15 Years of Agency Knowledge in 20 Minutes

Over the last 15 years, I've built my own marketing agency to over $7 million per year, which I still run and continues to grow today. But not only that, I've also helped 133 agencies grow to 7 figures and beyond. It's all documented with testimonials and reviews on our website. Today, I want to share the 15 biggest lessons I've learned over the last 15 years growing agencies. My goal is to save you all the time and money that I had to sacrifice to learn these, because if I had known these things when I started, I can't even imagine where I'd be right now. The only thing I ask is that you remove all distractions, close down the tabs that you have open right now, and watch this video to the end and pay really, really close attention to the details. I guarantee it will be worth it. All right, so I wanna rapid-fire these 15 lessons that I've learned over the last 15 years and make it as quick, concise, and actionable as possible. Lesson number 1 is to niche. The very fastest way to grow your agency is by positioning you as an expert in a very specific market. The way I learned this was in my first agency, I was a generalist. The business was selling to anybody. It could be a roofer, dentist, chiropractor, anybody in between. I remembered sitting down face to face after sitting in a BNI meeting and getting a recommendation, sitting with a dentist. I went out to the office, I had the meeting with the dentist, I took him through our sales process. That dentist looked me right in the face and he said, well, this sounds really cool. What other dentists have you worked with? And is there a couple examples of other dentists that you've worked with that I can see examples? And of course I didn't have that. And it was clear to me that he and most clients would prefer to deal with someone that has proven experience in businesses just like theirs. I shift shifted from let's try and be a generalist to let's get proven results in a specific industry and let's market those results. And so that's what we did within plumbing and HVAC SEO. We focused on the plumbing niche. We started to get results for plumbing clients by being in one vertical. Yes, you become more magnetically attractive to the prospects that you talk with. You can also systematize the delivery. You can expect to generate better results over time. So lesson one, The fastest way to grow your digital marketing agency is to focus on one very specific vertical. Lesson 2 is recurring revenue is the name of the game. You run a digital marketing agency, you can choose to price your programs any way you want, right? You could sell a program fee, you can sell a once, one-time design fee, or you could sell a monthly recurring fee. My first agency, Developcom, it was a web design and hosting company. We were project-based, right? We would sell a $1,500 website and we did have a hosting and maintenance fee, usually like $50, per month. And I ran that business for several years. I sat in BNI meetings, I did cold calls, I got some clients, but every time I got a new client, it was a one-time payment and then it was done. I was never able to get that business past $10,000 any given month. And when I went to work at ReachLocal, the big pay-per-click management company that had grown to over $250 million a year in revenue, I noticed they were selling a retainer-based service that was over $2,500 per month, between $750 all the way to like $10,000 $1,000 per month. But the key was every time they sold a client, it was generating recurring revenue. And as long as they did a good job and those clients stuck around, that recurring revenue would grow. I took this to heart in my new agency, Click Incorporated, which became Plumbing and HVAC SEO. And I said, I'm not gonna sell project stuff. I'm gonna make sure I've got a, a recurring revenue base that grows. And so that's all we sold. That's all we sell today is a monthly recurring growth program. And that's one of the key reasons we've been able to have such accelerated growth. Another amazing example of this is Tony Ricketts from Lawnline Marketing, runs an amazing agency serving lawn care companies. You know, he'd grown the agency to about $30,000 in, in predictable recurring revenue, but he was selling these big website builds and he was charging $10,000 to $15,000 to build the websites. And that was probably another $30,000. So he'd have $60,000 months, but only $30,000 of it was recurring. We had a tough conversation. We talked about eliminating the project work and rolling it all into his monthly fee. He recognized he was going to see a drop in his average monthly revenue. In the short term, but because he was focused on recurring revenue and that's what he was focused on selling, it would free up so much extra energy and that recurring base would grow. Fast forward about 12 months, he grew from $30,000-ish to well over 7 figures. Now he does over $250,000 in monthly recurring revenue. And he would say that decision to not do project work, but to focus on recurring was a key growth accelerator in his business. Lesson number 3 is autopay versus checks. And I think in today's marketplace, we all understand if we're gonna sell a monthly recurring fee, then we want to make sure it auto charges. One of my early clients, Town Plumbing, wanted to pay via check. And he said, hey, I'll give you a check. And we agreed $1,500 per month. And the first month, gave me a check, we put it in the account. All right, let's go to work. The next month, I had to go out there. Hey, you know, let's get the check. And I physically go to his office and get the check. Wouldn't you know it, that third month, couldn't schedule the meeting, didn't get the check. I'm waiting around. Usually, if somebody's paying you via check, it becomes very consistent. Oh, I already mailed the check. It's in the mail. It'll get there