title: “Revenue Acceleration Addendum to Statement of Work” category: Feature & ROI Analysis status: Complete created: 2026-02-25 related:

• “Feature Research Exploration”
• “Prioritized ROI Matrix”
• “Wego Build Blueprint”
• “Supply Strategy — Financial Modeling”

← Section Index · Master Index

Revenue Acceleration Addendum to a Statement of Work

Executive Summary

[!IMPORTANT] 💡 Flashcard: The RAA Purpose A Revenue Acceleration Addendum ensures both parties are financially motivated to grow the product, balancing economic risks with shared rewards.

A Revenue Acceleration Addendum (RAA) formalizes how project services and incentives drive measurable revenue growth. It supplements the underlying SOW by defining clear growth targets (e.g. ARR/MRR, pipeline velocity, conversion rates, CAC reduction, etc.), assigning responsibilities for achieving them, and tying compensation to outcomes. When contracts lack such incentives, hidden inefficiencies and misaligned terms can “stall deals and erode confidence”【10†L93-L100】. By contrast, an RAA aligns supplier actions and client goals: it specifies objective KPIs with automatic financial remedies or bonuses for achievement【12†L96-L103】【8†L558-L562】. For example, a provider might earn milestone payments or revenue-share bonuses for hitting upsell or churn-reduction targets, with clawbacks if revenue goals roll back【36†L184-L189】. This report details the RAA’s scope, KPIs, metrics and formulas, roles, deliverables, reporting framework, and legal safeguards (IP, confidentiality, liability, etc.), concluding with a Markdown template and illustrative models. The enclosed mermaid flowchart and KPI relationship graph clarify processes and metric interdependencies, while a metrics dashboard mockup and payment-model comparison table give practical context. References are drawn from best-practice SOW guidance, SaaS metric sources, and legal templates.

Purpose and Scope

The Addendum supplements an existing SOW or Master Services Agreement by formally embedding revenue-focused objectives into the project scope【11†L68-L74】【12†L92-L100】. Its purpose is to motivate growth by balancing economic interests of both parties, creating rewards for exceeding targets and remedies for shortfalls【8†L558-L562】. Key points:

• Reference Original Agreement: It must cite the original SOW/Master Agreement by date/title to link the documents legally【12†L85-L90】. A “Conflict Precedence” clause can specify that the Addendum’s terms prevail over conflicting SOW terms【12†L100-L103】.
• Scope of Addendum: Defines new or adjusted deliverables, KPIs, timelines or reporting obligations focused on revenue outcomes【12†L92-L99】. This might include expanded marketing services, new data analyses, or additional customer success tasks, as long as they tie to revenue goals.
• Amendment Protocol: Per standard contract practice, any change to the RAA itself must be in writing and signed by authorized representatives【11†L68-L74】【52†L49-L53】. No verbal or implied modifications are valid【52†L28-L36】. This preserves contractual integrity while allowing flexibility.
• Term: The Addendum term may match the SOW term or be project-specific. It should specify start/end dates or conditions for renewal. Typically, it runs “in parallel” with the SOW and renews or terminates together.

Definitions (Key Metrics and Terms)

To avoid ambiguity, define all terms and KPIs precisely. Below are common revenue-acceleration terms, with sample definitions and formulas:

