Niche Down and Thrive

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When Joe Apfelbaum, CEO and Founder of Ajax Union, a B-to-B digital marketing agency that early on serviced over 1,100 with as many as 400 active accounts, realized he’d grown a business he didn’t want to run, he ramped down his agency. He defined his “ideal customers”—those who were investing in the top of their funnels, valued strategy, and understood the value of nurturing the lead from the top of the funnel to the bottom line. His tips? Pick a niche, go deep, and have a solid strategy. The results? Massive.

 

Ajax Union runs a Digital Marketing Strategy Bootcamp that teaches people a step-by-step digital marketing strategy. Joe emphasizes the importance of using and understanding your product ladder—a range of services and prices that will meet the needs of different clients. Offer free value at the front end, and increasingly higher-priced, higher value products for clients who “grow into them” or new, larger clients that you may onboard if you have the products that meet their needs. Strive for a backend ladder of $10,000 a month and then eventually grow that to a million dollars a year.

 

Joe notes that there is a lot more to building a business than making money and trying to grow. He says, “You have to be able to be profitable. You have to have a lifestyle. You have to take care of yourself. You have to be there for your family.” About the time he figured out how to make his company healthy, he lost 95 pounds, kept it off, and wrote a book about it: High Energy Secrets: How to Have More Energy than Ever.

 

Joe can be contacted on Linkedin at Joe Apfelbaum, on his website at: http://www.joeapfelbaum.com/, (where you can also order his book, High Energy Secrets: How to Have More Energy than Ever), or you can register for his Digital Marketing Strategy Bootcamp at: http://www.onlinemeetingnow.com/register/?id=tcjts4au6o

 

ROB: Welcome to the Marketing Agency Leadership Podcast. I’m your host, Rob Kischuk, and I am joined today by Joe Apfelbaum, CEO and Founder of Ajax Union based in Brooklyn, New York. Welcome, Joe.

 

JOE: Thank you so much for having me, Rob. This is exciting.

 

ROB: Fantastic to have you here. Why don’t you start off by telling us a little bit about Ajax Union and what makes Ajax Union great?

 

JOE: Ajax Union is a B-to-B digital marketing agency based in Brooklyn, New York. We’ve been around for 10 years, serviced over 1,100 clients. We had the fortune of being on the Inc. 5000 many years ago as one of the fastest-growing companies. We were #1 in ’07 to ’08.

 

We grew our company really, really quickly, and we serviced so many clients that we realized that we had to niche down and figure out where our niche was going to be. We came up with this amazing competitive advantage: we get things done.

 

Our focus is B-to-B companies, and what makes us amazing is that we have a great group of people. Ultimately when you’re dealing with an agency, you’re dealing with people. You need to figure out what their competitive advantage is. You have to figure out what their values are. If their values match your values and if their competitive advantage matches what you value in an agency, then it’s a really good fit.

 

It’s not a good fit for everybody, but it’s a good fit for the right clients. We’re looking for amazing clients and amazing employees so that we can create amazing results. That’s what we’re after.

 

ROB: Fantastic. In the process of getting up to 1,100 clients that you serve, what was the peak concurrent number of clients you had? Because that sounds like it must’ve been quite a thing.

 

JOE: Yeah. The peak was close to 400 clients at one given time. We had 75 full-time people, 400 active accounts. I looked at the business and I said, this is not the business that I want to grow. We were dealing with a lot of different companies in a lot of different areas, and we were adding 50 new accounts.

 

An agency coach once said to me, “Joe, every account you get is an account eventually that you’ll lose.” Every single account you get, eventually you’ll lose it. I felt terrible very time we would lose an account. Most of the time it was because they went out of business. I don’t know if you know this, but most businesses go out of business within 3 years, and the rest of them within 5, and almost all of them within 10.

 

So, I was feeling terrible that people were leaving, kind of like when somebody hits the “Unsubscribe” button. I used to feel so terrible. Now I celebrate. I’m like, finally, somebody that didn’t want to get it finally doesn’t get it.

