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Referral agreement

Referral agreement

Noun

[ree-fur-ahl ah-gree-mint]

A referral agreement is a legal contract that defines a partnership between a service provider and a referral partner that earns commission on sales. The contract sets out the terms of a partnership wherein one party is referring qualified leads or customers to the other partner in exchange for rewards or compensation.

Referrals are an effective method of increasing lead acquisition and sales, and a referral partnership is mutually beneficial as one partner sees increased sales and the other earns a cut for their leads. These partnerships are governed by referral agreements to ensure each party is clear on the terms of the partnership, what will be done in the event of a dispute, and how the partnership can be terminated if desired.

Typical inclusions in a referral agreement include (but are not limited to) terms, audit rights, intellectual property, confidentiality, and dispute resolution.

Example: It took Lucy's lawyers a while to go through her referral agreement with Lookster, but once it was signed, she was excited to celebrate (and start earning commission on her leads).

More Partnership terms beginning with
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Referral partner

Referral partners send qualified leads for your team to close and earn a percentage of the revenue when a deal goes through. The audience of a referral partner is not as large as that of a marketing partner, but a referral partner typically know more about the people they are referring, often having a direct one-to-one relationship, meaning the leads they send tend to be highly qualified.

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Reseller program

Noun

[ree·seh·lr prow·gram]

A type of partnership program where channel partners fully manage the sales cycle from lead generation to closed/won business. Reseller programs are a way to reach a new customer base through indirect sales, with reseller partners selling to the end customer on the behalf of a SaaS company to earn commissions or revenue shares on those sales. Typically, they'll get higher rewards than any other type of partner to acknowledge their greater effort. Reseller programs take greater effort to set up, as comprehensive resources and training are needed to set partners up for success.

Example: Since reseller programs take the most level of training investment, they are typically reserved for the highest-quality partners, often those who have graduated from a referral program.

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