Managed IT services given away come with a subconscious onus that the service delivered mustn’t be worth anything; ergo, its lack of charge. As crazy as that sounds, people have a tendency not to value that which they don’t pay for. You wouldn’t think this would be the case in a modern world where the economy is in a state of negativity unmatched since the 30s, but you’ve got to take human nature into account.
Regardless of depression or times of plenty, people are people. This means that if there’s a high price attached to something, some portion of the mind will say, “Ah, why is that so much? There must be some hidden value!” What’s more, there’s a psychological onus to find value. You’ve probably done this yourself. Certainly, to some degree, it depends on whether you’re a pessimist or an optimist. Those who tend to see the glass as half empty will be more critical of a given set of services. Those who see it as half full will try and find some benefit. If you’ve ever paid $10 for a sandwich in a coffee shop, and then caught yourself doing it again, you know exactly how true this is. You buy that turkey sandwich and it’s okay, but it’s certainly nothing to write home about. Yet it was convenient, it was there, and it did the trick. Sure, it was about $3, $4 too much, but it was what you needed when you needed it, and maybe it was tastier than the same sandwich out of the bargain bin at the grocery store. Didn’t the cheese have a little extra zest? Wasn’t it neat that they had a packet of salad dressing instead of mayonnaise? Maybe you’ll get that sandwich again.
Believe it or not, this same kind of thinking— magnified of course— applies to managed IT services. Sometimes it’s not what you sell, but how you sell it.
So, what does this mean to you, ultimately? It may mean that raising your prices will increase your business’ profits. Sales will likely increase, because they begin to take on greater assumed value. People assume that there must be a reason why you’re charging what you are. Additionally, when you do get new clients, you don’t need as many as before in order to make your bottom line. You’re able to do less work and make more simply through a price hike.
It sounds strange— that’s understandable. It should sound strange. This reality’s counter-intuitive to logic. Still, the experts agree: sometimes raising your prices will actually act as a means of increasing your sales— at least, Forbes.com seems to thinks so.
Here’s the thing to keep in mind: if you do increase the cost of your services, you have to deliver as flawlessly as possible. When a client’s paying a higher rate, they’re likely to cast a more critical eye toward your provisions. They’re going to ask questions and act displeased when, in reality, they’re dandy. At least, you can expect some will. But here’s the thing: clients, in a position to approve an increased rate for IT services, are generally not in a position to parse the technicalities behind said services. Some of these people can’t even copy a hard-disk from one computer to another. What’s it to them if you charge $100 for the service? It does take several hours in some cases. Granted, actual work involved is 10-20 minutes in set up and double-checking. But the computer’s got to transfer the files, which certainly takes time, it must be done safely, etc. While you may feel charging $100 for a service like that is exploitative, from a very realistic basis it isn’t. You’ve got a business to run. You know what that means? You’re not making enough money; this remains true almost regardless of success.
By increasing managed IT services costs, you can:
• Increase sales
• Expand client-base
• Begin experiencing actionable, expansive profit
The only real condition is that you be sure to dot your i’s and cross your t’s when meting out IT solutions. But you’re in IT— isn’t that what you’ve always been doing to begin with?