Every MSP owner has been there: you set rates low to win the business, only to watch support tickets pile up and margins evaporate. Or you price too high and prospective clients ghost you. In today’s landscape—where cyberattacks grow more sophisticated by the week, clients expect rock-solid security, and budgets tighten—you need a pricing strategy that delivers value, keeps clients happy, and protects your bottom line.
In this 1,500-word guide, we’ll explore:
The core MSP pricing models (and real-world examples)
Source

• How to mix and match approaches for maximum flexibility
• Practical tips for evolving your pricing over time
• Key cost drivers you can’t ignore
• Common pitfalls (and how to avoid them)
• Why cybersecurity must be baked into every plan
• A mini case study showing these ideas in action

Whether you manage a five-person shop or a nationwide team, you’ll walk away with actionable insights to refine your MSP pricing in 2025 and beyond.

What Is MSP Pricing (and Why It Matters)

At its essence, MSP pricing defines how you charge clients for managed IT, help desk support, security, and compliance services. This isn’t just about covering your costs—it dictates cash flow, scalability, and profitability.
Predictability: Clear pricing means fewer billing disputes and smoother renewals.

Scalability: The right model grows with your client’s needs, not your headaches.

Profitability: Hit industry benchmarks of 50–70% gross margins—without the annual 5–10% erosion many MSPs suffer when they neglect price updates.

In 2025, pricing is also a statement of value. When clients see advanced cybersecurity, proactive monitoring, and compliance baked in, they view you as a partner, not a vendor.

MSP Pricing Models: A Quick Overview

Most savvy MSPs blend several approaches to balance predictability and flexibility. Four core models dominate the market today:

1. Per Device
2. Per User
3. Tiered Packages
4. A La Carte Add-Ons

Each has strengths and weaknesses. Let’s dig deeper.

1. Per Device Pricing
How it works: Charge a flat fee for every managed endpoint—laptops, desktops, servers, printers, firewalls, even IoT gadgets.
Typical range: $50–$150 per device, per month.
Best for: Small businesses with a fixed, well-defined hardware inventory.
Pros:

• Straightforward to quote: count devices, do the math.
• Clients understand it immediately.
• Predictable revenue tied directly to asset growth.

Cons:

• Doesn’t account for device complexity (a server vs. a printer).
• Encourages clients to under-report or delay new device rollouts.
• Limits revenue upside when users add multiple endpoints.

Tip: If you use per-device pricing, differentiate rates by device type. Charge more for servers or network appliances and less for peripherals.

2. Per User Pricing

How it works: One monthly fee covers every device a user operates—laptop, tablet, phone, and any future gadget you support.
Typical range: $100–$300 per user, per month.
Best for: Organizations with hybrid or fully remote teams and multiple devices per employee.
Pros:

• Simplifies billing: one line item per user.
• Encourages growth: adding a user automatically scales revenue.
• Clients love consistent monthly costs.

Cons:

• Might undercharge heavy-device users (e.g., developers with multiple test machines).
• Requires clear definitions of “covered devices” to prevent disputes.

Tip: Cap the number of devices per user (e.g., up to three devices) and price extra devices separately to protect your margins.

3. Tiered Packages

How it works: Offer bundled service levels—Bronze, Silver, Gold (or Essentials, Professional, Enterprise). Each tier adds more services and a higher price.
Typical range: $500–$5,000+ per month, depending on scope and features.
Best for: Clients who prefer an all-in-one solution with clear upgrade paths.
Pros:

• Drives upsells: “If you need 24/7 support, you should move to Silver.”
• Simplifies sales conversations with predefined packages.
• Encourages longer-term contracts for premium tiers.

Cons:

• Too many tiers confuse clients—stick to three or four.
• Overbundling can leave you absorbing high-cost services.
• Requires careful cost analysis to avoid negative margins on top tiers.

Tip: Use feature matrices to highlight what each tier includes—and what it doesn’t. Visual clarity reduces sticker shock.

4. A La Carte Add-Ons

How it works: Clients pay for individual services on top of their core plan—advanced backups, security awareness training, dedicated SOC services, password management, white-label VPN, and so on.
Typical range: Varies widely—$10–$50+ per user/device, per service.
Best for: Upselling existing clients who need customization without changing their base package.
Pros:

• Flexible revenue sources.
• Lets clients tailor solutions precisely.
• Increases average revenue per user (ARPU) without revisiting contracts.

Cons:

• Harder to forecast revenue from month to month.
• Risk of “scope creep” without strong change management.
• Requires clear documentation of service boundaries.

Tip: Bundle popular add-ons together at a slight discount to encourage adoption, but maintain stand-alone pricing for true customization.

Mixing Models for Maximum Impact

No single model fits every scenario. Many top MSPs adopt a base per user rate for core services, layer on tiered packages for premium support levels, and offer a la carte cybersecurity and backup modules. This hybrid approach delivers:

1. Predictable base revenue from per user/device fees.
2. Growth incentives via tier upgrades.
3. Revenue flexibility through add-on sales.

By giving clients choice, you cater to budget-conscious small shops and compliance-heavy enterprises alike.

