No matter the economic outlook, businesses are always looking for ways to protect revenue, improve time-to-value, and reduce business costs. One of the most prevalent inefficiencies when it comes to managing licensees is the lack of onboarding processes. This causes disconnects between teams and organizations that can impact ongoing revenue streams. Implementing a licensee onboarding process with best practices, such as reporting and payment discipline, is encouraged.

To draw a parallel, the software industry is heavily focused on establishing customer success programs to help improve customer experience and to maximize customer lifetime value. In a similar way, our concept of licensee onboarding will help ensure that licensees are empowered to better understand their contractual and reporting requirements. By doing so, the ability to mitigate risk early on increases and the long-term partnership between licensor and licensee is strengthened.  

Understand contractual obligations 

All too often, we work with licensees who do not understand their contractual obligations or understand the language within their contracts. To the licensor, the contract is second nature. To the licensee, not so much. As a result, most licensors don’t think about reviewing contract terms and conditions in detail with their licensees. Consequently, a disconnect between the two parties can occur, and often does with detrimental impacts on businesses.    

Through licensee onboarding, licensors can educate licensees before their first reporting period — aligning expectations and ensuring licensors spend less time following up with licensees on non-critical issues. This will ultimately also increase the ongoing revenue stream for the licensor if the licensee is aware of their ongoing contractual and reporting obligations.

However, even if there is not a licensee onboarding program provided, licensees should do their due diligence and have their legal teams review the contract to ensure compliance with contractual terms to mitigate unexpected material future monetary and legal liabilities.  

Licensee onboarding is beneficial for licensors as well  

Through a well-designed licensee onboarding process, the licensor can gather basic information about a licensee, and identify a baseline for a risk profile of a licensee for future compliance and enforcement monitoring purposes.

By assessing licensee risk early on, licensors can better understand their licensees and their specific business needs as well as challenges to minimize non-compliance risk areas with valuable data points earlier in the process. Ultimately, integrating licensee onboarding into the process will strengthen the long-term relationship between the licensor and licensee.  

Ready to learn more?  

Improve your current royalty audit process and maximize ROI with a licensee onboarding process customized to your needs. Reach out to Connor to learn more about our proven licensee onboarding strategies, or if you wish to inquire more about our royalty auditing services at royalty@connor-consulting.com. 

‍