Charge
First of all, make sure you have a basic per GB charge. You can include tiers into your pricing structure to incentivize more usage. For example, you could charge $4 per GB up to 9 GBs, and then $3 per GB 10-19 GBs, and so on. Remember: data always grows. You can expect to bill your clients more over time.

The amount you charge can also depend on your location. In rural locations, you can expect to charge approximately $2/GB just for storage space and up to $5/GB for managed services. In minor metropolitan areas, you may want to charge $3/GB for storage and up to $8/GB for managed services. In major metropolitan areas, MSPs can charge $5/GB for storage and $10-$15/GB for managed depending on the industry.

Additional Charges
Beyond the per GB charge, you can add fees for computers, servers, or licenses. Even though Intronis doesn’t charge you any start up or licensing fees, that doesn’t mean you can’t charge your clients for the service of installing the software on multiple machines.

Other fees you can add include software migration and other set up fees. These are the fees that you need to charge for the service that you’re providing. If you’re charging for just the raw storage space, you’re cheating yourself. Other creative pricing strategies are to charge extra for local vault, plugins, and SQL and Exchange.

Additionally, if you have a client who is already using an image-based solution, you can position online backup as a complimentary service. First of all, you can use our solution to backup those images. Or you can use our solution to backup laptops. For example, most laptops need only file-based backup, not system configurations. So offering online backup for corporate laptops is a good way to combine existing services with Intronis’ solution.

Billing Strategies
The best strategy is to bill your clients monthly. Data always grows, so if you bill annually or even quarterly, you’ll lock yourself into a particular price and you may end up even losing money. Keep your billing cycle flexible so you can charge the actual cost, not a cost based on outdated information. A good rule of thumb to keep in mind is the longer the billing cycle, the less profit you’ll earn.

Also, Intronis charges partners monthly, so you’ll be able to look at your costs and easily compare them to your profits.

Along with your monthly bill, send an executive summary to your clients. List a few key metrics—usage, backup frequency, restorations, etc.—and use graphs so clients can tell at a glance their network and other operations are functioning properly and that your service is adding value.

The most successful MSPs set the right expectations and don’t undersell the value that they’re providing. Make sure that your pricing structure reflects all the services you provide to your clients.

About the Author: Erica Ayotte is Marketing Strategist at Intronis, a Boston based Managed Online Data Backup company. For a free trial of Intronis, click here.

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