Evolving Your Pricing Over Time

Locking in a model is just the start. Your MSP pricing must evolve:
Track Usage and Costs

1. Analyze your PSA and RMM data for tickets, hours, and tool licensing.
2. Identify clients bleeding time—and adjust their rates or service levels.
3. Add Value Before Raising Rates
4. Roll out new features (threat hunting, compliance reporting) first.
5. Show clients tangible ROI, then announce the modest price bump.
6. Quarterly Business Reviews
7. Present performance metrics, security findings, and upcoming improvements.
8. Use these sessions to reset expectations and justify rate changes.
9. Data-Driven Modeling
10. Build a simple spreadsheet or use a pricing calculator.
11. Simulate changes in user count, device volume, and add-on uptake.
12. Forecast revenue and margin impact before client conversations.
13. By making incremental updates instead of big annual hikes, you avoid sticker shock and keep clients engaged.

Key Cost Drivers You Can’t Ignore
Understanding what drives your costs is essential for setting profitable rates:
Client Size & Scope
More endpoints and users mean more monitoring, patching, and support hours.

Industries like healthcare or finance demand SOC, MDR, zero-trust, and detailed reporting—costing you tools and specialized personnel.

Remote vs. On-Site Support
Field service adds travel time, vehicle costs, and labor premiums. Remote-only models run lean but may frustrate clients used to “truck rolls.”

Tech Stack Licensing
Monitoring platforms, endpoint protection, backup solutions—decide whether to bundle licenses into your rate or pass them through.

Service Level Agreements (SLAs)
Faster response times and guaranteed uptimes require dedicated staff and tighter processes.

Map each cost driver to your pricing components. This way, you can justify each line item when clients ask, “Why is this so expensive?”

Common MSP Pricing Mistakes (and How to Avoid Them)

Undercutting Just to Win
You set a low anchor, then can’t raise rates later. Instead, compete on value and ROI.

Static Pricing
Tool and labor costs rise. If your rates don’t, your margins vanish.

Over-Bundling Services
Packing premium offerings into low tiers locks you out of upsell opportunities.

Ignoring Break-Even Analysis
If you don’t know your true cost per device or user, you’re flying blind.

Forgetting Overhead
Office space, training, staff benefits, 24/7 on-call rotations—they all matter.

Regularly audit your costs against your rates. A few minutes of analysis each quarter can save you thousands annually.

Why Cybersecurity Must Be a Core Line Item

In 2025, basic antivirus is table stakes. Clients expect:
VPNs for secure remote access

• Patch Management to close vulnerability windows
• Threat Monitoring for early breach detection
• Security Awareness Training to reduce human risk

If you offer these as optional extras, clients will shop around. Instead, embed essential security components into every tier. You’ll:

• Differentiate from MSPs that treat security as an afterthought.
• Protect your clients’ environments (and your reputation).
• Increase your average revenue per contract.

Clients will pay for peace of mind—especially when you explain how each security layer prevents costly breaches.

A Mini Case Study: Turning Pricing into Profit

A few years ago, I consulted with an MSP struggling to break 40% gross margin. They had a one-size-fits-all, per device model at $75/device. Here’s what we did:
Shifted to a Hybrid Model:

1. Introduced a base $150/user fee covering up to three devices.
2. Kept per device for specialized servers at $200/server.
3. Launched Tiered Packages:
4. Silver: included 24/7 help desk and patch management.
5. Gold: added SOC monitoring and quarterly security reviews.

Rolled Out Security Add-Ons:

1. White-label VPN at $15/user.
2. Security awareness training at $20/user.

Quarterly Business Reviews:

1. Presented threat assessments and performance stats.
2. Tied rate increases to new capabilities (threat hunting, compliance audits).

Result: Within six months, average gross margin climbed from 38% to 55%. Average revenue per client jumped by 18%, and client churn fell by 25%—because businesses appreciated the clarity and ongoing value.

*Next Steps: Putting This into Action
*

Audit Your Current Pricing

• Map every service, tool license, and labor cost.
• Calculate your true cost per user and per device.
• Choose Your Base Model
• Per user for remote-heavy clients.
• Per device for hardware-strict inventories.
• Define 2–3 Service Tiers
• Keep it simple: three levels drive the most upgrades.
• Clearly document what each tier includes.
• Design Your Add-Ons
• Focus on high-margin, high-value services: security, DR, training.
• Bundle them for discounts, but keep standalone rates.
• Build a Pricing Calculator
• Use a spreadsheet or free online tool.
• Experiment with different scenarios: more users, fewer devices, add-on uptake.
• Plan Quarterly Reviews
• Schedule meetings to share outcomes and propose enhancements.
• Use data to justify adjustments, not gut feelings.

By following this roadmap, you’ll develop a pricing strategy that adapts to 2025’s security demands, supports your growth, and protects your margins—no more guessing, just smart, data-driven decisions.
Ready to refine your MSP pricing? Start by mapping your costs today, then experiment with hybrid models and add-on bundles. Your 2025 profitability depends on it!
Visit: https://www.purevpn.com/white-label