• ARR/MRR: Annual/Monthly Recurring Revenue. ARR is the sum of predictable recurring revenues over a year. It smooths out seasonal spikes【16†L260-L264】. Formulas:
  • MRR = total recurring revenue in a month.
  • ARR = MRR × 12【16†L260-L264】.
• Conversion Rate: The percentage of opportunities or leads that convert to customers. It “measures the percentage of potential customers who take a desired action”【46†L1622-L1630】. For example, Lead-to-Customer Conversion Rate = (New Customers / Qualified Leads) × 100【46†L1622-L1630】.
• Pipeline Velocity: How quickly deals close and generate revenue. It combines deal count, size, win rate, and cycle time【44†L229-L233】. Formula (per period):
  [ \text{Pipeline Velocity} = \frac{\text{Qualified Opportunities} \times \text{Average Deal Size} \times \text{Win Rate}}{\text{Sales Cycle Length (days)}} ]
  (This yields revenue per day or per period【44†L229-L233】.) Faster velocity implies quicker revenue realization.
• CAC (Customer Acquisition Cost): Average cost to acquire a customer. Sum all sales & marketing spend over a period and divide by new customers acquired【16†L319-L326】. It “tells you how much it costs…to acquire a single new customer”【16†L320-L326】.
• LTV (Customer Lifetime Value): Total revenue expected from a customer over their lifespan. A rough formula: (Average revenue per customer per period) ÷ (Churn rate)【18†L495-L502】. For example, if ARPU = $100/mo and monthly churn = 5%, then LTV ≈ $100/0.05 = $2,000【18†L495-L502】. The LTV:CAC ratio is a key efficiency metric (ideal ~3:1【18†L519-L527】).
• Churn Rate: Percentage of customers or revenue lost per period. Define whether using customer churn (customers lost) or revenue churn (MRR lost). Formula:
  • Customer Churn (%) = (Number of customers canceled ÷ Customers at period start)×100.
  • MRR Churn (%) = (MRR lost in period ÷ MRR at period start)×100【39†L29-L34】.
    For example, if 50 out of 1000 customers cancel, customer churn = 5%. A high churn rate erodes growth, so “churn reduction” often becomes a performance target.
• ARR/MRR Uplift: Percentage increase in ARR/MRR over a baseline or previous period. (E.g. “MRR to grow from $100K to $120K, a 20% uplift.”)
• Pipeline Contribution: % of deals/opportunities attributable to the provider’s efforts (may require tracking lead sources).
• Other Metrics: E.g., Win Rate, Lead Velocity Rate (MoM qualified leads growth), Average Sales Cycle, Upsell/Expansion Revenue, etc., as relevant. Each defined with formula if used.

All metric definitions and formulas should be appended to the Addendum (or agreed dashboard documentation) for clarity. Dashboard templates often include these (see Reporting section).

Objectives and KPIs

The RAA should list specific objectives and their associated KPIs, with numeric targets or ranges, measurement methods, and timing. Examples of objectives: increasing MRR by X%, improving lead-to-deal conversion to Y%, reducing CAC by Z%, cutting churn from A% to B%, or adding $X in upsell revenue.

• Revenue Targets: Set absolute or growth targets (e.g. “Generate $Y in new ARR by Q4” or “Achieve 10% ARR growth quarter-over-quarter”). Tying fees or bonuses to these targets aligns incentives.
• Performance KPIs: For each objective, specify the KPI and formula (see Definitions). For example, “MRR Growth: [(MRR_end – MRR_start) / MRR_start]×100.”
• Quality or Activity Metrics: If needed, include non-financial KPIs that drive revenue, such as number of marketing campaigns deployed, average deal size, pipeline conversion rates, or NPS improvement.
• Measurement Rules: Clarify what counts. E.g., “Only bookings from qualified leads logged in CRM count towards MRR target” or “Churn measured as MRR lost excluding downgrades from promotions.” Transparent definitions prevent disputes.
• KPIs vs Remedies: For each KPI, specify the remedy: e.g., bonus if target met, higher bonus if exceeded, and clawback or fee reduction if missed by more than a threshold. For instance, “Provider earns a $50K bonus for achieving 100% of target, prorated for partial achievement; no bonus (and no clawback) if below 90% target; if actual revenue falls below 90%, the Client may recover up to 50% of paid incentive【36†L184-L189】.” The exact scheme is flexible (see Payment Models).
• Dashboard and Reports: Objectives should map to specific dashboard tiles and report sections, so performance is continuously visible (see Measurement and Reporting).

Roles and Responsibilities

Clearly assign who does what. Typical roles include:

• Client Responsibilities: Provide timely access to systems/data (CRM, billing, analytics); supply historical data for baselines; assist with introductions or approvals; review reports; pay fees. The client may also agree to undertake certain sales/marketing activities (e.g. follow up on leads).
• Provider Responsibilities: Execute agreed growth initiatives (marketing campaigns, sales support, customer success actions, etc.); track and report KPIs; manage any required third parties; alert client of issues. Provider should use “commercially reasonable efforts” to exceed targets while maintaining quality.
• Joint Activities: Regular meetings to review results; coordinate on product/pricing or process changes; escalate obstacles.
• Governance: Assign Performance Manager or Steering Committee representatives from each side for weekly/monthly check-ins. This ensures accountability.

