Pricing negotiation mirrors the art of tightrope walking, deftly balancing cost and value aligned with your budget. Yet, in the realm of Applicant Tracking System (ATS) software, this negotiation takes on an added complexity, given the nuanced nature of technology and the diverse offerings from each provider.
The silver lining? Utilize this veil to your strategic advantage in securing a more favorable rate.
Why You Should Negotiate ATS Pricing
An ATS is a software tool designed for recruiters and employers to manage and optimize the entire recruitment process, from sourcing candidates to onboarding new hires. Some popular players in the market include Manatal, Simplicant, Teamtailor, Comeet, and Occupop.
Your first mistake would be not attempting to negotiate a better deal; remember, there’s nothing to lose if you fall. Software companies want your business; finding mutually beneficial terms is in their best interest. They won’t stop you from getting back on to find a way to get across the finish line.
Not to mention, software vendors have a knack for raising prices. As a result, starting with a fee already nearing the edge of your budget might push you overboard the following year.
How to Negotiate ATS Pricing
1 – Understand Cost vs Value
Only a foolish agent approaches a mission without a reasonable objective. Don’t walk into any situation that will cost you money without knowing what you’re willing to pay. But set your goal within reason.
This figure should be grounded in a thorough market analysis, considering the standard industry rates and the value their services bring to your business. Negotiations are not unlike a tug-o-war between the literal cost and the figurative value.
ATS software typically entails a pay-per-user fee or a fixed rate for unlimited usage within a company. A pay-per-user model often proves more practical for small businesses, while large corporations may find a fixed fee arrangement more financially lucrative.
2 – Clarify Window Shopping Through Providers
Salespeople are trained to put you on the spot. They will push past your hesitation with such strategic reasoning that it’ll feel like they’re doing you a favor. To counter this, set the tone from the outset by expressing that you’re in the preliminary stages, scouting for the best ATS products and pricing to bring back to your team for a collective decision. This places the responsibility on them to put their most competitive foot forward.
Meanwhile, you can confidently schedule a second meeting armed with knowledge about their proposal, your preferences, and your negotiation boundaries — what you’re willing to accept or walk away from.
A market analysis shouldn’t just be your negotiating tactic but the foundation for your conversation.
3 – Remind Them You Have Options
Every software company will have a list of reasons their product is the best. There may not be a wrong choice between several providers. Of course, the next step is deciding on the company’s dynamic that aligns most closely with your values and needs.
However, you should approach the situation as if viewing real estate. It’s always a buyer’s market in tech sales, so keep your poker face on. Flip the script on fear-based marketing and let them think they might lose you to other competitors.
It’s OK to admit their product has everything that fits your needs, but acknowledge so does another company. The only difference? Pricing. Say, “I’d love to work with your company, but another competitor has similar services at X rate.” If they have room to budge the rate, the opportunity to steal you should do the trick.
4 – Use an Exterior Factor to Leverage a Price Reduction
If you’re uncomfortable playing tough guy, position yourself as the messenger. Not every negotiation has to feel like you’re on opposing teams. Tell them how impressed you are with their product. Your HR team will benefit from implementing all its uses, and your boss will love it.
At least they would, except it’s over budget. The price took their ATS software off the table for consideration. However, they’re your first choice. You’re hoping to make the situation work if they’re willing to meet you halfway.
Use a figure of authority as the hurdle to overcome; this way, it positions yourself on their team. Salespeople are more willing to bat for you with management if they think you’re batting for them. They typically try to speak to owners or managers directly because there’s no buffer in front of the decision-maker.
5 – Offer to Sign Up Right Now for X Rate
If you don’t mind being forward, ask them to go all in or nothing. A fear tactic the most abrasive salespeople use is offering a deal only if you sign up within a limited period of time, either immediately, 24 hours, or a week.
They’re banking on you swiping a credit card for fear of missing the promotional bait. Beat them to the punch with one statement: “I’ll sign up right now if you agree to X rate.”
Let them know you’re not playing games. Some parties might say they can’t say yes without getting approved by their managers first, so oblige, but let them know you’re giving the same offer to another competitor.
Negotiating a favorable deal can feel uncomfortable, but getting stuck with an unfavorable rate is more unpleasant, especially when contracts are involved.
6 – If the Price is Fixed, Barter for Additional Services
Savvy negotiators understand that numbers aren’t the sole currency. If your preferred ATS provider hits a pricing roadblock, explore the possibility of augmenting the deal with additional complimentary services to enhance its overall value.
For instance, since software companies often present various tiers, you can negotiate a higher tier for the price of a lower tier or the inclusion of an additional feature. Creativity is key to getting bang for your buck.
Companies frequently roll out complimentary “add-on” promotions, so don’t hesitate to request a tailored offer that aligns with your needs.
7 – Ask Them to Reduce the Cost of Unnecessary Features
Scrutinize the package you’re eyeing for functions you won’t utilize. Shelfware refers to purchased but never-used software, encompassing any unused system function irrelevant to your business needs. For instance, software that transcribes video job applications when you only accept paper resumes or offers a fixed fee for up to five users when you only require four.
Request an outline of their ATS’ perks and redline what would essentially be ghost functions for your company. U.S. organizations waste $30 billion in shelfware, according to a new study by 1E. Refrain from falling for shiny toys, and maximize your cost with value.
8 – Give the Comfort of Upfront Payment in Exchange for a Reduced Price
Another industry secret is that software companies offer “discounts” for multi-year purchases or upfront payments. This allows the company to celebrate a secured year’s worth of business while cutting costs for the client.
The only caveat is to ensure you will be happy with the service, ideally by reaching out to other existing clients for feedback.
By understanding the balance between cost and value, being aware of your options and employing strategic negotiation tactics, you can secure an ATS pricing deal that aligns with your budget and meets your organizational needs. Remember, successful negotiation is about finding a mutually beneficial agreement. With the right approach, you can turn this complex task into a strategic victory for your company. Whether you are a small business or a large corporation, these negotiation strategies will empower you to make informed decisions and optimize your recruitment process with the ideal ATS pricing solution.