Link Royalty to Financial Output or Outcome. The approach least filled with conflict for all concerned is to link the fee to the financial outcome of the project. Authors, software developers, designers and inventors, tend to be paid for their intellectual property rights in the form of a percentage on the long-term revenues from their creative efforts, particularly if they are independent professionals. Also pharmaceutical companies often negotiate royalties for using other companies' drugs in recipes. Royalty is a simple and good method, because it links the output directly to the input, this is why I rank it 2nd.
Royalty becomes much more complex of the outcome is a process or a socially constructed event.
It can be very hard to distinguish revenues that the client will receive from the installation of a new order entry system or the profit of a new organization or strategy implemented. Still the method has been used to great advantage by some advertising agencies for well-defined marketing campaigns. Also management consultants involved in cost cutting projects with pre-defined outcomes apply it. Link Success Fee to Non -financial Outcome. A success fee can be linked to a non -financial outcome.