Why MSPs Need a Different Approach to Cybersecurity Pricing

In the world of Managed Service Providers (MSPs), cybersecurity is no longer an optional add-on—it’s an absolute necessity. However, many MSPs still struggle with one fundamental question: How do I price my security services? This challenge isn’t just about setting the right price—it’s about shifting the mindset from selling cybersecurity as a standalone product to integrating it as a core part of a comprehensive, value-driven service.

I recently discussed this topic in depth on the Beyond the Horizons Podcast, where we explored the complexities of cybersecurity pricing and how MSPs can transform their sales approach. Let’s dive into some key takeaways from that conversation and from the Selling Security Playbook to help MSPs navigate the cybersecurity pricing conundrum.

Pricing Cybersecurity: Why Many MSPs Get It Wrong

One of the biggest mistakes MSPs make is treating cybersecurity as just another tool in their portfolio. When security solutions are sold in a silo—separate from the rest of an MSP’s offerings—they become commoditized. This approach leads to price competition and ultimately diminishes the value of the service. Instead, MSPs should focus on positioning security as a fundamental layer within a broader managed services package.

A key issue I’ve seen is that MSPs often set their prices based on what their competitors are charging. This is a dangerous strategy. Without understanding the full scope of service delivery, cost structures, and security layers involved, you risk under-pricing and hurting your profitability. The right approach is to price based on value and risk mitigation – not just market rates.

Who Are You Selling To? Defining Your Ideal Client Profile

Before an MSP can determine the right pricing model, they need to answer a critical question: Who are we selling to? The way you price and package security services should vary depending on whether you are working with a traditional managed services customer or a co-managed IT services customer.

1. Traditional Managed Services Clients
   • These businesses typically have no internal IT administrator and rely entirely on an MSP for their security.
   • They require fully managed cybersecurity services bundled within a complete IT package.
   • Pricing should reflect the fact that the MSP assumes full responsibility for their cybersecurity risks.
2. Co-Managed IT Services Clients
   • These organizations have an internal IT team but need an MSP to augment their cybersecurity efforts.
   • Security services, like Managed Detection and Response (MDR), may be sold separately rather than bundled.
   • Pricing in this model is often based on per-service or per-user structures.

The Benefits of Bundling Security Services

MSPs that bundle security services into a standardized package see greater success than those that offer security à la carte. Why? Because bundling eliminates the need for customers to “opt-in” to security; they get it by default. It also allows MSPs to position themselves as cybersecurity leaders rather than just service providers.

For example, instead of selling MDR as a standalone service, it should be wrapped into an Advanced Security Program that includes:

• Endpoint Detection & Response (EDR)
• Network & Cloud Security
• Compliance Support
• Ongoing Security Awareness Training

Bundling creates a predictable revenue stream while also ensuring that clients receive comprehensive security protection without gaps.

Overcoming Pricing Objections

A common challenge MSPs face is customers pushing back on cybersecurity pricing. Business owners often don’t understand why cybersecurity costs what it does. Many expect top-tier security for bottom-dollar pricing. The key to overcoming these objections is education and justification.

1. Pre-Sales Cybersecurity Assessments
   • Conduct an initial security risk assessment to show clients where they are vulnerable.
   • Use real-world data to illustrate the potential costs of a breach compared to the cost of investing in proactive security measures.
2. Tie Cybersecurity to Business Outcomes
   • Instead of selling a tool, sell risk mitigation and business continuity.
   • Explain how security protects not just their data, but their reputation, compliance status, and operational uptime.
3. Position Price Increases as Necessary Enhancements
   • Cyber threats evolve, so should security programs.
   • MSPs should implement annual price increases to reflect ongoing investments in new security tools and expertise.

Conclusion: The Path Forward for MSPs

Selling cybersecurity isn’t about pushing a product, it’s about creating a security-first culture for your customers. The most successful MSPs don’t let their clients decide whether they “need” cybersecurity; they standardize security within every service package they offer.

By defining your ideal client profile, bundling security services, and articulating clear value propositions, you can avoid the pitfalls of commoditized security pricing and instead build a scalable, profitable security practice.

For more in-depth strategies on pricing and packaging cybersecurity services, be sure to check out the full discussion on the Beyond the Horizons Podcast and download the Selling Security Playbook. Let’s move beyond the pricing conundrum and start selling security the right way.

Stefanie Hammond is Head Sales and Marketing Nerd at N‑able. You can follow her on LinkedIn