In effect, both parties collaborate toward revenue goals. As one commentator notes, incentives “provide financial and non-financial benefits to both parties to off-set economic flaws” of fixed pricing【8†L481-L489】. For example, a provider may be encouraged to invest more effort if high upside is possible, while the client locks in costs and shares performance risk.

flowchart LR
  A[Contract Signed] --> B["Define Scope & Revenue Targets"]
  B --> C[Service Delivery (Marketing, Sales, Customer Success)]
  C --> D{"Track KPIs via Dashboard"}
  D --> E{Performance Review}
  E -->|Met Target| F[Pay Incentives/Bonuses]
  E -->|Missed Target| G[Apply Remedies/Clawbacks]
  F & G --> H[Continue Collaboration or Adjust Plan]
  click A "##Executive Summary" "Back to top"

Deliverables and Milestones

List concrete deliverables or milestones, with due dates and acceptance criteria, aligned to the revenue objectives. Examples:

• Marketing Deliverables: e.g. “Launch X campaigns by date Y,” “Publish Z lead magnets,” “Secure Y qualified leads to sales.”
• Sales/Process Deliverables: e.g. “Provide weekly lead reports,” “Optimize sales funnel by implementing CRM workflow.”
• Customer Success Deliverables: e.g. “Conduct N user trainings,” “Implement retention program with target churn reduction.”
• Review Milestones: e.g. “Monthly performance report delivered by the 5th of next month,” “Quarterly business review every 90 days.”

Link payments to milestones where appropriate. For instance, milestone payments can be triggered by delivery of a progress report or completion of an activity. However, final incentive payouts should ultimately depend on actual KPI performance (see next section).

To avoid scope creep, an addendum should clearly state what is not included and reference the original SOW for baseline services. Any new activities are expressly added by the addendum.

Measurement and Reporting (Cadence, Data, Dashboards)

Transparency and consistent reporting are critical. Define:

• Data Sources: Identify authorized sources (e.g. CRM system, finance ledger, marketing platform, customer surveys). The client typically provides data access or extracts; provider maintains dashboards. All parties should agree on single “source of truth” to avoid conflicting reports.
• Reporting Tools: It’s recommended to use dashboards (e.g. in a BI tool or spreadsheet) that automatically update key metrics【28†L113-L122】. For example, a SaaS Growth Dashboard might display MRR, CAC, LTV, churn, lead funnel metrics, etc【28†L113-L122】. (See Dashboard Mockup below.) The addendum can include a screenshot or link to the agreed dashboard template.
• Report Frequency: Typically monthly or quarterly. Specify deadlines (e.g. “reports due by 5th business day of month”). Include an agenda/template for review meetings.
• KPI Calculation Methods: Spell out how each KPI is calculated from raw data. E.g. “MRR for a given month = sum of recurring subscription revenue contracted as of last day of month, excluding one-time fees.” This avoids disputes over definitions.
• Acceptance: Define a review process. For example, Client may audit reported figures within 15 days and raise any discrepancies. After adjustment, KPI results become final.
• Dashboards: Embed or attach sample graphs/tables for illustration. Dashboards should highlight trending vs. targets. As one guide notes, recurring-revenue dashboards give executives a “bird’s-eye view” of key metrics like CAC, CLTV, retention, net retention【28†L125-L128】.

graph LR
    ARR -->|grows over time| MRR
    CAC -->|impacts| |Conversion Rate|
    MRR --> LTV
    Churn -.-> LTV
    MRR -->|feeds| Revenue
    Revenue -.-> Growth
    WinRate --> PipelineVelocity
    LeadGen -->|inputs| Pipeline
    PipelineVelocity --> ConversionRate
    subgraph "Revenue Drivers"
      LeadGen
      WinRate
      PipelineVelocity
      ConversionRate
    end
    subgraph "Financial KPIs"
      MRR
      ARR
      LTV
      CAC
      Churn
    end
    LeadGen --> CAC
    LTV -.-> Growth

Mermaid diagram: Key KPI relationships (arrows indicate influence or calculation paths).

