You’ve decided to offer compliance as a service, but how do you incorporate it into your MSP’s business plan?
As the importance of cybersecurity compliance increases, MSPs are trying to find the best way to build it into their business. But what’s the right pricing strategy? How do you set fair rates for this new service?
That’s why we’ve broken this topic down to four key elements to consider when developing pricing strategies for compliance.
To start, MSPs need to define the scope of the compliance services they plan to offer, including which standards and frameworks the MSP will support, the depth of the services (like risk assessments and policy development), and how frequently they monitor and audit clients. The pricing will increase depending on the level of service needed by each client.
The client and supported industries also need to be determined in advance to get an understanding of what your MSP could recommend. A small business with a handful of employees in retail is going to have a different need than a larger operation with more than 100 people on staff in a finance organization.
Larger businesses, for example, may have multiple locations and complex IT environments to support offices and employees working from home. With the need to protect a higher quantity of data, they will require more extensive service which will drive the price higher.
Industries with strict regulations, like healthcare, finance, and various government contracts, can require specific expertise for those regulations. That need may also increase the cost of service.
Because of all these factors, MSPs should consider a customizable approach to compliance as a service. Not all clients are going to be massive companies, so being able to meet clients at their budget level can go a long way in providing service, building trust, and keeping business moving forward.
Flexible pricing models, like tiered levels or à la carte services can meet a wide variety of needs that your clients may face.
Another aspect of compliance pricing that can change is the technology and tools needed for the MSP to provide the service. Your pricing should consider the cost of acquisition and implementation of the technology and licensing fees as part of the compliance process.
Your MSP needs to stay up-to-date on regulatory requirements, so training and certifications are vital. Ongoing training and certification of staff is important to include when considering the expenses needed to provide high-quality service.
Risk assessments are a fundamental part of compliance services, as they can identify security vulnerabilities and give MSPs insight into how to remediate those risks. An MSP’s time and effort in the risk assessment process, and the remediation, should be reflected in the pricing.
This process needs to be clear to the clients as well, as they need to know what exactly they are paying for and what their budget is being used for specifically. Providing this level of detail will ensure that clients are more trusting toward the MSP and understand what value the MSP is providing their business.
In addition to risk assessment, documentation is another area of extreme importance to compliance service. Regulatory standards require a certain level of documentation and maintenance of continued documentation to approve a business’s adherence to the standard. Pricing should reflect the documentation efforts around policies, procedures, audits, and evidence of compliance.
Also consider the potential audits and regulatory fines clients may receive for non-compliance, as those can have significant financial consequences for both clients and MSPs.
MSPs can also offer additional, value-added services to improve the security of clients further.
Some examples include security awareness training, incident response planning, penetration testing, and ongoing security monitoring. Pricing for these services needs to be appropriate to the level of value they provide your clients.
Reducing the risk of data breaches, improving incident response procedure, and even general staff training can go a long way to protect client data, which is why these types of services are sought out even once a client becomes compliant with their desired security framework.
There are many types of overall pricing models that MSPs can implement. Determine which is right for your MSP’s business and how you can best utilize compliance as a service in your operations.
Fixed Fee
A predetermined cost for compliance services based on the scope of the service. This approach is predictable for both parties, but may not be as flexible when unexpected changes or events occur that complicate the process.
Hourly Rate
A flexible model that charges based on the time needed to accomplish the work. It is a flexible pricing strategy, but clients may feel it is less transparent and could be concerned about overrun costs.
Monthly Retainer
A fixed monthly fee for ongoing services is both predictable and flexible. It allows both MSPs and clients to understand the cost impacts on a longer-term scale and clients can budget appropriately. It may not consistently reflect the value of services as clients may have more needs in one month, then a lot less in another.
Value-Based Pricing
In this model, pricing is based on the value of the services rendered. Value-based pricing considers how much the customer believes a product is worth. It’s important to consider all of the factors listed above as MSPs need to track and document all of the services and expenses necessary in providing compliance services for their clients. A value-based approach can be tricky to do, but will accurately reflect the work that goes into the MSP’s service.
Accurately pricing compliance service requires an MSP to carefully consider all of the costs associated with offering the service and determining the right type of service to drive revenue and provide a good service to clients.
By defining the scope, examining the risks and reporting, considering value-added services, and pricing structures, your MSP can find the right pricing approach to improve profitability while also guiding clients on their compliance journey with confidence and trust.
Want to learn more about the tools MSPs are using for their compliance services? Whether you are getting started on your compliance journey, or leveling up the tools in your inventory, ControlMap has you covered. See how it works for yourself by watching the demo here.
