How to Choose Your Next Market Pricing Solution: 5 Simple Best Practices
To enable the best comp practices, comp leaders—and their teams—have to choose the right technology solutions. I’ve witnessed a lot of selection processes: those that ended with very happy buyers and those that ended with buyers regretting their choices. There’s no way to be 100% certain when buying software, but the following best practices definitely increase your odds of picking the solution and partner that will be best for you and your team.
1. Look at More Than One Solution
This may seem obvious, but bringing variety into your evaluation is the best way to make sure you’re getting the best solution for your team. Even if you’re relatively satisfied with your current vendor, reviewing alternatives can open your eyes to capabilities you may not have even imagined.
Key Tip: As you look at different solutions, don’t be afraid to adjust your selection criteria based on what you see.
The best way to manage evaluating a lot of different options is to start with a long list. Get ideas from your peers across HR and compensation or use sites like G2, SHRM, or World at Work’s vendor listing to identify potential options. Remember, these sites include or are exclusively paid listings, so they're not necessarily comprehensive. (Since you’re here, you may as well include BetterComp as a potential partner!) Starting with your big list, do some research. In addition to other comp pros and review sites like those mentioned above, company websites will give you an initial idea of capabilities and fit. From here you can narrow down to the technologies you want to demo.
Through the demo process, it’s important to bring in additional members of your team. Anyone who will be working in the platform on a regular basis should at least have an opportunity to evaluate options and ask questions. This may take a couple meetings, but is well worth it when you make a selection and it comes time to implement (or stay with your current vendor).
2. If Possible, Avoid an RFP
An RFP can be a useful tool in evaluating vendors, but it’s not always the best option, especially for smaller decisions like market pricing software. RFP processes are time-consuming and cumbersome - not just for vendors, but for buyers, too. What’s more, when RFPs are led by procurement, they’re often structured in a way that makes evaluating competing solutions more difficult.
It’s not always possible to avoid an RFP, but it’s always worth exploring. A few ways I’ve seen people avoid RFPs for comp software include:
- If you already have a solution, you could argue that by not requesting new budget, there’s no need for a formal procurement process
- Explaining that there are only 2-3 major market pricing vendors in the space. If you have one and you’re moving away from it, there is only BetterComp and one other qualified provider out there!
- RFPs are typically for ERP type systems - hundreds of thousands if not millions of dollars. While you’re welcome to pay that much for your favorite market pricing solution, most don’t cost that much. 😉
- RFP processes take months - longer than it typically takes to implement a market pricing system like BetterComp. We’ve had customers go-live in less than 2 weeks - just reading the RFPs will take longer than that.
Key Tip: Even if you believe that avoiding an RFP isn’t possible, ask. If you don’t ask, the answer is alway no.
3. Secure Budget for Compensation Software
If you have an incumbent solution, you already have an idea of what your budget is. But, if this is your first foray into buying technology solutions to support your market pricing, you’ll want to at least get an idea of what you can spend.
Companies that are entirely new to compensation software may need some guidance. Prospective vendors can give you a rough idea of what the annual or monthly subscription cost may be for their technology to help provide guidance.
It’s important to not just look at price. Vendors offering solutions with a price that are drastically lower than other providers generally have price points that are not sustainable - they won’t be able to provide great service and support and rates that don’t let them hire great people.
4. Define Partner Selection Criteria
When you’re thinking about evaluation, you’ll want to include things like features and price, but also what criteria are important to you in a partner and how you want the relationship to look. Things like support model, product roadmap, and customer satisfaction should all be part of your evaluation.
Start by thinking about the status quo. What’s working well and what could stand to be improved? This is the time to dream big and imagine what compensation would look like in a perfect world. It’s not critical to name specific features you want, so much as it is to think about what you want your software to help you achieve. However, if you have software in place now, be sure to consider the “why” behind the features you consider important.
Key Tip: If you know you’re coming up on the end of a contract in the next year, begin documenting what’s working well and where your sticking points show up.
Once you’ve built out your dream list, begin ranking by importance. It’s unlikely that any one software or company will be able to give you everything on your list, but it’s also vital that your core needs are covered by any solution you choose.
But it’s important to choose only features you actually use. Remember, you’re buying a market pricing solution. Your main question should be “does it do market pricing well?” Too often, we’ve seen buyers ask about features they’re never going to use. As an example, merit modeling sometimes comes up in the course of an evaluation. Would it be nice to have a place you could model cost adjustments? Sure - but not if the core market pricing functionality was so poor that your data doesn’t work for merit modeling.
Check out this recent poll of nearly 100 comp professional on LinkedIn:
Should you be basing your decision on something you have a 3% chance of using?
5. Keep Your Eyes on the Prize
Evaluating technologies can be a big lift - particularly for comp teams who are already working at capacity. As you go through the process, remember why you’re performing the evaluation and keep focused on the outcome - a compensation technology partner that’s the optimal fit for your organization and team.