Sample Dashboard Table (Markdown):

Payment and Incentive Structure

The addendum should detail how fees and incentives are paid. Common models include combinations of fixed fees, milestone payments, and variable rewards. Below are three illustrative models (numbers and names are placeholders):

Notes:

• Fixed Fee (Base): could be time-and-materials or fixed milestones from the original SOW. It covers minimum costs.
• Bonus/Success Fee: Often capped (e.g. at 20% of base fees), and sometimes dependent on meeting both revenue and qualitative goals (e.g. customer satisfaction).
• Revenue Share: Ensure definition of “Net Revenue” (e.g. after returns/refunds, excluding base revenue). LawInsider notes that revenue sharing clauses should outline the percentage/formula, payment schedule, and any cost deductions【25†L28-L33】.
• Clawbacks: Protect the client by reclaiming incentive payments if revenue is later lost【36†L184-L189】. For example, a 30-day clawback period (common in sales commissions) means if a sale is canceled within 30 days, the fee is returned. This should be spelled out in detail.
• Contract Terms: Link payment milestones to contract deliverables where possible, but always reserve final payment on actual performance verification.

Including multiple options in a table (as above) allows negotiation. Be sure to label all amounts as examples or placeholders and specify currency by country/jurisdiction.

Term, Renewal, Termination, Exit Obligations

• Term: State the effective date and end date (e.g. one year), or tie to SOW term. Optionally allow renewal by mutual agreement.
• Termination: Include termination-for-cause (e.g. breach of fundamental obligations) and for convenience (usually with notice, e.g. 30 days). Upon termination, the provider is generally entitled to base fees earned up to date, but bonus incentives are typically forfeited or subject to clawback. (If the provider has exceeded targets before termination, payment for earned incentives may still be due, unless otherwise specified.)
• Exit/Wind-down: On early termination, require provider to transfer all work product, return client data (see below), and assist in knowledge transfer for a specified period at standard rates or pro bono.
• Survival: Confidentiality, IP licenses, indemnities, and accrued payment rights usually survive termination.

Intellectual Property, Data Ownership, Confidentiality, and Security

• IP Ownership: Typically, client retains ownership of its pre-existing IP and any data. New deliverables (e.g. reports, code, materials) created under the addendum should be specified: either assigned to client or licensed (often a perpetual, royalty-free license to client). If using third-party materials, note licenses.
• Data Ownership: The client (or the governed entity) owns all data provided or collected【48†L28-L34】. A standard clause example: “Client Data: Client shall retain sole and exclusive ownership of all data, including PII and proprietary information, provided to or used by Provider. Provider acquires no rights therein and will use it only for performance of this Addendum. Upon termination or upon request, Provider shall promptly return or destroy all such data【48†L63-L72】.” Such clauses ensure clarity: e.g. in one sample, “The State solely and exclusively owns all State data; Contractor acquires no right, title or interest【48†L83-L92】.”
• Confidentiality: Define “Confidential Information” (all non-public proprietary information of either party) and obligations. For instance: “Each party will protect Confidential Information of the other from unauthorized use or disclosure using at least reasonable care【50†L124-L132】, use it only to perform obligations, and limit access to employees who need to know. Information is excluded if publicly known or independently developed【50†L124-L132】.” The period of confidentiality (often 3–5 years after term) should be stated.
• Security: If handling sensitive data (e.g. customer info), require compliance with relevant standards (e.g. GDPR, ISO27001, etc.), data encryption, access controls, breach notification obligations, etc. Cite any specific regulations applicable.
• Modern Slavery / Ethics: While jurisdiction-specific, it’s good practice to require the provider to comply with laws (e.g. anti-bribery, export controls, labor laws).

