The managed security services market is exploding, but marketplace competition is rising and hiring challenges abound. Offering managed cybersecurity services requires time and resources to plan the right approach. Learn how to thrive as you transition from products to value-added services.
Author: Paula Rhea, CISSP, product marketing manager, Netsurion.
This article will provide insights into how to grow your managed security service business by managing risk and understanding packaging and pricing choices, to ensure successful implementation of Software-as-a-Service (SaaS) security solutions.
Balance Risk and ROI
Navigating risk is becoming a crucial part of business operations and cybersecurity planning. When making an IT decision, service providers and customers must balance benefits like cost savings and efficiencies with potential challenges like supply chain risk and scalability. Protecting assets and sensitive data is paramount, regardless of your risk tolerance. Customers may erroneously believe that Managed Service Providers (MSPs) are responsible for all the risk, while MSPs view it as a shared responsibility. CISA’s Risk Considerations for Managed Service Provider Customers outlines these key questions:
Which tasks and responsibilities will the MSP take on?
Which will the Small-to-Medium-Sized Business (SMB) continue to execute?
Which tasks and responsibilities will be shared?
Identify Your Target Cybersecurity Customer
The first step to developing and growing your cybersecurity business is narrowing down your target customer. Ideally you will leverage your past customer successes and build for the future. Whether you attack a broad market segment or specialize in a compliance-specific vertical like financial services or healthcare, be sure your addressable market is large enough to offer long-term Return On Investment (ROI). Your optimal customer target will influence your packaging and pricing strategies.
Better Packaging Streamlines the Sales Process
End-customers tend to find a long list of a la carte cybersecurity products confusing and intimidating. Build the optimal bundle for your target customer, such as one comprehensive bundle with the ability to add and delete products as needed. Another packaging option is to offer good/better/best tiered bundles, often referred to as silver/gold/platinum levels. Some MSSPs find that offering three tiers results in customer selection of the lowest cybersecurity coverage to minimize start-up costs. As a trusted advisor, don’t shy away from customer conversations about the tradeoffs of better cybersecurity coverage that lowers cyber risk, albeit at a higher investment. Reward customers by showing the cost savings of purchasing more comprehensive cybersecurity outcomes and services. Whatever packaging you develop, be sure to offer add-on services such as Incident Response (IR), which enables you to grow and serve your customers as their businesses expand.
Pricing for Profitability
Some common approaches for cybersecurity services pricing are on a per user basis, per device, or hybrid basis that incorporates variables like data storage. While each model has merit, customers prefer transparent and predictable pricing. Confusing pricing or plans that “nickel and dime” customers create barriers to adoption. Balance any rising labor costs by driving down your service delivery cost. Continue to streamline workflows and automate back-office processes while maintaining customer-facing interactions that build engagement and loyalty. Market your organization and solutions based on value and not cost-based pricing. Don’t be afraid to forego prospect opportunities with unattractive margins that lack strategic fit.
Boost Operational Agility
A decision to transition from products to SaaS services is not without challenge and risk. Remain focused on your optimal customer target to enhance profitability, value differentiation, and customer loyalty. Start small and scale up after you’ve proven your capabilities and results. Over time, remember to regularly re-evaluate any packaging and pricing decisions to ensure continued fit with marketplace requirements and rising customer expectations. Netsurion’s Managed Threat Protection enables MSSPs to quickly adopt cybersecurity and 24/7 SOC expertise that reduces your startup risk and investment. View our packaging and pricing best practices learned across thousands of partners and customers.