 

I had to figure out, where do I want to take my business? So, I started doing research—I’ve been part of Entrepreneurs’ Organization for many years, and that was the year that I joined EO. I started asking other members of Entrepreneurs’ Organization, “What are you doing?”

 

They were all like, “When we got to 100 clients we stopped the growth and we started focusing more. What? You serviced 1,000? You’re nuts! You’re crazy! What are you doing? Get rid of most of your clients and just service the ones that are most ideal.”

 

That’s essentially the journey I had to go on.

 

ROB: When you looked at the range of clients, what were the common traits of clients that looked like amazing clients that would form the future niche?

 

JOE: The future niche were companies that were investing in the top of their funnel. They understood that investing in marketing is not about just getting clients that are ready to buy so that you can make money today, but investing in your future and valuing strategy. There’s a lot of companies out there that don’t want to do strategy because they think strategy and meetings are a waste of time.

 

Well, I say that energy without strategy is a total waste of time. If you want to be pointed in the right direction, you need to spend twice the amount of time measuring and only cut once. But often entrepreneurs like shooting from the hip—ready, aim, fire.

 

Instead of doing that, we’re like, take a step back. You need to have a marketing director. You need to have a sales team. You need to value strategy. You’ve got to have the right assets. Then we can actually help market your business, and if you don’t have that it’s not going to work.

 

We found a lot of B-to-B companies who were into that because they had to invest long-term. They understood the value in acquiring the lead and then nurturing the lead from the top of the funnel eventually to the bottom line. So those were the companies that we started really focusing on, and we started seeing some massive results with those types of companies.

 

ROB: Joe, I love how you so quickly breezed straight through basically an entire B-to-B marketing funnel with such speed but clarity, going from awareness through to understanding what it’s worth to you. I think it shows a great command for that process.

 

JOE: We have to be able to do it for our clients, and we have to also teach it. We have something called the Digital Marketing Strategy Bootcamp where we literally teach people step-by-step process for doing digital marketing strategy.

 

That was our biggest pain. Our biggest pain with our clients was that they didn’t have a strategy—our worst clients didn’t have a strategy and they didn’t value investing in creating a strategy. A lot of people think that a strategy is just built-in. They’re like, “Do some SEO for me!” “But we got you to the top of Google and you still went out of business.”

 

ROB: [laughs] Yep. If we rewind a little bit before the time when you had too many clients, what led you to start this company in the first place? What led you to decide to start an agency?

 

JOE: I wanted to make a difference in other people’s lives. My mother had a store in the Lower East Side for many years, and I watched her try to grow her business, and she couldn’t make it. I was like, “I’m going to figure this baby out.”

 

I was a freelancer, building websites for people, doing IT services, all types of stuff. You know the saying, “If you build it, they will come”? Ever heard of that?

 

ROB: Mm-hm, Field of Dreams.

 

JOE: I built it. Nobody came. [laughs] I had to figure out how to market it. So, I started marketing it, and then I heard this concept of reoccurring revenue and I was like, “Oh my gosh, I’m in love with reoccurring revenue. I only have to close the client once, and then forever and ever and ever they’re a client? That’s amazing! Oh my gosh, that’s where I need to be!”

 

I realized that with web design, you don’t really have that reoccurring revenue. Sure, with the hosting and all that stuff—that’s just annoying reoccurring revenue. I wanted exciting reoccurring revenue where you’re growing with the client and they’re taking things to the next level.

 

I had to figure it out. So that’s the idea, that’s the thought process. That’s what happened.

 

ROB: I think that’s a great point. The reoccurring revenue when you’re providing something like hosting and those really simple ongoing services, it almost misaligns you with the client a little bit.

 

Maybe you’re making a little bit of markup on hosting for maintaining that relationship for them, but you’re talking about how to drive value for them on a monthly basis—but also not to do that on a strictly transactional basis, right? People want leads, but it’s not just “Are you a lead machine, Joe,” and “Can you give me more leads per dollar than the next guy?”

