How to standardize a channel partner agreement

Channel partner agreements can quickly scale to be a major revenue source. Can standardization make them easier to manage?

This deep dive looks at what a channel partner agreement is, who it affects, and why and how businesses will often choose to standardize them. 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? | Why standardize channel partnership agreements? | How to standardize channel partnership 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 this generates.

Channel partner agreements are extremely common in technology and SaaS in particular. Many businesses derive a significant portion of their revenue from partnerships like the Salesforce AppExchange, the Slack app directory, or review sites like Capterra and G2. The purpose of these agreements is to 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 stakeholders across the business:

  • Legal counsel. There’s typically asymmetry in channel partner agreements, and the obligations they create – both in terms of revenue and data use – can have long-lasting effects. For these reasons, the in-house legal team will usually own and manage channel partner agreements.

  • Finance. The commercial terms set out in channel partner agreements can have a big impact on financials and forecasting, so the finance and revenue operations teams will want to be in the loop when it comes to headline terms.

  • Sales. Channel partner agreements might involve various sales roles – from partnerships managers who look after channel partner relationships, to sales operations who may need to feed in, to the individual salespeople who take forward the leads that arrive through the channel.

  • 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, who in SaaS companies and marketplaces is often still the CEO.

If the content and process behind the channel partner agreement are inconsistent, the difficulties of managing those channels, and recognizing the revenue they generate, can compound and become far too complex

Why standardize channel partner agreements?

Channel partner agreements are the foundation for a revenue share that can have a huge commercial impact, and last for many years. They’re also a scalable revenue source, so for lots of marketplaces and SaaS companies, managing channel partners is an ongoing and ever-growing project. 

If the content and process behind the channel partner agreement are inconsistent, the difficulties of managing those channels, and recognizing the revenue they generate, can compound. If a company wants to quickly and repeatedly add channel partners, it will benefit from a standardized contract that can be rolled out at scale.

By using a no-code template editor to standardize channel partner agreements, partnerships managers can be sure that the contracts they send out will always be based on the latest terms as defined by legal. This keeps significant variation between channel partners to a minimum and reduces the legal risk created by regularly departing from agreed terms. It should also ultimately lead to a better experience for parties on both sides – and as faster signing.

Standardize and scale your channel partner agreements with Juro’s no-code template editor.

How to standardize channel partner agreements

Start with why

Remember why you want to secure channel partners in the first place; this is supposed to be a mutually beneficial commercial relationship that drives revenue for both sides. Approach the process as partners. Setting out with an adversarial mindset is likely to lead to worse outcomes for all involved. 

Create your perfect template

If you have a history of channel partner agreements before you attempted to standardize them, look at the data for those contracts. Which versions attracted the least negotiation? And which clauses tended to attract pushback? Can you soften any unimportant terms ahead of time to increase the likelihood of signature? Optimize your template for signing, and you’ll sign partnerships faster.

By using a no-code template editor to standardize channel partner agreements, partnerships managers can be sure that the contracts they send out will always be based on the latest terms as defined by legal

Design it

‘Legal design’ has moved beyond buzzword and into practice, thanks to pioneers like Margaret Hagan and Helena Haapio. User-friendly design can have a big impact on how likely counterparties are to sign. Use linking, layering and tables to foreground the most important terms, remove dense legalese in favour of plain language, and bring your company’s visual brand into the document. For great examples, check out Monzo’s terms and conditions or Juro’s privacy notice.

Codify deviations

You might need fallback positions for channel partner agreements. For example, if an agreement is above a certain value, there might be terms you’d be happy to change, whereas for a low-value contract you’d stand firm. Standardize your agreements with a contract collaboration platform that allows you to bake fallback positions into the template using conditional logic. Partnerships managers can then negotiate themselves, without stepping outside the parameters set by the legal team.

Automate channel partner agreements

If you’ve standardized your channel partner agreement template as already described, then you can empower commercial colleagues to self-serve – with legal only needing to approve them before they’re sent for signature. For more information, take a look at our deep dive on how to automate a channel partner agreement.

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

Useful features for standardizing channel partner agreements

If you decide to standardize your channel partner agreements with an automated workflow, the following features would be useful:

  • Locked templates enable legal teams to define the terms of channel partner agreements at template level and prevent partnership teams from deviating, which minimizes 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 data 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 – your alternative clauses and fallback positions – can be baked into your SaaS agreement template using conditional logic.

  • 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 Slack integration, partnership teams can receive 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 enabled with these features and integrations, it should put an end to the friction between teams caused by deviations from agreed terms. 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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