Why Traditional Pricing Models Fall Short for MSSPs

Many MSSPs start with cost-plus or hourly billing, which works initially but quickly becomes unsustainable. Why?

• Doesn’t Reflect Value: Your value isn’t just the hours spent or the cost of tools; it’s the risk reduction, the peace of mind, and the prevention of costly breaches. Hourly pricing commoditizes your expertise.
• Unpredictable for Clients: Clients prefer predictable monthly costs for security, not fluctuating bills based on incidents or reactive work.
• Limits Scalability: As you grow, managing granular hourly billing for complex security services becomes an administrative nightmare.
• Discourages Proactive Work: If you only get paid for reacting, there’s a disincentive to invest in proactive measures that prevent issues, even though that’s where significant client value lies.

Moving towards value-based or packaged pricing models is essential for a sustainable and profitable MSSP business.

Foundation: Calculating Your Costs and Defining Your Value

Before you can price effectively, you must understand two things deeply:

1. Your Costs (Cost of Goods Sold - COGS): This includes direct labor (analyst time, onboarding), software licenses (SIEM, EDR, vulnerability scanners, threat intelligence feeds), hardware if applicable, cloud infrastructure costs, and third-party vendor fees. Calculate your fully burdened cost per user, per device, or per ‘security stack’ you deploy.
2. Your Client’s Value & Risk: What is a breach or significant security incident truly costing your target clients? (Downtime, data loss, regulatory fines, reputational damage, legal fees). Your service’s value is directly tied to mitigating these risks and enabling their business operations securely. This requires a thorough discovery process to understand their specific environment, industry regulations (like HIPAA, PCI DSS, CMMC), existing security posture, and tolerance for risk.

Your price should be a function of both your costs and the value you deliver in protecting their critical assets and operations. PricingLink (https://pricinglink.com) can help you structure your pricing to clearly reflect this value dichotomy.

Core MSSP Pricing Models for 2025

Several models are popular and effective for MSSPs:

• Per-User Pricing: Common for services tied to individual accounts (e.g., M365 security, identity monitoring, security awareness training). Simple and scales directly with client employee count. Example: $75 - $250+ per user per month depending on included services.
• Per-Device Pricing: Suitable for endpoint protection, server monitoring, or network device management. Can get complex with mixed environments (servers, workstations, mobile). Example: $50 - $150+ per endpoint per month.
• Per-Stack or Packaged Pricing (Recommended): Bundle specific services (MDR, SOC monitoring, vulnerability management, compliance reporting) into clearly defined packages. This is often tiered (e.g., Bronze, Silver, Gold). Provides predictability and communicates value clearly. Example: Tier 1 (Essentials) $500 - $2,500/month, Tier 2 (Advanced) $2,500 - $7,500/month, Tier 3 (Premium/Compliance) $7,500 - $20,000+/month. This is a great model to combine with per-user or per-device for scaling.
• Hybrid Models: Combine elements, like a base package price plus a per-user or per-device fee above a certain threshold. Offers flexibility.

The packaged pricing model is increasingly favored as it allows MSSPs to productize their offerings, making them easier to sell and scale. It also makes value communication much clearer.

Structuring Tiered Packages & Add-Ons

Implementing a tiered, packaged approach requires thoughtful design:

1. Define Service Bundles: Group logical sets of services that address different client needs or risk levels. (e.g., Tier 1: Basic Monitoring & Alerting; Tier 2: Proactive Threat Hunting & Vulnerability Management; Tier 3: Full MDR, Compliance Support, Incident Response Retainer).
2. Price Each Tier: Base the price on the combined value and cost of the services in that bundle, often using per-user or per-device scaling within the tier.
3. Identify Add-On Services: What services are valuable but not necessary for all clients? These are great candidates for optional add-ons (e.g., penetration testing, specific compliance audits, tabletop exercises, dedicated threat intelligence feeds).
4. Present Clearly: This is where many MSSPs falter. Presenting complex packages and add-ons in a clear, easy-to-understand format is crucial. Static PDFs or complex spreadsheets can be confusing.

This structured approach allows clients to choose the level of security that fits their budget and risk appetite, while also providing clear pathways for upselling as their needs evolve. Tools that help present these options interactively can significantly improve client understanding and conversion rates.

Presenting Your MSSP Pricing with Confidence

The way you present your pricing is almost as important as the price itself. Avoid simply listing services and prices. Instead:

• Lead with Value: Reiterate the client’s pain points and how your services solve them, focusing on risk reduction, uptime, and peace of mind before showing the price.
• Be Transparent: Clearly show what’s included in each tier or package.
• Offer Options: Presenting 2-3 clear options (your tiers) allows clients to feel in control and helps anchor their perception of value.
• Modern Presentation Matters: Ditch confusing spreadsheets and lengthy, static PDF proposals solely for pricing. Consider interactive methods where clients can select options and see the price update. This feels modern, is easier to digest, and can filter serious leads.

For businesses specifically looking to modernize just the interactive presentation of complex pricing options (tiers, add-ons, one-time fees vs. recurring), a specialized tool like PricingLink (https://pricinglink.com) is designed precisely for this. You can create shareable links (like `pricinglink.com/links/your-mssp-options`) that allow clients to configure their service package. It’s focused purely on the pricing selection experience.

It’s important to note that PricingLink does not handle full proposal generation, e-signatures, contracts, invoicing, or project management. For comprehensive proposal software that includes these features, you might look at tools like PandaDoc (https://www.pandadoc.com) or Proposify (https://www.proposify.com). However, if your primary goal is to simplify and modernize how clients interact with and select your security service pricing, PricingLink’s dedicated focus offers a powerful and affordable solution ($19.99/mo plan available).