eventually, but it's not consistent and predictable. Now, if you've got auto charge via credit card authorization or through ACH, you set it to bill the 7th of every month, then it just automatically hits until they cancel or until there's some type of issue with the credit card. Much easier to manage that than to chase down checks. And so just simplifies your payment and consistency of cash flow. Lesson number 4 is to give value in advance. You know, when we think about marketing our agency, there's lots of things we can do. We do cold outreach, we can put out content, we can speak at events and industry associations. A lot of my prospecting early on, I would send an email. I'd say, hey, look, I can help you generate more sales. Do you want to meet? I'd love to schedule a time to show you how we can generate better results. Very high resistance to that. And when I shifted to showing value in advance, which one of my first clients that I got was AAA Modern Air, large air conditioning installation repair company in South Florida. What I did was I pulled up their website, I pulled up a Google search result, and I noticed they were not coming up in paid, they weren't coming up in organic. They were nowhere to be found for Fort Lauderdale air conditioning repair. I took a screenshot and I showed that they weren't coming up in the paid listings or the organic listings, and I put together a brief message, you know, hey, Sal, just wanted to reach out. Noticed you guys aren't coming up. There's a lot of people searching for these terms in South Florida and would love to schedule a quick time with you to show you what the issue is and why you're not coming up. And wouldn't you know it, he responded to that because I was showing a problem that he had that he perceived. He knows I'm not coming up for those terms and that's costing me money in my business. To the extent that you can customize your messaging and you can add value in advance, and you take that to the next level by putting out content, by publishing case studies, by publishing books. But even if it's just as basic as pointing out a very specific problem and adding value in advance, you're going to become more attractive to the prospects that you want to work with. Number 5, expert positioning works. Like we talked about being in the niche, right? And the benefits of being niche-focused. If you want clients to come to you pre-positioned to buy, willing to pay at a premium rate, then being looked at as the expert, as the authority, absolutely works. And the way I learned this was at Plumbing and HVAC SEO, as we grew and as the business started to scale, we started to shift from chasing prospects down to putting out high-leveraged content. And so we published our book, The Complete Guide to Internet Marketing for Plumbing Contractors. Publishing a book, by default, if they see a book that was written by you, you're an author, you're a thought leader. We started to get clients coming to us pre-positioned to buy. The amount of effort that we had to put in to get every single client went down significantly. The better positioned we were, the easier it was to land clients. Expert positioning absolutely works. Tip number 6 is design your onboarding in advance, right? If you're gonna get clients and they're gonna pay you a fee, $1,500, $2,000, $3,000 a month, think about what that onboarding process is going to look like and engineer it in advance. What is the call going to sound like? What details do we need to capture? How are we going to capture those details? You know, early in plumbing and HVAC SEO, we started to get some really good success with clients. We started to snowball the amount of clients that we got, but we noticed that our onboarding was, hey, go fill this form in. And you know, we thought that would help and we would get to work and we would kind of go behind the scenes and we'd start building websites and creating content and designing the graphics and claiming the directories. And then the client would reach out month 2 or month 3 asking what was going on, expressing frustration. And we start to see cancellations around month 4, month 5. And it was because we weren't intentional about that onboarding process. We weren't intentional about communicating every step of the way. And when we did that, when we started to get ahead of it, to change the communication, we saw our, our retention go up significantly from couple of months to, to years. Lesson number 7 is to, is to get help. I think the reason I started Plumbing and HVAC SEO, the reason I started the agency was so I can make the money that I wanted to make and I can have the freedom to do the things I really wanted to do. What I realized was I was doing most of the stuff myself. I was selling, I was creating the content. We got the client, I was doing the onboarding. While I was pretty good at it, I started to get burned out. I started having to work harder and harder and harder with each progressive client that we got. And it became abundantly clear that if I want to scale the business, if I want to have the life that I want, I'm going to have to get help, right? And so we hired an operations manager and then we hired account management and then we hired sales and marketing support so that I had the help that we needed to continue to grow and scale and have a huge impact. Lesson number 8 is to use pre-screening assessments. So as you start to hire, if you don't have a great onboard hiring process and you're not selecting the right candidates, you can wind up chasing your tail. You think, okay, I need someone to take over operations. As an example. And then you put out an ad and somebody applies, a bunch of people apply. You do a bunch of interviews, you meet with some people, you see somebody that, wow, they're really nice. They seem like they would be a good fit. You hire them, they get started. And