Compliance, Warranties, Indemnities, and Liability

• Compliance: Each party warrants it will comply with all applicable laws and regulations in performing its duties. For example, the provider may warrant that it will not use non-compliant marketing practices, will adhere to data privacy laws, and will obtain any necessary consents.
• Warranties: Standard limited warranties include that the provider’s services will be performed in a professional, workmanlike manner (often “substantially in accordance with this Addendum”), and that any deliverables will not infringe third-party IP. Any warranties are typically disclaimed “as is” beyond these core promises.
• Indemnities: Each party should indemnify the other against third-party claims arising from its own acts. A common clause: “Provider Indemnity: Provider shall defend, indemnify and hold Client and its affiliates harmless against any losses, damages or costs (including attorneys’ fees) arising from Provider’s performance under this Addendum, including negligence or willful misconduct【23†L66-L74】. This includes indemnifying Client if Provider’s services infringe third-party IP.” Similarly, the client indemnifies for breaches of client data (e.g. personal data consent issues) or its own gross negligence. (Mutual indemnities help balance risk.) Typically exclude indemnity for each party’s own negligence or willful misconduct.
• Liability Caps: It’s common to cap aggregate liability. For example: “Aggregate Liability: Except for each party’s indemnity, confidentiality obligations, and liability for gross negligence/fraud, each party’s total liability for all claims shall not exceed the fees paid under the SOW in the 12 months preceding the claim【21†L30-L37】.” One version caps liability at fees paid in prior year【21†L30-L37】【21†L111-L119】 or a fixed amount. For instance, Zoom’s standard: liability “will not exceed total charges paid to Zoom under this agreement in the prior 12 months【21†L30-L37】.” If possible, exclude liability limits for IP indemnity or data breaches.
• Disclaimer of Consequential Damages: Often state that neither party is liable for indirect or special damages (like lost profits).
• Force Majeure: Optionally include standard force majeure (excused delay for unforeseeable events beyond control).

Dispute Resolution and Governing Law

Include a clause specifying how disputes under this Addendum are resolved. Options:

• Governing Law: State a jurisdiction (e.g. state or country law). In cross-border deals, clarify (e.g. “the laws of [State/Country] without regard to conflicts-of-law”).
• Venue/Arbitration: Either pick a court or arbitration. E.g., “Any disputes shall be subject to arbitration under [rules] in [city].” (Alternatively, litigation in a specific court.) Standard language can be lifted from the Master Agreement if consistent. The Addendum should explicitly reference that it is governed by the same law and dispute process as the SOW (or specify if different).
• Negotiation/Mediation: It’s good practice to attempt escalation (e.g. senior management talks) before formal dispute resolution.

Change Control and Amendment Process

• Written Amendments Only: State explicitly that no changes are effective unless made by a written amendment signed by both parties【52†L49-L53】. For example:

  “This Addendum may be modified or amended only by a written instrument executed by duly authorized representatives of both parties”【52†L49-L53】.
  This prevents scope creep or oral side deals.

• Process: Refer to the Master Agreement’s change control (if any). Often, any change request must be documented, reviewed for impact on scope/fees, and formally approved.

Dispute Resolution and Governing Law

Any dispute over this Addendum should follow standard contract procedure. For instance:

“This Addendum shall be governed by the laws of [State/Country]. The parties shall first negotiate in good faith. If unresolved, [arbitration/courts] in [location] shall have exclusive jurisdiction.”

This mirrors the SOW’s legal provisions. Explicitly stating governing law and venue is crucial to enforceability【12†L85-L90】.

Appendices and Templates

• Reporting Templates: Attach sample KPI dashboards, scorecards, or data tables. (Can be Excel, PDF, or included in the Markdown as examples.)
• Forms: Provide forms for milestone sign-offs, payment requests, and change requests.
• KPI Calculation Sheet: A table listing each KPI, its formula, data source, and owner (who calculates/validates).
• Dashboard Mockup: For illustration, a simple graphic or table of key metrics (as above).

Sample Dashboard Mockup (ASCII/Markdown)

Below is a simple markdown chart of key SaaS metrics over time:

This sample shows progression of KPIs toward targets. Targets are placeholders; actual values should be customized.

