How to digitize a channel partner agreement

Can digitizing channel partner agreements help you close more of them faster, boosting your business growth?

This deep dive looks at what a channel partner agreement is, who it affects and why companies choose to take this key growth lever online. Use the navigation below to find out more, or explore our deep dives on other contracts, like NDAs and SaaS agreements.

What’s a channel partner agreement? | Who do they affect? | What’s the manual process? | How to digitize your channel partner agreements | Useful features | Handy integrations | Learn more

What’s a channel partner agreement?

In a channel partner agreement, two businesses set out and agree the terms of their commercial partnership. An example of a channel partner agreement is the contract between two SaaS companies, whereby one party agrees to include the other in its marketplace or to provide referral traffic in exchange for a percentage of any revenue that this generates.

Many businesses derive a significant portion of their revenue from partnerships, like the Salesforce AppExchange, the Slack app directory or the HubSpot marketplace. These arrangements are governed by channel partner agreements, which codify the revenue relationship between the two parties.

Who do channel partner agreements affect?

Channel partner agreements can be crucial to a company’s revenue and growth. Because of this, they can affect lots of different people across the business:

  • Legal counsel. The obligations that channel partner agreements create, in terms of revenue but also data use, can have long-lasting impacts. Because of this, the in-house legal team will usually own and manage channel partner agreements.

  • Sales. Channel partnership agreements might concern various sales roles. There may be a partnerships manager who looks after channel partner relationships, sales operations who need to contribute to the process and individual salespeople who take forward the leads that arrive through the channel.

  • Finance. The finance and revenue operations teams will want to be in the loop when it comes to headline terms. CFOs often turn to contract collaboration software because a manual workflow makes forecasting difficult.

  • Marketing. If a channel partnership is a key distribution channel for the business, the marketing team will want sight of their obligations and responsibilities when it comes to promotion, revenue sharing, and so on.

The channel partner is also a key stakeholder, of course, as is the company’s authorized signatory – which in SaaS companies and marketplaces is often still the CEO.

Want to digitize your partner agreements with Juro? Get in touch.

What’s the manual process for channel partner agreements?

The exact process in place for channel partner agreements probably depends on the value of the partnership. A partner agreement between two companies that drives hundreds of millions of dollars in annual revenue will be heavily negotiated, possibly involving outside counsel. If the partner agreement is lower in value – as is more common – then its complexity and level of negotiation will be lower too.

In these lower-value cases, a partnerships manager wanting to sign up a new channel partner will likely contact legal for a template, or look in a shared drive for one from a previous deal. They’ll take this Word document, change the key details – like counterparty name, effective date and commercials – and then email it to the potential partner.

Pain points can compound over time, which is why innovative companies are increasingly digitizing their channel partner agreements to make the process frictionless

The partner might negotiate by making tracked changes in Word or by suggesting edits over email. This process of back and forth continues until eventually both parties agree, and the partnerships manager sends the document back to legal for sign-off. At this point it often transpires that the partnerships manager was working from an old template, and the tracked changes-email cycle repeats.

One everyone’s happy, the document is converted to PDF. The contract parties sign a hard copy or use an eSignature provider, and someone emails a copy of the fully signed contract to stakeholders and saves it to a local or shared drive.

This workflow is made more complicated by contracts existing in parallel in CRM, such as Salesforce. Channel partner agreements will need to be synchronized between the two to enable forecasting, but this can mean manually entering data in Salesforce.

Why it’s painful to manage channel partner agreements manually

  • Version control risk: “The partnerships team is still using last year’s template without the updated GDPR wording.”

  • Lack of visibility: “Have they viewed the contract? Why did they make that change?”

  • Data integrity: “The revenue percentage in Salesforce is different to the one on the contract. Which is right? How can I forecast?”

  • Lost contract data: “The terms in this renewal seem aggressive but I can’t find the ones from two years ago?”

  • Missed renewal deadlines: “How am I supposed to know when our channel partner agreements auto-renew?”

These pain points can compound over time – even more so if the contracts are high-value and there’s significant revenue at stake. For this reason, innovative companies are increasingly digitizing their channel partner agreements to make the process frictionless.