 

JOE: It’s about building a partnership, about having a relationship. Another marketing agency owner once said, “Joe, you’re not going to be able to make a business really succeed. You’re going to be able to help them on their journey for success, but ultimately they’re either going to succeed or they’re going to fail.”

 

I don’t care how good your marketing is; if you have a crappy business, you’re going to go broke. A business, to be successful, takes a lot more than just getting traffic into your house. It takes a lot more than just getting qualified leads. You also have to service the leads and have a good reputation and build your business and have cash flow and all the things that most people have no clue how to do.

 

But we’re not here to coach people on their business. We’re here to help them with their strategy, and if they don’t have a solid foundation as a business—you can have the best marketing ideas in the world; it’s not going to help you grow your business.

 

ROB: It sounds like you have learned a lot in a relatively quick amount of time. Sometimes, it can probably feel like forever, sometimes it feels like a moment. What are some things you’ve learned from your experience in building Ajax Union that you would do differently if you were starting over?

 

JOE: The first thing I learned is, number one, have a niche. Have a niche. Be very focused. For me, I thought it was niched enough for me to be doing SEO for small businesses. I thought that was a niche enough.

 

But no, it was not a niche enough. If I were to go back and do it again, I would pick a specific type of business, a specific industry or a specific vertical. I would pick ecommerce, or I would pick specifically ecommerce on Shopify or whatever it is, and really go deep with that. There’s plenty of money to be made, but the problem is everyone’s trying to be general, and the more specific you can be, the better off you are. That’s Tip #1.

 

Tip #2 is understand your product ladder. For me, I just had the front of the ladder, which was just a newbie plan, which is articles, blogs, classified ads, and SEO product for small businesses. I didn’t really understand the back of the ladder. I didn’t build up the back of the ladder.

 

After 1,000 clients I realized, “Oh my gosh, somebody wants to spend $45,000 a month with us; what the hell do we do?” I was just basically like, that’s it, we’re taking clients on for a few hundred dollars a month and we’re done. That’s all we’re offering. What I didn’t realize is that that’s not sustainable unless you have a really big backend.

 

Your backend needs to go to $10,000 a month, and then $20,000 a month, and then to $50,000 a month, and eventually to a million dollars a year. That’s how you can afford to take on a client that’s spending a few hundred dollars a month with you and lose money on them, because a certain percentage of them will be able to go up your product ladder to the next level. I didn’t really understand the whole concept.

 

The third thing is having a solid strategy. I didn’t value strategy back then. I was more about execution. I was like, “I’m a get-it-done guy. Let’s just get it all done. Let’s just get started. Why wait? Let’s just pick some keywords and rank on Google. Let’s just send some traffic and call in the cavalry!” Anyway, that’s where I went. [laughs]

 

ROB: [laughs] That’s perfect. I think the product ladder is applicable across business. Someone who does a tremendous job of this is Disney. Disney, you can do everything from buying a Frozen t-shirt at Target to going to their theme park and spending, to your point, a huge amount of money for a behind-the-scenes VIP tour and kind of the all-you-can-eat plan. That’s hard sometimes for us to think about when we’re building a business.

 

I think it’s a great point that you make about the product ladder. It’s something we can learn in any industry that we’re in, and I think a company that does a great job of this that is not in that much B-to-B is Disney because they have a product that goes everything from a $10 t-shirt or a sticker pack that you can buy at Target up to a very bespoke and expensive version of a Disney vacation at their theme parks for your whole family.

 

Shifting from Disney, you’ve talked about your focus, your niche, what you do and don’t do. How do you restrain yourself? Let’s say Disney shows up tomorrow, they’ve got a couple million dollars a year and they say, “Joe, we just need a bunch of consumer marketing.” What are you going to do?

 

JOE: Well, what we’re going to do is find people that can support us. Just because we’re B-to-B and somebody reaches out and wants B-to-C marketing, it doesn’t mean we can’t take them on. That’s number one.

