What is a referral agreement?
A referral agreement is a formal contract between two businesses that outlines the terms and conditions of a referral program. It sets the stage for one party to recommend the products or services of the other party to potential customers, and receive benefits for these referrals. This legal document ensures that the terms of the program are clear, fair, and mutually beneficial.
Think of it like this: you’re a fintech company and you’ve brought on a popular financial influencer as a referral partner. With a referral agreement, they would share and talk about your solution with their social audience and during events, potentially bringing you new customers. In return, they’d earn commission for each successful sale, as outlined in your referral agreement.
Always draft this agreement with your legal team. However, a referral agreement generally covers these items:
- The roles and responsibilities of both parties
- How the referrer will be compensated
- Any conditions that must be met for compensation
- Any guidelines for content strategy and production
- Attribution and tracking details
- How disputes will be resolved
- How the agreement can be terminated
A good referral agreement is more than just a contract. It sets the foundation for a long-term, successful partnership that can lead to increased brand exposure and revenue. It’s a tool for growth, and a testament to the power of collaboration and mutual benefit in the world of partnerships.