then 3 months, 4 months in, you realize this isn't the right person. And that was my lesson. I had a couple of really bad initial hires because I was hiring people like me. I was hiring people that were articulate, that had a high level of passion. And what I realized was I needed to hire people that were the opposite. Of me at some level, people that didn't want to be on camera, didn't want to be on front of, but were okay being behind the scenes, were okay doing the work. And so a couple of assessments I really like to run, I like a DiSC profile to understand their personality, but I also really like Kolbe assessments. So Kolbe helps you just get a sense of their striving personality type. What I found was for operational roles within our agency, if I can hire someone that was high follow-through, most importantly, high follow-through, that would counterbalance me and my business partner's high quick start. Like, we're like an idea, we get excited, we'll take a couple of steps, and then after doing it 2 or 3 times, we want to move on with our lives and not do it again. Where somebody that's high follow-through enjoys doing the same thing and enjoys routine and it can follow through on those very specific tasks. When we started pre-screening applicants, based on Colby and making sure we were hiring someone with a high follow-through modality, they tended to stick around long term and be a great fit. That really helped us grow and scale the agency. Lesson number 9 is that you want to serve the higher end of the market. You know, this was a lesson that we learned serving plumbing companies. We started to get some one-man operators, some people that had never marketed before, and we got a couple of bigger companies too, like $5, $10, $15 million companies. There was a completely different business reality in the more successful companies where they had a true business model, they had a team in place, they had financial resources to invest. Those companies would hire us, let us do our thing, stick with it long term. And as long as we could show the results, you know, be as happy as could be. Where sometimes the, the smaller operator, the, the company doing less than $1 million per year, the company just getting things started, or just a one-man operator, they turned out to be more of a struggle, required more of our time and our attention, and would wind up canceling months 3, months 4, months 5. And so we decided, look, we're going to consciously recognize our ideal client is typically going to be doing $1 million or more in revenue. And so we started disqualifying small operators. We started disqualifying companies that didn't have a marketing budget. And that was a life-changing decision. Decide— you get to choose your clients. Decide to move up the market, like choose higher level clients. Number 10, similar on a retention frame, is set long-term relationship expectations. You know, selling your digital marketing agency program, you can package it a variety of ways. Like you could do month to month, you could do project, or you could do annual commitments with long-term time horizons. You know, as we were growing our agency, kind of lesson we saw was we went higher market that improved retention, but we still had some issues where we were churning clients we, we tried to look at like what was the issue. And, and sometimes it was they were sold a big promise with a short time horizon, and that's easy to sell but hard to retain. And so when we shifted to, look, we're gonna do a lot of work, right? With your program includes building a website, doing SEO, setting up marketing automation, putting tracking in place. You're gonna put a lot of time and energy into it. And there's a gestation period between when you do that work and when they see oversized results. You can set the expectation with the client. Look, this isn't a short-term thing. If you're thinking, 30 days, we shouldn't do business. But if we can think long-term, if you're willing to commit to this for a year, our team's willing to put in the effort, let's do business, right? And so we put a 1-year contract in place. Once we made that decision, the clients that are willing to sign up on a 1-year contract are thinking long-term, right? They're going to give you the time and the grace to do your work, to do your thing. If you sold them, hey, let's trial this for 30 days, you've, you basically set the expectation that if we don't generate a tangible return in 30 days, you probably should cancel. More and more of your clients are gonna do that if you can't set those long-term expectations. Lesson number 11 is really the number one reason clients leave. And oftentimes we would think the number one reason a client would leave would be the, the lack of results. And we were surprised when clients we crushed it for and were continuing to crush it for would reach out and cancel. We're like, well, what gives? Why are these clients canceling? And what we found out was the number one reason a client will leave is actually perceived indifference. They feel like you don't care about them. They don't feel like you're their growth partner. And so when we realized that, we said, okay, well, we need to express that we care about our client. We need to check with them on a monthly basis. And when we did that, we had much less churn. We had much happier clients. And of course you gotta balance the results, but you also have to balance the, the relationship. Lesson number 12, know your numbers. It's a lot of fun to build a 7-figure agency, multiple 7-figure agency, continue to grow, continue to scale. But it's also very easy to have a million-dollar agency that has virtually no profitability. The way I learned this lesson was, you know, we had grown to, I think, about $1.5 million in annualized revenue. We meet with our CPA on a, on a monthly basis. Uh, he said, you know what, your