Mermaid Diagrams

graph LR
  subgraph Approval & Kickoff
    A[Stakeholders Agree to RAA]
    B[Define Targets & KPIs]
    C[Addendum Signed]
    A --> B --> C
  end
  subgraph Execution & Tracking
    C --> D[Implement Strategies]
    D --> E[Collect Data]
    E --> F[Update Dashboards]
    F --> G[Periodic Reviews]
    G -->|Adjust as needed| D
  end
  subgraph Incentive Flow
    G --> H{Performance Outcome}
    H -->|Meets/Exceeds| I[Pay Incentives]
    H -->|Falls Short| J[No Incentive/Clawback]
  end

Mermaid flowchart: RAA lifecycle from agreement to incentives.

graph TB
    A[Qualified Leads] -->|Convert| B[Opportunities]
    B -->|Win| C[Closed Deals/Revenue]
    C --> D[MRR/ARR]
    D --> E[Growth Rate]
    C -->|Signals| F[LTV]
    F -->|/ CAC| G[LTV:CAC Ratio]
    H[CAC] --> A
    A -->|affects| I[Conversion Rate]
    I --> B
    H -->|impact| G
    J[Churn] --> D
    D -->|minus churn| K[Net Revenue]
    K --> E

Mermaid graph: KPI relationships (e.g. leads → deals → revenue, impact of churn, CAC, LTV:CAC).

Conclusion and Next Steps

The Revenue Acceleration Addendum provides a rigorous framework to share both the reward and risk of growth. By tying payment to quantifiable business outcomes, it turns vague promises into enforceable commitments【12†L96-L103】【8†L558-L562】. The executive summary above and sections detail each component; the final section below is a Markdown template for immediate use. Insert specific names, dates, and amounts, and adjust clauses to jurisdictional norms.

Always review the final draft with legal counsel to ensure compliance with local laws and corporate policies. With clear KPIs, balanced incentives, and standard legal protections (IP, confidentiality, liability caps, etc.), both parties gain confidence that the engagement will actively accelerate revenue, not just deliver services. The attached payment model comparison and mermaid diagrams offer flexible options and clarity.

Appendix: RAA Template (Markdown)

[!NOTE] Template Usage: Below is a skeleton template. Replace placeholders [in brackets] and choose appropriate options. Guidance in italics to help customize. Citations [#] are illustrative of best practices.

# Revenue Acceleration Addendum

**Date:** [Insert date]  
**Parties:** [Client Name] ("Client") and [Provider Name] ("Provider")  
**Original SOW:** Statement of Work dated [SOW Date] under Master Agreement [if applicable].

## 1. Purpose  
This Addendum supplements the [Original SOW Name/Number] (the "SOW") to establish revenue growth objectives, associated KPIs, and incentive payment terms. It is intended to motivate Provider to enhance Client’s revenue outcomes while ensuring both parties share costs and benefits in a balanced way【8†L558-L562】【11†L68-L74】.

## 2. Scope of Work  
*The scope here should detail any new or modified services, deliverables, and responsibilities introduced by this Addendum (in addition to the Original SOW). Be specific.*  
- [Describe new marketing/sales/CS activities, reports, analyses, etc.]  
- [Reference original SOW section if applicable.]

## 3. Definitions  
Capitalized terms below shall have the following meanings:  
- **“MRR”** (Monthly Recurring Revenue): the sum of recurring subscription revenue in a calendar month.  
- **“ARR”** (Annual Recurring Revenue): 12 × MRR【16†L260-L264】.  
- **“Customer Acquisition Cost (CAC)”**: total sales & marketing expenses ÷ number of new customers in a period【16†L320-L326】.  
- **“Customer Lifetime Value (LTV)”**: average revenue per customer per month ÷ monthly churn rate【18†L495-L502】.  
- **“Conversion Rate”**: (Number of customers ÷ Number of qualified leads) × 100%. As defined in [Reference Section].  
- **“Pipeline Velocity”**: (Qualified Opportunities × Average Deal Size × Win Rate) ÷ Sales Cycle Length【44†L229-L233】.  
- **“Churn Rate”**: (Customers lost ÷ customers at period start) × 100% (and similarly for MRR churn)【39†L29-L34】.  
- *(Add any other custom definitions or acronyms here.)*

## 4. Objectives and KPIs  
Provider shall use commercially reasonable efforts to achieve the following KPI targets:  
- **[KPI1 – e.g. “MRR Growth”]:** Target = [e.g. “+15% QoQ increase in MRR”]. Measured monthly using [formula or source].  
- **[KPI2 – e.g. “Churn Rate”]:** Target ≤ [e.g. “3% monthly”], measured as (MRR lost/MRR start)×100【39†L29-L34】.  
- *(List each objective, target, and how it’s calculated. Attach a KPI sheet if complex.)*  

## 5. Responsibilities  
**Provider** is responsible for: [e.g. “planning and executing digital marketing campaigns, lead qualification, sales enablement, and delivering monthly performance reports.”]. Provider shall update the KPI dashboard weekly and meet monthly with Client to review results.  
**Client** is responsible for: [e.g. “providing access to CRM and financial data, timely feedback, and implementing agreed sales processes.”]. Each party will designate a project manager for communications.

