Business referral contract for a SaaS company: essential clauses to consider

Using a business provider is an effective strategy for a SaaS company who wants to accelerate sales without deploying an additional internal sales force. To succeed in this collaboration, it is essential to structure the business provider contract precisely in order to avoid any misunderstanding. Here are the key elements that must be included in this contract.

Business provider's commission: clearly define remuneration

The commission is the very heart of the business provider contract. A clear and precise definition makes it possible to avoid any subsequent conflicts:

• Commission amount: Define an exact percentage or an explicit remuneration schedule (for example, a percentage of the turnover generated by the referred customer).
• Basis of calculation: Specify precisely on what basis the commission will be calculated (first year of subscription, total of the initial contract signed, possible renewals). It is best for the SaaS company to limit it to the first year of subscription.
• Payment deadline: Clearly indicate when and how the commission will be paid (monthly, quarterly, or annually).

Territory of the business provider: clearly delineate the area of intervention

Definition of a territory is essential to avoid disputes:

• Precisely define the geographical area of intervention of the business provider (countries, specific regions, target markets).
• Clearly indicate whether or not this area is exclusive for the business provider. Exclusivities are generally to be avoided in this context - at a minimum, it is advisable to provide that exclusivity does not apply to direct sales by the SaaS company.
• Specify the conditions under which exclusivity can be revised or withdrawn.

Methods of presenting prospects by the business provider: framing the process

It is crucial to describe exactly how the business provider should proceed to present prospects:

• Presentation process: Require formal written or email notification from each new lead.
• Prospect acceptance criteria: Specify the specific conditions under which a presented lead will be considered valid and eligible for commission (for example, organization of an appointment or a demonstration). The presentation may be refused if you are already talking to the prospect or if he is a member of the group of one of your current customers.
• Validity period of the introduction : Indicate a reasonable period of time during which the businessprovider will be able to claim a commission on a presented prospect, generally 12 months.

Monitoring of the activities of the provider: transparency and control

For a peaceful and effective collaboration, set up a transparent monitoring mechanism:

• Regular activity report: Ask the business provider to provide regularly (monthly or quarterly) a detailed report of the prospects contacted and the progress of each case. The objective is also to synchronize prospecting actions.
• Regular meeting between the parties: Schedule regular meetings to discuss current issues, assess the results obtained and possibly adapt the strategy.
• Monitoring tools: Set up shared tools (CRM, tracking files, etc.) in order to guarantee maximum transparency in exchanges and in commercial follow-up.

Other useful clauses to include

In addition to the above elements, a few additional clauses can strengthen the contractual framework:

• Confidentiality clause: Obligation for the provider not to disclose any confidential information.
• Non-competition clause: Limit the business provider in his ability to work with direct competitors during the term of the contract, or even a limited period after the end of the contract.
• Termination conditions: Clearly define the terms and conditions for terminating the contract (length of notice, specific cases allowing early termination).
• Limitation of liability clause: To be limited to a reasonable amount.

Conclusion

A clear and precise business provider contract will avoid disputes between the business referrer and the SaaS company. They are generally based on the right to a commission, the provider considering a lead brought while the SaaS company considers that the business provider's action was not significant. By rigorously structuring the commission, the territory of intervention, the methods of presenting prospects and the monitoring of activities, this risk is reduced.

Business input is a very useful tool to accelerate your business, so it should not be overlooked, but just take a few precautions.

I can assist you in drafting business provider contracts that are perfectly adapted to a SaaS business.

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