You Scored the Partnership Contract! Now What?
Once the hard work of aligning stakeholders is complete, what now? What’s in that partnership contract, and how can you use them to develop future value?
After months of polling stakeholders, speaking to leadership, vetting potential partners and developing the final vision, you’ve finally done it.
The partnership contract is signed, sealed, and delivered.
You’d be shocked how often our experts at Firneo get this question. Developing partnerships is an exciting ride, no question. Inking that deal for your people can seem like the finish line, but the fact is it’s only the beginning. Now, all that theoretical value of the partnership needs to be realized, and it’s going to depend a great deal on the foundation you laid with your partnership contract.
The devil’s in the details, so let’s break down the fundamentals of partnership contracts, why they’re important, and how to leverage them to continue extracting value for your partnerships program.
What is a Partnership Contract?
A partnership contract—also known as a partnership agreement—is the actual black-and-white obligations each side of the partnership has to the other. The document informs stakeholders how to proceed, what each partner can expect, and how revenues will be shared.
It’s important to note that a partnership contract is not just a handshake and a high five. It’s a legal document that can have very serious consequences if either side violates the terms.
As a partnerships leader, you’re going to be responsible for making sure the elements of the contract make sense for your stakeholders, support intended values, align in goals and methodologies, and articulate a clear and actionable path to generate the desired revenue.
Every partnership contract should address the following:
There are many different kinds of strategic partnerships, such as brand partnerships, marketing partnerships, integrations partnerships, and development partnerships, and all of them are intended to unlock revenue from a particular market or segment.
However, generating revenue requires marketing, and that means one or both of you is going to be responsible for generating materials and informing consumers. It’s essential that the specific expectations and responsibilities are discussed and explicitly articulated in the partnership contract. There should be no question as to how this critical partnerships question will be resolved moving forward.
Similarly, co-selling obligations need to be clearly defined and understood by all stakeholders from the front office all the way to the loading dock. There have been countless examples of partnerships that have gone off the rails because a critical subset of stakeholders either had ambiguous or non-existent CTAs in the partnership contract that would have made all the difference.
Starbucks and Square had a legendary partnership meltdown when Starbucks leadership failed to recognize that the person at the register handling Square’s payment dongle was the critical stakeholder for converting sales.
Had this need for alignment been clearly understood and put in the agreement, Starbucks’ failure to act might have resulted in legal action to offset Square’s $71 million loss on the deal. Unfortunately, if it’s not in ink, it’s not on the table, and Square was left holding the bill.
Failure to Comply
This language might seem like a partnerships prenup, but it’s important to protect yourself no matter how in love your companies might be. Remember: we all dream big, but some partnerships ultimately fail, and when they do, the divorce needs to be as smooth and financially painless as possible.
A legal team will need to be engaged at every level of contract drafting, but never more so than when addressing failure to comply. Make sure this language is solid.
Using the Partnership You’ve Created
Once your partnership development work is complete, it’s going to be up to stakeholders and leadership to take your work and make it bear fruit. So your job is done, right?
Not a chance.
Partnerships leaders still have a lot of value to extract from two broad categories of partnerships development: partnership ecosystem marketing, and partner marketing to consumers.
Developing Partner Ecosystems
Once your partnership is off and running, you’re going to want to track and document the data of your success as it plays out so you can use it to develop your brand and increase interest in your partner ecosystem.
Success breeds success, and if you are investing in making your value as a partner known to industry players then you’re going to gradually reduce the challenges of attracting partners. Remember: every partner who comes looking for you is worth two partners you have to find yourself. They’ve saved you the time and resources you would have invested in them, and now you can spend them on someone else.
Partner Marketing for Consumers
We wish we could tell you that the Rembrant of a partnership contract you sketched up will be enough to make customers see the value in your brand, but alas, that’s often not the case. Your team may have to invest heavily on developing partnership narratives that explain value to new market segments who aren’t particularly familiar with your products and services.
It can be a lot of work, and sometimes it can be frustrating, but if the partnership contract is rooted in real value and shared marketplace goals, there is definitely a story worth telling.
Partnerships are Hard—Firneo is Making them Easier
It sucks to feel like you’re not reading the writing on the wall, but the truth? You’re not alone. We had to learn this stuff the hard way because nobody taught us any of the insider tips and core knowledge that is required to make it in partnerships.
At Firneo, we have decades of partnerships experience bringing the biggest industry players to the table to sign on the dotted line, and we’re giving it to you. Become a part of the next generation of partnerships leaders. Join Firneo.
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An Interview with Partnerships Expert Elisabeth Root: Making Space for Fierce Self-Awareness in Partnerships
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