profitability was almost as much when you were doing $500,000 in revenue. Of course, that felt like a slap across the face because it's like, well, we're doing so much more work. We've taken on so much more risk. We were focused exclusively on the top line. Two books I really recommend you read. Number one is Profit First, just to get the philosophy of profitability. The second book is Simple Numbers by Greg Crabtree, which will help you understand how to set up your financials to ensure profitability. It's your responsibility to look at the revenue, look at the P&L, and make decisions to ensure profitability. And if your business isn't doing at least 10% profit after paying yourself or the business owners in the company, you're overspending, right? You have to make some adjustments at a minimum, and you should be targeting like a 30 to 35% net for a healthy digital marketing agency. Number 13, you don't have to be an operations whiz, but you do need people who are. As we grew, as we scaled, we put people in place. We started to put systems like Basecamp and ClickUp and those types tools. And I felt like as the owner of the business, I needed to create the SOPs. I needed to manage the project management system. But as a high quick start, low follow-through person, me and my business partner would set these tools up. We would manage them for a week and then we would get busy focusing on other things. And then all of those tasks that went into the project management system start to pile up and there's a million things overdue and the systems become useless. And then we say, okay, let's go start another project management system to get our arms around this. And what we realized was you don't necessarily have to become the person that managed that. You probably shouldn't, right? A true operations person is high follow-through. They like the details and they're the kind of person that will set those tasks up correctly and actually check on them on a daily basis, hold the line and make sure things get done. And so this was a major stress relief for me and my business partner Dean, recognizing you don't have to be the person to manage all of that project stuff, right? You can put people in place that excel at that and are going to do it much better than you can. Lesson number 14 is you need to build your leadership team. And you might hear that and think, okay, Josh is saying I have to hire people, right? We've said that a couple of times. Is that a repeat of the same thing? And there's a difference between having people on your team that do things and having a leadership team. A leadership team is the individuals that own specific functions within your agency. And so early in your business, you may be like, okay, I need someone to help with websites and SEO. So you got a web designer and you may need somebody to help with the SEO strategy. So you hire a couple SEO people. Those are doers, right? Those are people that are doing things within the business. In the absence of leadership, they're going to come to you and they're gonna say, hey, what do I do here? And how do I do that? And you're going to get bogged down with a lot of things that are coming to you. And if you don't recognize that difference, you will get stuck, you will get stagnated, and you will probably wind up firing the team and starting over a handful of times. When you recognize you need leadership in your SEO team, in your Facebook ads team, in your account management process— the best way to do this is by implementing EOS. Go read the book Traction, learn about the Entrepreneur Operating System. Recognize you need to have an accountability chart of the key functions within the business, and then you're going to place leaders in those roles. Now, let's say you've got an SEO process and something totally changes in the way that the, the search algorithm works. It wouldn't be you, it would be the leader of that SEO team that says, okay, here's how we have to change, here's how we have to adapt. And the entire team of people that kind of are doing that work would go to that leader, and they'd be responsible for developing that area within the business. When we recognized at about $3 million per year, that we had doers and we needed to develop a leadership team, that's when everything changed. Like, that's when we were able to create a lot of freedom within our lives and within our businesses. So be sure that you develop a leadership team. Last but not least, number 15 is that you must innovate, right? As you grow, as you scale your agency, there's gonna be change in the way you deliver and the way that you sell clients and the way that you retain your clients. There's no such thing as set it and forget it. Right? You need to be innovating on all aspects of your business, updating your processes, updating your approach, updating your strategy, because without innovation you will perish, right? So you have to be constantly innovating and taking things to the next level. And there you have it, the 15 biggest lessons I've learned after being in the digital marketing agency space for over 15 years and making tens of millions of dollars from it. If you focus on implementing these, I have no doubt in my mind that you'll see awesome results and avoid some of the costly mistakes that I made. Now, if you're serious about scaling to $1 million and beyond, we're currently offering a free one-on-one agency acceleration session where we dive deep in your business, identify the biggest growth opportunities, and craft a custom game plan to take your agency to the next level. Plus, we'll see if we can help you implement to get there even faster. To book your free agency acceleration session, click the first link in the description. And if you want my in-depth breakdown of the exact system we use to help 133 agencies hit 7 figures, then watch our free course video right here.