## 6. Deliverables and Milestones  
Provider shall deliver the following, per the schedule below (all dates [Calendar days]/Business days from Effective Date):  
- **Milestone 1:** [Description, e.g. “Initial KPI dashboard deployed”] – Due [date].  
- **Milestone 2:** [e.g. “Launch Email Campaign A”] – Due [date].  
- **Milestone 3:** [e.g. “Mid-term KPI report”] – Due [date].  
*(Adjust number and content of milestones as needed.)*  
Milestones are subject to Client acceptance. Payment milestones may be aligned to these deliverables (see Section 7).

## 7. Payment and Incentives  
The compensation for the services under this Addendum is:  

- **Fixed Fees:** [Describe base fees/milestone fees/time and materials]. *For example:* “Provider will invoice \$X monthly (or per deliverable) for base services.”  
- **Incentives:** In addition to fixed fees, Provider will earn [bonus/commission/revenue share] as follows:  
  - **Model A (Fixed + Bonus):** Provider earns a bonus of [\$Y or X% of base fee] for achieving 100% of revenue target. A pro-rata bonus applies for partial attainment above [threshold]%【8†L558-L562】. *No incentive if performance < [threshold]%.*  
  - **Model B (Revenue Share):** Provider will receive [P%] of Net Revenue generated from [defined sources]**【25†L28-L33】**, payable quarterly within [10] days after quarter-end. “Net Revenue” is defined as gross revenue minus [returns/refunds and direct costs].  
  - **Model C (Success Fee):** If [specific target, e.g. “15% ARR growth”] is met by [deadline], Client will pay a one-time fee of [\$Z]. If not met, no fee is due.  
  *(Choose one model or combine; ensure to delete unused options.)*  

- **Clawback:** If any incentive is paid but later reversed (e.g. due to customer cancellation), Client may recover the excess. *For example:* “Provider will repay [100% of the portion attributable] if revenue is reversed within [90] days【36†L184-L189】.”  
- **Payment Terms:** Invoices for fixed fees are due [Net 30] days. Incentives are paid [quarterly/monthly] after validation of KPI results. All payments in [currency] unless otherwise agreed.  

## 8. Measurement and Reporting  
Provider shall measure progress using data from [e.g. “Client’s CRM and billing systems”]. Detailed KPI calculations are in **Appendix A**.  
- **Dashboard:** Provider will maintain a live dashboard accessible to Client, updating metrics in (near) real-time【28†L113-L122】.  
- **Reports:** Provider will submit written reports [monthly/quarterly] summarizing performance against targets, including any necessary explanations for variances. Reports are due within 5 business days of period-end.  
- **Review Meetings:** The parties will meet [monthly/quarterly] to review results and agree on any adjustments to tactics.  

## 9. Term and Termination  
**Term:** This Addendum commences on [Date] and continues until [Date or condition, e.g. “12 months”], unless earlier terminated. It may be renewed by mutual written agreement.  
**Termination:** Either party may terminate this Addendum for a material breach not cured within [30] days after notice. Upon termination, Client shall pay Provider for work performed and incentives earned up to the termination date. Any bonuses for unmet future targets shall be forfeited【36†L184-L189】.  
**Exit:** Upon expiration or termination, Provider shall return all Client data and Confidential Information【48†L63-L72】, and provide a [transition report/smoothed handover] if requested.

## 10. Confidentiality  
“Confidential Information” means all non-public information disclosed under this Addendum. Each party shall:  
- Protect it with at least the same care as its own (but no less than reasonable care)【50†L124-L132】.  
- Use it only to perform obligations hereunder.  
- Not disclose it except to employees/consultants who need to know (and who are bound by similar obligations).  
Excluded information: already public, independently developed, or lawfully obtained without breach.  
Confidentiality obligations survive [3] years after termination.

