Contracts — Good for Companies, Bad for Customers?

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We are receiving inquiries from frustrated customers who would like to switch applicant tracking vendors but would have to buy out the months they have left on their current contracts and face the possibility of losing all of their applicant data. Their dissatisfaction usually comes from the lack of customer service and support they were promised rather than the functionality of the system. One small company is actually entering into litigation to cancel their current contract and have the stiff penalty for canceling waived.

My guess is the software service companies who lock you into long term contracts are interested in keeping your business while they try to keep up with the ever-changing, enhanced technology and outstanding service of their competitors. If they don’t live up to the expectations they promised—no worries—they charge you a penalty for leaving and get paid anyway! Whatever their logic, you’re stuck with an inferior product or service. Whatever happened to integrity, reputation, and genuine concern for the customer and solving their problems? Call me old fashion, but I hate the thought that the ease of technology has replaced a solid work ethic and reliability.

As a National Account Manager, I’m proud of the customer service ApplicantStack promises and delivers without the need to lock our customers into a contract in return for their loyalty. In fact, we are so confident in our ability to promptly respond to customer needs and fix a problem when something goes wrong, we don’t have any contract at all. You can actually subscribe to our service on a monthly basis, with no penalty for cancellation. If we don’t deliver or can no longer satisfy your needs, you can not only cancel but easily download all of your data and take it with you at any time. Now that’s confidence!

Customers evaluating web-based applicant tracking services should be weary of signing a “long-term” contract. In this unsettled economy, how can companies predict what their revenue or needs will be one or two years down the road. If you’re being offered a discount or some other perks for committing long term, I suggest you know what happens to the contract when the vendor doesn’t hold up their side of the agreement or if your company downsizes or is bought by a bigger company that has their own service. Stiff penalties, expensive legal battles and the challenge of starting all over, will give you little flexibility and will have a negative impact on your business.

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