How Retention Based Pay Helps Client Relations

An in-depth look into rewarding an employee with retention based pay to maintain their drive and a client's happiness

It’s no secret that happy, motivated and productive employees are good for business. Having a company full of people who are inspired and ready to do their job to the best of their ability each day is crucial to company success, regardless of size. Compensation and benefits are some of the most important drivers of employee satisfaction. It’s no surprise then that businesses will often incorporate bonuses based on performance – anything from typical pay bonuses to company-wide incentives like profit-share or ownership.

Though compensation for hard work is important, it’s imperative that the reward is appropriate. According to a study done by the Harvard Business Review, “performance-related pay [is] positively associated with job satisfaction, organizational commitment, and trust in management”; but profit-related pay is not.

Here at Hawke, we thought long and hard about what type of employee behavior we wanted to reward and how we wanted to reward it. With our business model, client trust and satisfaction are everything, so we naturally sought to reward employee behavior that contributed to maintaining positive and fruitful client relations. That led to our lightbulb moment: since we’re a month-to-month service, client longevity isn’t a given. It’s something we have to constantly work to maintain. We offer our services on an a la carte basis, so clients only pay for what they need. Often, our experts see that a client could benefit from an additional service, but fear the client might be miffed by an upsell. So how do we reward employees for great work that fosters client trust and long-lasting client relationships?

We reward employees based on retaining clients, not increasing their budgets. 


When employees are rewarded for increasing clients’ budgets, they’re more likely to push companies to take bigger risks. These employees develop a short-term strategy that often pushes companies into uncomfortable situations where these risks end up being detrimental. Not surprisingly, this tends to hurt the client relationship.

By rewarding based on client retention, you adopt a long-term approach where employees are likely to be more conservative with their recommendations and allow the company to take risks on their own terms. Retention-based pay helps not only client relations, but also keeps your employees accountable and engaged.

How It Works

1. Links Client Success to Employee Success

At Hawke, we have a different business model than most marketing agencies. We offer our services a la carte and operate on a monthly basis, meaning we don’t lock clients into long-term contracts. Because clients can pick and choose only the services they need, when they need them, we’re able to create uniquely tailored marketing solutions that fit into budgets of any size. However, this creates extra pressure on our ops teams to inspire and impress clients daily so they continue their relationship with us for as long as possible.

Rewarding employees based on client retention gives extra incentive to keep the client’s needs in mind. This leads to genuine, long-lasting relationships between our employees and clients, since the client’s success and happiness is directly linked to the Hawke employee’s success. This system has led to mutually beneficial relationships – not only do we perform for the client, but that performance often leads to new business through client referrals. Word-of-mouth is one of the most powerful tools when it comes to maintaining and expanding your client roster.

2. Establishes and Maintains Client Trust

The other day, a client expressed concern that our team was trying to upsell him with new services he wasn’t entirely convinced he needed. He was worried that our team was trying to boost their commissions by throwing unnecessary services at him. When I told him that our team was rewarded solely for client retention, his whole attitude changed. He instantly became much more receptive toward our team’s suggestions and expressed a heighted trust in his team at Hawke.

As is almost always the case, the client felt assured that his business – and not just his money – was valued. When clients know that their team is rewarded based on keeping them around, they stop worrying about getting swindled when the team gives recommendations. They also don’t need to worry about their team losing interest when a new client comes along. Their business and their money is even more valuable now than it was when they first signed.

3. Drives Employee Performance

Goals are great for driving employee performance, and key performance indicators make great objective measurements to assess whether employees have met those goals. By introducing incentive pay based on client retention, you link your KPIs to client satisfaction.

This makes life easier for your executive staff, as it eliminates the need to set new goals for each team member every quarter. Of course, managers should still speak with their team members to figure out individual and personal goals, especially when it comes to professional growth and development. But by rewarding based on client retention, you mitigate the risk of individual employees losing sight of the bigger picture and the role they play in getting there.

Managing employee performance starts with setting clear expectations. With this incentive system in place, client feedback can serve as that clarification and keep everyone aligned.

Engaged Employees, Happy Clients

I’ve found our reward system keeps the team members at Hawke engaged and focused, which leads to stellar client work and increased client satisfaction. In fact, it’s proven that companies with highly engaged employees consistently outperform companies with disengaged employees. Incentive pay based on client retention encourages our employees to consistently improve their effectiveness while simultaneously doing the same for the company as a whole.

By looking into the needs of our business and structuring our incentive pay program around that, we’ve aligned employees goals to company and client goals. Clients trust that their team at Hawke has their best interests at heart, Hawke team members communicate openly and have a clear understanding of what needs to be done to meet their goals and Hawke as a company benefits by fostering both genuine client-company relationships, as well as a culture of happy, engaged employees.