 

ROB: How do you do that without getting away from focus?

 

JOE: As long as they want the same things that we’re doing for the other clients, then it’s okay. We’re experts at all types of marketing, so as long as they’re valuing lead generation, as long as they want to use the same tools and they’re not completely taking us out of our game.

 

If you’re creating a digital marketing strategy and you’re creating certain assets, and then you’re executing that strategy to drive traffic, it doesn’t make a difference if it’s B-to-B or B-to-C. It doesn’t make a difference. What matters is what tools are you using and what is the strategy and what are the assets that you need to create.

 

As long as you’re using the same tools and the same assets, it’s fine. But obviously we’re not going to advertise, “Hey, we happen to be doing Disney’s B-to-C now.” We’re not going to go after that type of business. If you go to our website it’s very, very clear that we’re going after B-to-B companies, and 90% of our business is B-to-B right now.

 

But if we have a relationship with someone that’s willing to spend what we charge for an agency client and they’re B-to-C, as long as we’re capable of doing those things that they need us to do, we’re willing to take on the client. Especially if they’re the right partner.

 

ROB: I think another interesting challenge that people face when building an agency, especially when you’re talking about having all those clients at once, a compromise that we often make is on lifestyle. What was your experience in terms of the company you wanted to build and how you wanted to spend your time and your lifestyle in the middle of that really busy, lots of clients, lots of people season?

 

JOE: For me, lifestyle wasn’t a thing. It didn’t really exist. I didn’t understand lifestyle. I didn’t hang out with other entrepreneurs. I was busy in my business 24/6 (because I keep Shabbat).

 

But I was literally busy in my business, doing my thing, and totally just paying attention to my business. I didn’t think about going on vacation. I was 265 pounds. I was extremely overweight, I was not exercising, I was overeating, and I was just focused on trying to make money. That’s what my focus was.

 

When I joined Entrepreneurs’ Organization and I joined Vistage and I joined a bunch of other organizations, I started seeing that there’s a lot more to building a business than just making money and trying to grow. You have to be able to be profitable. You have to have a lifestyle. You have to take care of yourself. You have to be there for your family.

 

So, I completely changed around my attitude. I also realized that I’m just in a rush to make it, and I’ve got to slow down because I’ve got the rest of my life to make it. I literally have the rest of my life, and I’m moving too fast. I’m going to crash.

 

ROB: Are there routines that you now have in your daily life that make this an easier balance? Are there ways you’ve changed how you lead and how you operate the company?

 

JOE: Absolutely. First of all, I wrote a book called High Energy Secrets: How to Have More Energy than Ever. That’s how I lost 95 pounds and kept it off. I always tell people, you have the power to change your life. The first step is to decide that you’re ready to begin the journey and learn the things that you need to learn, and it starts with your mindset.

 

For me, there are 7 reminders that I think about every day—and I wrote this in the book, so I could literally turn to page 30 in the book and go through this. Every single day, every single day I’m thinking about these 7 reminders.

 

The first one is to measure. You have to figure out what you want to measure. If you want to improve something, you’ve got to measure it. This applies to my business, this applies to my health, this applies to everything. I became obsessed with measuring my goals and making sure that I’m measuring what I want to focus on. If you don’t measure it, you can’t improve it.

 

Number two is water, because a 5% drop in hydration is a 30% drop in energy. I used to go to Costco and buy licorice and a bunch of other garbage so that I could sugar up my employees so they could have more energy. But I learned that water is what gives you energy, because water leaves your body with every breath you take, and you’re 80% water.

 

You need to be sipping water every single hour, and if you don’t drink water you become weak. Water and air are the most basic things we need to live, and if we don’t pay attention to our basic needs, we suffer. So number two is water.

 

Number three is appreciation, gratitude. It’s kind of like what’s going to nurture you. I focus a lot on appreciation when we do our huddles. Whenever we connect as individuals, we talk about what we’re grateful for. I show employee appreciation, both individually one-on-one in person, but also through Gchat and sending emails, showing everybody appreciation.