## 11. Intellectual Property  
Client retains all rights in its background IP and data. Provider retains rights in its pre-existing IP and methodologies.  
Provider hereby grants Client a perpetual, royalty-free license to use any deliverables (reports, data analyses, software, etc.) created under this Addendum for Client’s internal business purposes. Provider ensures deliverables do not infringe third-party IP. Any improvements specifically funded by Client are assigned to Client.

## 12. Data Ownership and Security  
All data provided by Client (including customer data) is and remains Client’s exclusive property【48†L63-L72】. Provider will use such data only to perform this Addendum and will not acquire any rights therein. Upon completion or termination, Provider shall promptly return or destroy all Client data【48†L63-L72】.  
Provider shall implement reasonable security measures (encryption, access controls) to protect data, and comply with applicable privacy laws (e.g. GDPR, CCPA). Any personal data processing must be done per [Data Protection Addendum/DPA] if applicable.

## 13. Representations and Warranties  
- Each party represents it has authority to enter this Addendum.  
- **Provider warrants** its services will be performed in a professional manner and in compliance with applicable laws. EXCEPT AS SPECIFIED, ALL SERVICES ARE PROVIDED “AS IS” without other warranties.

## 14. Indemnification and Liability  
- **Provider Indemnity:** Provider shall defend and indemnify Client and its affiliates from any losses arising out of Provider’s negligence, willful misconduct, or infringement by deliverables【23†L66-L74】.  
- **Client Indemnity:** Client shall indemnify Provider from claims arising from Client’s data or materials, or Client’s negligence.  
- **Liability Cap:** Except for each party’s indemnities or gross negligence, each party’s aggregate liability shall not exceed the fees paid to Provider under the Original SOW in the 12 months preceding the claim【21†L30-L37】.  
- **No Consequential Damages:** Neither party is liable to the other for indirect or consequential losses (e.g. lost profits).  

## 15. Dispute Resolution and Governing Law  
This Addendum is governed by the laws of [Jurisdiction]. Any disputes shall first be referred to senior executives. If unresolved in [30] days, disputes will be submitted to [arbitration or courts] in [Location] in accordance with [Rules]. *[Alternatively, mirror Master Agreement’s clause.]*  

## 16. Amendment  
No amendment of this Addendum is effective unless in writing and signed by both parties【52†L49-L53】. (This Addendum references the amendment procedures of the Original Agreement.)

## 17. Miscellaneous  
- **Entire Agreement:** This Addendum plus the Original SOW constitute the entire agreement on revenue incentives. In case of conflict, the terms here prevail on performance metrics【12†L100-L103】.  
- **Notices:** [Address for written notices].  
- **Assignment:** Neither party may assign this Addendum without the other’s consent (except to affiliates).  
- **Severability:** If any provision is invalid, the remainder stays in effect.  

*IN WITNESS WHEREOF, the parties have executed this Addendum as of the date first written above.*  

[CLIENT COMPANY]  —  [PROVIDER COMPANY]  
By: ________________________  By: ________________________  
Name:  _[Name]_                Name:  _[Name]_  
Title: _[Title]_              Title: _[Title]_  

### Appendix A – KPI Definitions and Formulas (Sample)  
*(List each KPI from Section 4 with calculation example, data source, and who maintains it.)*  

### Appendix B – Sample Dashboard Screens (Optional)  
*(Attach screenshots or descriptions of agreed dashboard visualizations.)*  

### Payment Models Reference (see section 7)  
*(A summary of the payment/incentive models considered, if needed.)*  

Sources: Industry best practices and contract guidance inform this template. For example, addenda should explicitly define scope changes, KPIs, and remedies【11†L68-L74】【12†L96-L103】. Performance incentives “provide financial and non-financial benefits to both parties”【8†L481-L489】 and must be tied to objective targets. Data dashboards and SaaS metrics are recommended for transparency【28†L113-L122】【39†L29-L34】. Model payment structures (fixed vs success-based) and clauses above draw from standard legal templates (e.g. revenue-sharing clauses【25†L28-L33】, indemnities【23†L66-L74】, liability caps【21†L30-L37】, confidentiality protections【50†L124-L132】, amendment requirements【52†L49-L53】, etc.). Adjust all placeholders ([ ]) to your situation and jurisdiction.