How I'd Position an Agency to Reach $8M — Transcript

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1. 0:00Hello.
2. 0:00>> Hello.
3. 0:01>> I'm Stephanie Fox. I own a digital
4. 0:03marketing agency, specifically paid
5. 0:06media and SEO services.
6. 0:08Uh we do 1.2 in revenue. I'd like to be
7. 0:10at eight. And we grew really fast. So,
8. 0:14in a year and a half, 2 years, we were
9. 0:16making over 1.2 million. I said yes to
10. 0:19everything. And now I'm trying to figure
11. 0:21out, do I go towards paid media, or do I
12. 0:25specifically focus on SEO?
13. 0:30>> Ah, hmm. I
14. 0:34I actually think it's an avatar
15. 0:35question, which will solve the service
16. 0:37the product question.
17. 0:38>> Mhm.
18. 0:39>> So, who do you serve?
19. 0:40>> So, that's a good question. We serve a
20. 0:42lot of different companies.
21. 0:44>> Right.
22. 0:44>> So, B2B, B2C, SMBs, cybersecurity,
23. 0:48cannabis, like we're kind of all over
24. 0:49the place in terms of our avatar.
25. 0:51>> How are you getting customers right now?
26. 0:53>> Say that again?
27. 0:53>> How are you getting customers right now?
28. 0:55>> So, paid media, SEO, organic.
29. 0:57>> just running ads and stuff.
30. 0:58>> And that's part of it. And then I have a
31. 1:00big referral network and community. So,
32. 1:02I'm
33. 1:03>> Like local?
34. 1:05>> When you say community?
35. 1:05>> Uh no, online community.
36. 1:07>> Oh, got it. I got it.
37. 1:08>> Yeah.
38. 1:08>> Okay.
39. 1:13Feel like you're in a lot of pain right
40. 1:14now, even though you seem really upbeat.
41. 1:16Um
42. 1:17just cuz I know that 1.2 million in that
43. 1:19business is horrible.
44. 1:21Um not like money-wise, just like
45. 1:25suckage-wise. Um
46. 1:27You do a lot of things for a lot of
47. 1:28people that are all different.
48. 1:30>> Yeah.
49. 1:30>> That sucks.
50. 1:31>> Yeah.
51. 1:31>> Um
52. 1:34>> [sighs]
53. 1:34>> Okay, so right now, is everyone paid the
54. 1:36same amount?
55. 1:37>> No.
56. 1:38>> Okay. Of the 80/20, who pays you the
57. 1:41most money?
58. 1:43>> SEO clients.
59. 1:45>> Do you like them the most?
60. 1:46>> Yeah.
61. 1:46>> Do they stay longer?
62. 1:48>> Yes.
63. 1:49>> Then it's probably the right service to
64. 1:51look for, or start with.
65. 1:53>> paid clients, and I feel like the
66. 1:56opportunity
67. 1:57to
68. 1:59gain more revenue with those clients
69. 2:01based on the pricing model with paid.
70. 2:03>> Mhm.
71. 2:04>> That's that, but then I'm leaning
72. 2:05towards SEO because of AEO and we're
73. 2:07seeing a huge increase in terms of value
74. 2:10and then people in the market they just
75. 2:12don't know, but they know it's
76. 2:13important. So I'm trying to lean into
77. 2:15that.
78. 2:15>> I would sell I would sell the
79. 2:17the AI stuff.
80. 2:18>> Mhm.
81. 2:19>> Um I mean you might as well be early to
82. 2:21it. I'll bet you if you ran paid ads to
83. 2:23that offer that would probably be the
84. 2:25combo that I would go for.
85. 2:27>> Mhm.
86. 2:27>> Um and I would I would just position up
87. 2:29market. So fundamentally
88. 2:34I probably talk to a marketing agency in
89. 2:37the one to three million dollar range
90. 2:40five times a week.
91. 2:41>> Mhm.
92. 2:42>> And so like I can crystal ball what the
93. 2:44rest of this life looks like
94. 2:46>> Yeah.
95. 2:46>> for you. But basically the current path
96. 2:48that you're on is going to cap at three
97. 2:51to five
98. 2:52unless and and and getting to three to
99. 2:54five will just be more pain than what
100. 2:56you're currently in. Um because right
101. 2:58now you can probably get to three and
102. 3:00you can see that path, but getting above
103. 3:01three you're like this might be horrible
104. 3:03and you will be correct.
105. 3:04>> Mhm.
106. 3:04>> Um and so part of the issue is that
107. 3:06margins will compress, getting talent to
108. 3:08be able to do the stuff will be harder
109. 3:10to find. Um and if you offload some of
110. 3:13the best clients to newer reps they'll
111. 3:15do a poor job and then sometimes you
112. 3:16start losing the best guys and all of a
113. 3:18sudden margins collapse and it becomes a
114. 3:19big problem. So what do we do?
