
Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
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Join companies like Zoom, DocuSign, and Twilio using our systematic pricing approach to increase revenue by 12-40% year-over-year.
In today's unpredictable business landscape, disaster recovery and business continuity services have shifted from luxury to necessity. Yet for managed service providers (MSPs) and IT consultancies, determining the right pricing model for these recurring services remains challenging. Striking the balance between profitability and client value proposition is crucial for sustainable business growth.
This guide explores effective strategies to price your recurring disaster recovery and business continuity offerings, helping you develop a pricing structure that creates predictable revenue while delivering exceptional value to your clients.
Before establishing pricing, it's essential to recognize why clients invest in disaster recovery services:
When clients purchase disaster recovery services on a recurring basis, they're not just buying technology—they're investing in business assurance and peace of mind.
The tiered model offers different service levels at distinct price points, allowing clients to select coverage matching their needs and budget.
Example structure:
This model allows clients to start with lower-priced options and upgrade as their needs evolve. According to a CompTIA survey, 71% of MSPs find tiered pricing effective for disaster recovery services.
This approach bases fees on quantifiable metrics such as:
For example, you might charge a base rate of $X per month for core service delivery, plus $Y per protected TB and $Z per covered server.
This model's transparency allows clients to clearly understand cost drivers and provides natural price scaling as client environments grow.
Rather than pricing based solely on resources consumed, the value-based model aligns fees with the business impact of potential downtime.
Steps to implement:
For example, if a client determines downtime costs them $10,000 per hour, a service guaranteeing restoration within four hours might justify a monthly recurring resilience fee of several thousand dollars.
When determining your pricing structure, consider these critical variables:
Recovery Time Objective (RTO) and Recovery Point Objective (RPO) significantly impact service delivery costs:
Generally, as RTO/RPO requirements become more stringent, pricing should increase proportionally.
Your SLAs define performance guarantees and accountability measures. Consider including:
More stringent SLAs require additional resources and create greater provider risk, warranting premium pricing.
Regular testing is essential for disaster recovery efficacy. Your pricing should reflect:
Many providers structure their recovery service pricing to include a specific number of tests annually, with additional tests available for supplemental fees.
Follow these steps to create an effective pricing structure:
Begin by thoroughly understanding your service delivery costs:
Add appropriate margins to ensure profitability while remaining competitive.
Different client segments have varying needs and price sensitivities:
Tailor your recurring resilience fees to address the specific requirements of each segment.
Research competitor offerings considering:
While you shouldn't simply match competitor prices, understanding market rates helps position your services appropriately.
When presenting pricing, emphasize ROI rather than focusing solely on cost:
Clients invest in outcomes, not technologies or activities.
Once you've determined your pricing approach, consider these implementation best practices:
Consider which elements to include in your base offering versus positioning as add-ons:
Bundling creates value perception while add-ons allow customization and revenue optimization.
Key contractual elements include:
Longer contracts provide revenue stability but may require more competitive pricing.
Establish regular review processes to:
Most providers review and adjust disaster recovery pricing annually.
A mid-sized MSP implemented a tiered subscription model for their disaster recovery services with the following structure:
Essential Protection:
Enhanced Protection:
Critical Protection:
The result: 78% of clients selected the mid-tier option, creating predictable revenue while providing superior margins compared to their previous time-and-materials approach to disaster recovery.
Effective pricing for recurring disaster recovery and business continuity services requires balancing several factors:
By developing a transparent, value-based pricing model, you create a win-win scenario: clients receive protection aligned with their requirements, while your business builds a predictable, profitable revenue stream.
Remember that disaster recovery services aren't merely technical offerings—they're business assurance programs that protect your clients' most valuable assets. When your pricing reflects this reality, both your clients and your business benefit.
Join companies like Zoom, DocuSign, and Twilio using our systematic pricing approach to increase revenue by 12-40% year-over-year.