Digitizing channel partner agreements with Juro will save you time and money – want to try it?

How to digitize your channel partner agreements

If you decide to use a contract collaboration platform to digitize your channel partner agreements, the automated contract lifecycle usually looks like this:

Create templates for self-serve

Problems with version control introduce significant risk. Avoid this by creating a master template for channel partner agreements in your contract collaboration platform. Your contract template should represent the most up-to-date thinking from your legal team and perhaps external counsel. 

If certain terms in the agreement are negotiable (based on, for example, contract value), you can use metadata triggers to build conditional logic into the template. This allows you to bake your fallback positions into the document. Partnerships managers or salespeople can then self-serve on channel partner agreements from this template, choosing the right form of words for the partnership value or type – all without the legal team having to hunt down documents or reinvent the wheel each time.

Collaborate in-browser

Once you’ve created your channel partner agreements in the contract collaboration platform, you want to keep them there so you don’t lose your negotiation data or audit trail. With a digitized workflow, you can negotiate and make edits to the document in-browser. Look for a contracts platform that lets you distinguish between internal and external comments, so your internal reasoning for any changes can’t be seen by the counterparty.

If legal teams still need sign-off, they can use an approval workflow to make sure that self-served contracts still come to them for approval before they’re shared with the counterparty.

Check out the ‘Modern contract handbook’, in which experts explore every stage of the contract lifecycle.

Agree on any device

One of the obvious advantages of a digital workflow is that you don’t need to be in the same room to sign. If you’ve worked hard to create a dynamic digital document in a contract collaboration platform, then your counterparty can securely eSign anywhere, on any device. eSignature can also trigger the fully signed contract to be automatically sent as a PDF to each party, saving you the effort.

Get analytics

A digitized channel partner agreement workflow will give you data, usually in the form of a dashboard, to help you understand where the bottlenecks and friction points are in your process. If contracts are sitting with a particular team member for days at a time, slowing down deals, then analytics can help you to solve these problems quickly.

Manage renewals

Channel partner agreements often auto-renew. But a revenue share that seemed reasonable in year one might be unpalatable in year three. With a digital workflow, you can set reminders ahead of renewal deadlines, making sure that you have plenty of time to prepare for commercial conversations.

Useful features for digitizing channel partner agreements

If you decide to digitize your contract workflow to handle channel partner agreements, the following features would be useful:

  • Locked templates mean that legal teams can define the terms of channel partner agreements at template level and prevent partnership teams from deviating, minimizing risk and uncertainty.

  • Smartfields contain contract metadata, making sure key fields – like dates, values, names and addresses – are tracked and searchable. They should also live-sync with CRM in both directions to make sure information is always accurate.

  • Internal and external commenting enables you to negotiate in-browser, in real time, instead of jumping between systems and losing negotiation data.

  • Defined playbooks use conditional logic to bake in to your channel partner agreement alternative clauses and fallback positions.

  • Visual timelines allow approvers and signatories to scroll back through negotiated versions to keep track of changes and variations.

Handy integrations

  • Salesforce. As the dominant CRM and system of record for a majority of SaaS businesses, a frictionless integration with Salesforce is really useful when automating channel partner agreements. Integrations with other players like Pipedrive and HubSpot are useful too.

  • Slack. With a Slack integration, partnership teams can receive real-time notifications when changes are made to the contract or when it’s signed.

  • Companies House. The best contract automation solutions allow UK users to use the Companies House API, which makes sure that information like the company’s legal name or registered address is always accurate.

If your channel partner agreement workflow is supercharged with these features and integrations, it should put an end to the friction caused by manual processes and multiple systems. This will free you up to get back to what matters – finding more channel partners!

Is managing channel partner agreements a pain point for your business? Is your SaaS company or marketplace growing so fast that the contract process is out of control, with friction pre-signature and a lack of visibility post-signature?

If so, try Juro and see if you could benefit from a contract collaboration platform that enables businesses to agree and manage contracts all in one unified workspace.



Topics: Channel partner agreement

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