115. 3:22So most of the best moves in
116. 3:25many of the correct moves in business
117. 3:28happen at sticking points are
118. 3:30counterintuitive. Because the intuitive
119. 3:32thing if it were the correct answer you
120. 3:34would have already done it you would
121. 3:35have gotten past the sticking point. And
122. 3:37so the right move is I have to say no to
123. 3:41the smaller customers that are paid. I
124. 3:43have to say yes to the bigger customers
125. 3:44that are SEO and AEO. And I have to
126. 3:48position myself in the marketplace as
127. 3:49somebody who only deals with customers
128. 3:51who are doing over how much money
129. 3:53that you want ideally?
130. 3:54>> 8 million.
131. 3:55>> No, no, I know you want that. What it uh
132. 3:58What do you uh
133. 4:00the top 20% of the customers you have
134. 4:01that are SEO based, what do they make
135. 4:04for you? What size are they?
136. 4:05>> Anywhere between I would say 10 and 40
137. 4:08million.
138. 4:09>> Yeah, so I would say like you got to do
139. 4:10over 10 million dollars a year.
140. 4:11>> Okay.
141. 4:12>> At the very least call it five and
142. 4:14you'll still be able to get like decent
143. 4:15size businesses.
144. 4:16>> Do you think I need to niche down in
145. 4:18specific industries?
146. 4:20>> I think that you might find that in
147. 4:21time. I would say for now, like right
148. 4:24now you're doing everything for
149. 4:25everyone.
150. 4:26>> Yeah.
151. 4:26>> If we can do just this thing for people
152. 4:28over this size, that's a great first
153. 4:30step.
154. 4:31>> Yeah. [laughter]
155. 4:31>> Right? Um I think that if you take that
156. 4:33step, you will find again an 80/20 where
157. 4:36it's like we're actually really good at
158. 4:37cyber, we're really good at, you know,
159. 4:39these three industries.
160. 4:40>> Yeah.
161. 4:40>> And then you just narrow it down to the
162. 4:41ones where your LTV to CAC becomes
163. 4:43absurd because they never want to leave
164. 4:44you and then then you have a money
165. 4:46printing machine. And that's the only
166. 4:48way that agency scale is going up
167. 4:50market.
168. 4:51>> Mhm.
169. 4:51>> So the basically agencies have two polar
170. 4:53extremes that exist in the market. You
171. 4:54can either be I'm selling to SMB and if
172. 4:57you're selling to SMB, you're probably
173. 4:58priced too high
174. 4:59right now.
175. 5:00>> Mhm.
176. 5:01>> You have to get priced to their worst
177. 5:02month, not what they'll say yes to.
178. 5:04Cuz otherwise you create a churn
179. 5:05factory.
180. 5:06>> So what is that price?
181. 5:07>> For SMB, it's usually like 400 to 600 a
182. 5:09month.
183. 5:10Super cheap.
184. 5:11>> Holy
185. 5:12>> But you build that No, but like you
186. 5:13build So like Walmart was built with the
187. 5:16intention of being the cheapest one
188. 5:17since day one. Every decision was about
189. 5:20how do we drive down costs? It's not I
190. 5:22do this thing and charge less. That is a
191. 5:24terrible business. It is I figure out a
192. 5:26way to try like to make this cost me
193. 5:27nothing and then I charge something.
194. 5:29That's the goal.
195. 5:31So those are kind of the two polar
196. 5:32extremes. You can absolutely crush here
197. 5:34because acquisition of these customers
198. 5:35at their price point is you can do it
199. 5:36all like
200. 5:38unlimited amounts and typically if you
201. 5:40have at least a decent service, so like
202. 5:42map listing and getting them on the you
203. 5:43know, ranking all that all that stuff,
204. 5:45you can usually keep like 30 month LTVs
205. 5:48on an SMB with super cheap acquisition
206. 5:52at that price.
207. 5:54But you got to do a lot of them and you
208. 5:55have to build a business that way. If
209. 5:56you're going to go higher service, which
210. 5:57is what it sounds like, then the only
211. 5:59way is up.
212. 6:00And you can pretty much you can
213. 6:02determine how far along someone is in
214. 6:03their entrepreneurial career if they're
215. 6:04a service business owner by the price
216. 6:06point they charge and the customer level
217. 6:07they serve.
218. 6:08>> Mhm.
219. 6:09>> Straight up. Look at the biggest
220. 6:10agencies in the world. What do they all
221. 6:12have in common? They serve the biggest
222. 6:13customers.
223. 6:13>> Yeah.
224. 6:15>> So you that you have one way and it's
225. 6:16up.
226. 6:17>> Okay. Thank you.
227. 6:18>> Yeah, you bet. If you're not getting as
228. 6:19many leads as you want and your business
229. 6:20is demand constrained, meaning you could
230. 6:22service more customers than you
231. 6:24currently [music] have, then this is for
232. 6:25you. So marketing is changing and I
233. 6:28think ACQ tends to be on the bleeding
234. 6:29edge of this stuff. We certainly spend
235. 6:30the money
236. 6:31to do it, but we also build custom
237. 6:33software and we pay amazing vendors and
238. 6:35very expensive people to figure out the
239. 6:37system that we have right now and I want
240. 6:38to share it with you kind of open kimono
241. 6:39style. If you're not getting as many
242. 6:40leads as you want,
243. 6:41boy do I have the thing for you. Click
244. 6:43below, book call and
245. 6:45hopefully I'll see you in Vegas.