 

Number four is communication. I never had meetings. I thought meetings were a waste of time. I always think about how I can communicate and express myself and allow my employees to communicate and express themselves.

 

Number five is learning. Every single day, I’ve got to be learning. If you’re not learning, you’re not growing; if you’re not growing, you’re dying. So figure out how you can learn. There’s a really great app called Blinkist where I’m constantly learning about health, about wellness, about marketing, about business, about the market, about things that I can then leverage and go out and teach other people.

 

Number six is contribution, because if you’re just doing it for yourself, you’ll never be fulfilled. Never. Maybe you’ll be satisfied, but you’ll never be fulfilled.

 

The only thing that really fulfills me is contributing to others, and that’s why I coach entrepreneurs and that’s why I help other people that have smaller agencies and smaller businesses, and I guide them along the way and I do all this thought leadership and I get onto podcasts—because I am hungry to contribute and to give to other people.

 

Finally, the seventh one is something that I never really paid attention to, which is being present. Being present is one of the most important things that you can do because so many people are just sitting around, and they’re so busy getting sucked into the day-to-day that they don’t give themselves the greatest gift, which is the gift of being in the moment.

 

I know it sounds cliché, but it’s something that gives me a lot of value as a daily reminder. It’s so easy to get caught up on where I want to be tomorrow, or maybe where I was yesterday. I forgot that I am here in the now. There’s no such thing.

 

So if you’re eating, put your damn fork down for a hot second—I mean a full minute, not a second—and savor the food that’s in your mouth. The other day I was eating pizza. (Yes, believe it or not, I lost 95 pounds and now I can eat pizza.) I realized I was just gobbling it down.

 

You’ve got to take a moment. You need that reminder to just enjoy the company that you are with, the business that you are doing. Take a deep breath and feel your surroundings. Get out of your head, because if you’re in your head, you’re dead. That’s what I’m saying.

 

ROB: That’s great advice all through there, those seven things. I found your book very easily on Amazon. If you google “High Energy Secrets,” you will find Joe’s book very quickly. That’s awesome. I love that mention to be present. It is so easy to get caught up in the calendar of what’s next.

 

You mentioned Blinkist. That’s the app where you can basically listen to a very good summary of a book rather than the entire book, right?

 

JOE: Yeah. It’s not to supplement reading a book, but let’s say you want to get a reminder of How to Win Friends and Influence People or you want to get a reminder of Think and Grow Rich or The 7 Habits of Highly Effective People or The Miracle Morning or Getting Things Done or all these classic books that are so powerful, that are great reminders of how we need to be living our lives.

 

You don’t need to read the whole book over again (although I do recommend having a top 10 books of all time and studying those books every year). You don’t need a million books. You don’t need new ideas. You’ve just got to do the things you already know you’ve got to do.

 

Whether it’s Traction or Scaling Up that you want to read and master, read it 10 times and master it and implement it in your business.

 

An EOS coach recently came over to me and said, “Joe, how’d you implement EOS in your company?” I said, “One chapter at a time.” Meeting with my team. You’ve got to take one chapter, master it, and meet with your team about it and have time on the calendar. Otherwise, hire an implementer and they’ll force you to do that. Spend $60,000 and get an implementer or do it yourself.

 

ROB: Right. EOS is Entrepreneurial Operating System, right? Something to that effect?

 

JOE: Yeah.

 

ROB: In EO, in the Accelerator that we’re in, they have quarterly Learning Days right now. People who are just joining will say, “Why do I need to do the same Learning Day that I did last year again?” The simple answer, quite often, is you’re going to experience that completely differently a year later. There are different habits, different things you need to implement in your business.

 

JOE: Yeah. I love having conversations with Accelerators. When they say, “Joe, why should I read it again?”, I say, “Are you doing it?” And they say “No.” [laughs] I say, “[duck quack noise] Go and do it.” That was a duck.

