IT Service Catalog: Price, Bundle, and Retire Services

Why Your Service Catalog Is Bleeding Money

Picture a desk where the list of services lives in a spreadsheet nobody updates. A tech spends two hours a week on backup restores for one client, and you charge that client a flat per-user fee that hasn't changed in three years. That service costs you more than it earns, and you'd never know unless you looked.

One owner who moved their whole client base from a la carte to bundles reports losing some clients, but making more money for less work, and finally having time to update the business. That's the prize. The first step is the inventory, and it starts now.

List Every Service You Deliver

Write down every service you offer or deliver, even if it's not on a price list. Include the ones you do because a client asked, the ones you inherited, and the ones that happen because a tech figured it out once and now it's expected.

One way to count is per site, server, user, and device, pulling counts from your RMM and M365. If you already bill that way, you're halfway there. If not, start with what you invoice for, then add what you deliver but don't charge for.

Once you have the list, you need the price and the cost for each. That's the next step.

Attach a Price and a Cost to Each Service

For each service, write down what you charge and what it costs to deliver. Cost means hours, tools, and support burden. A service that takes a tech an hour a week per client, plus a tool license, has a real cost. If you can't calculate that, you can't know if the service earns its keep.

Some owners report per-seat prices that vary widely, with some MSPs at $50 per seat struggling and others at $180 per seat hitting 28% EBITDA. That range isn't a benchmark you should target. What matters is that the number you charge has to cover what it costs to deliver, and that's a decision you make with your own data.

If you can't calculate per-service costs because delivery is shared or unclear, start simpler: list services without costs, and use a qualitative judgment of effort versus revenue. Mark the ones that feel heavy and the ones that feel light. It's not as precise, but it's better than guessing nothing.

Now you know which services are profitable and which aren't. That's the basis for the next decision.

Bundle What Clients Buy Together

Group the services that most clients buy together into packages with a single per-user or per-device price. Stop selling them individually. One MSP that keeps a single bundled offering with a fixed fee per user reports that clients cannot negotiate individual services away, reducing the back-and-forth on critical items like backup or patching.

Move existing clients to the bundle over a set date. Don't grandfather them into old pricing. Some clients will resist, and some will leave. That's part of the deal. If you can't move everyone at once, move them in phases or at renewal, but pick a date and start.

Your bundle price has to cover the cost of all the services in it. If it doesn't, you've just bundled your way into a loss. And make sure your billing system can show a single bundle line, because that's what makes the bundle feel simple to the client.

After bundling, you'll have services that don't fit. That's the next decision.

Retire the Services That Lose Money

For any service that costs more than it earns, retire it. If you can't retire it because clients need it, repackage it into a higher-priced bundle so the cost is covered. Do not keep a service just because clients ask for it if it's not profitable.

Saying no is part of the strategy. My view is that turning down poor-fit clients and charging premium prices wins you clients who had bad experiences elsewhere. The point isn't to be difficult. The point is that a service that loses money is a drag on everything else.

There's one exception I'd keep: a loss leader. If a service brings in other profitable work, you might keep it deliberately. But budget for it explicitly. Treat it as a marketing cost, not as a service that earns its keep. That way it's a choice, not an accident.

Make the Change on a Set Date

Pick a date and move all existing clients to the new bundles on that date.

This is where the approach can fail, so know the limits. Clients who refuse the bundle may leave. Contracts that lock pricing may force you to wait until renewal. And you need a way to communicate the new pricing clearly, or you'll spend weeks explaining it. If a client requires a service for compliance and no alternative exists, retiring it isn't an option; that's when you repackage it into a higher-priced bundle instead.

Some loss is expected. The goal is a catalog that earns its keep, not one that pleases everyone.

Build the service inventory first. Record each service’s price, delivery cost and owner, then use that list to plan the catalogue review.