The Savannah Bananas sell out 60,000-seat stadiums at an average ticket price of $451.87, with VIP experiences reaching $10,302, in the middle of constant talk about recession and inflation. Most MSPs cannot command premium prices for seven reasons, and almost all of them are internal: fear of cheaper competitors, assuming clients will not pay more, attracting price buyers by not marketing, low confidence, discomfort around money, not knowing your own financials, and insufficient differentiation. What you can charge is determined far more by your decisions about who you serve and what you bring to market than by the economy.
This post was sent to me by Matt Scully, Senior Director of Channel Enablement with Kaseya, regarding the Savannah Bananas baseball team, a few weeks after we had the owner, Jesse Cole, speak at one of our events.
I can confirm this fact and also report that premium tickets are 20 times more expensive, since I just attended a game in Nashville, dropping over $7,000 for six tickets that were on the first-base line. And they played to a sold-out stadium of 60,000 seats.
How is this possible?
Right now, you hear a LOT about a recession, inflation, low wages. So how can the Savannah Bananas sell out stadiums with an average ticket price of $451.87 with box seats, offering a VIP experience that can reach $10,302, all over the US?
It’s a question worth pondering and a business worth at least a little bit of study. A good start would be to watch what they do, very intentionally, to deliver an experience that develops raving fans.
Meanwhile, many businesses struggle to command premium prices for a lot of reasons.
The 7 Reasons MSPs Cannot Command Premium Prices
- Immobilizing fear about cheaper competitors and industry norms.
- Insistence that they “won’t pay more.”
- Attracting customers who BUY on price, either by not marketing and therefore being forced to take whatever floats your way, or by fishing in swamps.
- Poor self-esteem and lack of confidence.
- Psychological issues around asking for money or obtaining wealth.
- Ignorance and stupidity about business financials and metrics.
- Insufficient differentiation, perceived or real.
One of the hardest truths to accept is that your ability to command premium prices has more to do with YOUR mindset and YOUR decisions than anything going on in the marketplace.
That’s not to say that competition and the economy don’t play a part. They do, and you should know what the “average” MSP is charging so you are informed.
Charging more is not a pricing change, it is a business change
Choosing to sell your services at a premium also requires changes to service delivery and results delivered. You can’t just slap a hefty sticker price on your services and expect everything to fall into place.
It will REQUIRE changes to where you fish for customers, how you sell, your messaging and, of course, service delivery.
You WILL get fee resistance. You will be pressured and bullied by prospects who insist your prices are “outrageous.” You will be anxious, at least initially, as you start to build your business, as it is painfully slow to grow in the beginning until you pick up speed.
But ultimately, what you can charge CAN be greatly, or drastically, improved by the strategic decisions you make about who your customer is and what service you are going to bring to market.
If you give this no real thought and your “strategy” is to look around and imitate what everyone else does, without giving any thought to how you could solve your clients’ problems faster, cheaper or better than anyone else, and how you are going to deliver differentiated value, of course you’ll struggle against cheapest price.
And if you desire the “superpower” of charging premium fees, you have to drop any notion that you’ll get there with “tricks” and “hacks,” or some clever marketing tagline, or you’re going to be very disappointed.
And if you do not want any of this, that is allowed
Let me add that I fully recognize that not everyone has the desire or the fortitude to put in the work to get to the top of the price pyramid in an effort to get really wealthy.
Most MSPs are running their business purely to avoid having a boss, perfectly satisfied with adequate income sufficient to pay the bills. They hoist the banner of accomplishment as long as they live in a good home with the bills paid. Even more settle for this while they secretly wish they had a lot more.
If you are at peace with that, then fine. Don’t let anyone tell you you’re a “failure” for making a good income and not gunning for the 1% club.
But if you have scaled back your expectations and dreams, downsized and surrendered your original ambitions of wealth to a lesser level of achievement because of one or more of the items listed above, you need to revisit this. Now.
Dust yourself off and pull up your damned socks. It is time to declare freedom from cheap customers and low margins.
If you want help making the decisions that let you charge what you are actually worth, who you serve, what you bring to market and how you sell it, that is what my MSP sales training is built for.
Frequently Asked Questions
Why do MSPs struggle to charge premium prices?
Seven reasons, and almost all of them are internal: immobilizing fear about cheaper competitors and industry norms, an insistence that clients “won’t pay more,” attracting price buyers by not marketing or by fishing in swamps, poor self-esteem and lack of confidence, psychological issues around asking for money, ignorance about business financials and metrics, and insufficient differentiation. Your ability to charge premium has more to do with your mindset and decisions than with the marketplace.
Can I just raise my prices?
No. Choosing to sell at a premium requires changes to service delivery and to the results you deliver. You cannot slap a hefty sticker price on your services and expect everything to fall into place. It requires changes to where you fish for customers, how you sell, your messaging and your service delivery. The price is the last thing that changes, not the first.
Will I get pushback if I charge more?
Yes, and you should expect it. You will get fee resistance. You will be pressured and bullied by prospects who insist your prices are outrageous. You will be anxious, at least initially, and growth is painfully slow in the beginning until you pick up speed. That is the cost of moving up the price pyramid, and it is why most providers never do it.
How do I know what to charge as an MSP?
Start by knowing what the average MSP is charging so you are informed, because competition and the economy do play a part. But do not let the average set your ceiling. What you can charge is determined far more by your strategic decisions about who your customer is and what service you bring to market than by what everyone else in your area happens to be doing.
Why do I keep attracting clients who only care about price?
Usually because of how you are acquiring them. If you are not marketing, you are forced to take whatever floats your way, and what floats your way is generally shopping on price. The other cause is fishing in swamps, meaning targeting the wrong pool of prospects entirely. Both problems are solved upstream of the sales conversation, not inside it.
Is there anything wrong with not wanting to charge premium prices?
No. Not everyone has the desire or the fortitude to get to the top of the price pyramid, and plenty of MSP owners run their business simply to avoid having a boss, perfectly content with an income that pays the bills. If you are genuinely at peace with that, no one should call you a failure. The problem is only when you have scaled back your ambitions out of fear, low confidence or lack of differentiation rather than genuine choice.
