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    How Not To

    (December 21, 2001) Dumb, Dumb, Dumb, Dumb. No, that's not the melody from the Untouchables (which goes dum da dum dum doh). It's the sound Brass Ring customers are making a they move to renew their contracts. The Washington Post surrogate, built on a data quality business, wants to bill its customers based on Resume volume. We've heard from a number of customers who are ready to bolt.

    Apparently, the only people who don't understand that resume volume is inversely correlated with hiring (volume is high when hiring is low) are people without Recruiting experience. The team at Brass Ring simply can't understand why customers are objecting to costs that escalate when they aren't using the system. The sales folks simply refer back to their policy manuals and say "Uh, sorry, it says right here that the cost is per resume." As if that mattered in a highly competitive marketplace.

    Let's unbundle the story a bit.

    In the beginning, BrassRing was a small Boston based firm with a brilliant idea. Using a distributed information factory (lots of part time data people all around the world), they made it possible for faxed resumes to be rapidly digitized, checked for quality and parsed into forms (for easier database access). At the time, this was a great breakthrough. It reduced the cost of processing a resume while increasing the quality of the data in the database.

    This simple notion, accompanied by a pricing model based on the resume as the unit of business, is at the heart of the technical culture at BrassRing. All pricing at the firm revolves around the number of resumes a given company processes. Unfortunately, the data quality model went out the window at approximately the same time as all resumes became digital (a couple of years ago). Ease of delivery makes the volume of inbound resumes grow without the slightest bit of control from a customer. In other words, BrassRing's pricing, conceived in an era where each resume did incur incremental cost, is completely outmoded and unrealistic.

    Even BrilliantPeople, the beleaguered web offering from CDI, is selling the notion that the web is overproducing resumes in proportion to the number of openings.

    BrassRing's pricing punishes customers who are successfully building their reputation as a desirable place to work. It taxes companies who build meaningful labor supply management processes. It ties expenditure to precisely the wrong variable. It creates the opportunity for the sorts of pricing techniques we've described elsewhere  (reduced acquisition costs coupled with out of control support costs leading to unbudgetable life cycle costs). While BrassRing claims to be in the enterprise software business, it really is just passing off a gimmick with this approach to pricing.

    We were pretty sure that things would get better. Ah, well.

    - John Sumser © TwoColorHat. All Rights Reserved.

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         © TwoColorHat.
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