 

ROB: [laughs] I was wondering where you had the sound effects on the fly. We don’t have anybody on the soundboard cranking those out. That’s awesome.

 

JOE: Actually I have a little duck, and when somebody says something like that, I’m like, “All right, let’s ask the duck what their opinion is.” [duck quack noise]

 

ROB: [laughs] Amazing. Joe, what are you excited about that’s coming up for Ajax Union or for, more broadly, marketing in general?

 

JOE: For Ajax Union and for marketing in general, I’m really excited to see where LinkedIn goes. When Microsoft bought LinkedIn for $26.2 billion, they’re changing it from an HR play to a content marketing play.

 

I’ve been studying LinkedIn for the past 3 years, and specifically in the past year I’ve really gone very deep on LinkedIn. My goal is to have one million connections on LinkedIn. People don’t even know how I’m doing that, but I’m a growth hacker, I’m a gray hat marketer, so I do things that are a little bit different than most people to try to get results.

 

People are like, what’s LinkedIn? LinkedIn is kind of like your personal brand, and more people are becoming more authentic and more real and more connected. If you want referrals from your network, if your business thrives on referrals, the place where you get referrals is by being active on LinkedIn—by having an optimized profile, by being active and engaging, by commenting and posting, but most importantly by leveraging articles and posts and media like video, audio, and all this type of stuff.

 

If you do this correctly, if you do it based on a strategy, you’re going to get more referrals than you can handle from your ideal client. There’s half a billion people on LinkedIn, and the average CEO has 930 connections. The problem is, they don’t know who those people are, and they’re not properly connecting with those people in a meaningful way.

 

So, I’m looking forward to building a strategy called the LinkedIn Authority Blueprint, implementing it, and supporting people that want to be able to do LinkedIn the right way and ultimately go from being a lurker to an influencer. And that’s where we’re at.

 

ROB: That LinkedIn strategy sounds pretty fascinating. It sounds like—is that maybe your next book?

 

JOE: It’s possibly my next book. But before I make a book, I’ve got to make a rap:

 

If you want a hint, it’s called the LinkedIn Authority Blueprint

’Cause I never make you squint

It’s called the LinkedIn Authority Blueprint

It’s kind of like a hot car with a tint

 

I’ll make you so much money, you’ll start to smell like mint

You got the influencer status

’Cause you’re such a badass

’Cause you’re the maddest

 

You used to be a lurker, you had haters and jerkers

Thinking that you’re funny, but now who’s laughing?

’Cause you’re making so much money, you’re an authority

 

And my name is Joe and I’m the LinkedIn pro.

Working together, your connections grow

500 million people waiting to connect

We work off this playbook so we can beat the wreck

 

We got this cool dashboard so you can track it all

We have a good time so your prospects never stall.

 

That’s what we do.

 

ROB: Well look out, Jay-Z, because Joe-A also has the blueprint. [laughs] That’s amazing.

 

JOE: Seriously, we’re making your connections grow. That’s where we’re at.

 

ROB: Joe, thank you for taking the time to talk about your own journey, for sharing your rap, and for sharing your high energy secrets. I think there is a lot to learn from here, as well as that focus and that niche and what you’ve learned from that. It has been a pleasure to have you on.

 

JOE: Oh my gosh, thank you so much. For anyone listening to this, if you want to find out more information about me or the LinkedIn Authority Blueprint, how to go from a lurker to an influencer, check me out on LinkedIn. Joe Apfelbaum is my name, and you can easily search for me and find me.

 

Thank you, Rob, for having me. This was a really great episode.

 

ROB: Thank you so much, Joe. It’s been a unique and pleasurable experience. Thank you.

 

JOE: Yay!

ROB: Thank you for listening. The Marketing Agency Leadership Podcast is presented by Converge. Converge helps digital marketing agencies and brands automate their reporting so they can be more profitable, accurate, and responsive. To learn more about how Converge can automate your marketing reporting, email info@convergehq.com, or visit us on the web at convergehq.com.

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