Last week I was interviewed by Mike Cooch from Digital Marketing Lab.
He interviewed me on how we were able to grow our agency to over $350K monthly recurring.
You can listen to the full interview by clicking below:
Be sure to register for the June Intensive using this link – https://sevenfigureagency.com/intensive-registration
If you’d like to learn more about Mike Cooch & his training program you can learn more by going to – http://getlvrg.com/blog/
Here’s the video transcript for your reference:
Hey everybody, it’s Mike Cooch with Digital Marketing Lab and Get Leverage. I am excited today. I have a special guest, Mr. Josh Nelson coming to us from Miami. How you doing Josh?
Doing great, glad to be here.
Awesome, glad to have you here. For those of you who aren’t familiar with Josh. Josh we go way back and Josh is a very successful agency owner, which is one of the reasons why I’m excited to have him here. He’s got a great business going and has executed that business I think as well as anybody that I’ve seen in the industry. I know that we can get a ton of great lessons from here and some cool experiences to share.
Well let’s go ahead and jump right into it Josh if you don’t mind here. If we could start. Just give us a little bit of bio on who you are and a start here as to what your business is all about and how you got it to where you are today.
Absolutely, so I run Plumbing and HVAC SEO. We’re a digital marketing agency for-
There you go.
Plumbing and HVAC contractors. Excuse me. We’ve been in business going on eight years now. Started as a generalist agency, decided the fastest path, probably one of the suggestions we got from you was to be niche focused, choose one vertical position ourselves as the expert in that space. We went deep in plumbing and HVAC, have grown to the point now where we’re about $4.5 million per year in revenue, got a team of 30 full-time employees.
We made the Inc. 5,000 list of fastest growing companies in the United States the last three years in a row, fingers crossed it’ll be four at the end of next year.
Yeah, digital marketing, serving a specific niche, and having a lot of fun while we’re at it. Thank you for your help. We were at the Six Figure Summit when I think we were doing $30,000 a month in recurring revenue and what we learned there really was a game changer for us.
That’s so cool. That’s great to hear, I appreciate it. Tell me a little bit… I know one of the first things that I get asked all the time when agency owners or perspective agency owners are talking to me is how do they pick a niche? Because that is an absolute… for me it’s a rule of success in this industry. I always tell people if you’re selling to small businesses you have to pick a niche and go for it and tailor everything around it as you guys have. How did you decide on plumbing and HVAC?
I think when it comes to choosing a niche you want to make sure that there’s enough of them, they have a propensity to advertise, they’ve proven that they spend money on advertising in one mechanism or another, and they aggregate together. Where you can easily say, “I want to get a list or I want to get into the association of people within this type of vertical.”
For us, the way we landed in plumbing and HVAC, my business partner Dean and I had ReachLocal, the big paper click management company.
We were here for about a year and we were seeing what all of the sales reps were selling into and where they were having success, and for us anyways it seemed like home services was a massive vertical that people were doing really well in. Then within home services it seemed like plumbing, HVAC, roofing, locksmiths seemed to do really well. We setup micro websites for each, and we started prospecting and reaching out, and just happened that plumbing worked well for us right out of the gates. We got a couple of local clients grateful [crosstalk 00:03:32].
Got some momentum going.
It was just off to the races from there. Let’s stay in this lane and let’s hit the gas.
Very cool. That makes a ton of sense. I think a lot of people don’t think that plumbing… maybe they think, “Oh, dentists make a lot of money and so they’re going to be a better client than plumbers,” but I think the plumbing industry one, I’ve known some really big plumbing companies that are super successful. I don’t know, maybe some of your clients are really nice sized. But two, as you said, I think that what a lot of people don’t get is that plumbers they spend money on advertising. They understand that they have to advertise and be out there. Back in the day you had the big Yellow Pages ad, and maybe they still do, but they understand that they have to advertise and get out there.
I think a lot of professions that maybe make more money don’t necessarily get that. A lot of dentists and doctors and things like that don’t get that. That’s cool, and so I see SEO, PPC, web design, and social back there. How did you determine what the suite of services is that you would offer them?
Yeah I mean for us we came from ReachLocal, which was all retainer based services, all $1,000 or more, so that was where our head was at when we started. Really we wanted to make sure we came in with a suite of services that was going to meet their needs and get a result for them. We felt like setting up a website, building it to convert, doing on page optimization and SEO to make sure it ranked organically, and then luring page search on top of that so we could drive leads and calls out of the gates, was the best solution.
Then social media, at this point anyways, is more of an add-on, more of a way to develop relationship. We decided let’s just come in with a comprehensive solution that we can charge a large monthly fee, and for us a large monthly fee at the time was $1,000 a month, which to some people that’s not a large monthly fee. That was the suite of services that we came to the table with and have tweaked it and modified it and expanded it as we’ve grown.
Yeah cool. I’m glad that you brought up price and what you’re charging per month or what you were charging per month because I would say even though you said $1,000 a month maybe isn’t a lot of money, the reality is the far majority of people that I talk to in the agency world that are selling to small businesses, their biggest hangup is still that you can’t get them to charge $1,000 a month for anything. They’re so afraid to put that kind of price tag out there, or they’re completely convinced that there is no plumber out there that’s going to pay $1,000 a month or more for my services, there’s no way. Plumbers don’t have that kind of money.
Tell me a little bit about pricing, the importance of having a price point that is at $1,000 or more, and maybe some of the misconceptions around pricing that you’ve seen and dealt with.
Yeah, no doubt. I mean I had the same issue before I started working at ReachLocal on my first agency was a total failure. I was charging a one-time website design fee of $500 to $1,000 and then getting $50 per month. I spent four years beating my head against the wall selling clients these low end programs. Of course there’s no way, you can never make enough money if that’s the way that you charge. I was fortunate enough to work at ReachLocal and see literally thousands of sales reps selling these programs between $1,000 and $5,000 per month to the local bricks and mortar business. It totally changed my idea of how a business model and an agency should run and what people would pay.
I was fortunate to see that and get that baked into my belief system. But I can tell you, if you don’t charge at least $1,000 per month it’s going to be really hard to grow and scale. First of all recurring is a must but if you don’t have that kind of feed, eventually when you look to say, “Okay, I don’t want to do this myself. I want to put somebody in place to do the SEO or to build the websites.” If you don’t have at least $1,000 per month you’re not going to have enough money to be able to do that. Even more so when you think, “I want to start to do some marketing to land clients and I need to put a salesperson in place to close these deals.” If you’re not priced accordingly you’re going to handicap yourself and really give yourself no potential for long-term growth in your business.
Yeah, I find that there are, actually across the board in just about any situation where you have a founder in place that’s also the initial salesperson, is that they never accurately account for the cost of sales and marketing because they don’t really account for their own time and separate themselves out.
They think it’s free, they think the sales is free right.
Yeah, and then the other thing is client services, account management. I mean it can cost an arm and a leg to take care of those clients and keep them around and keep them happy. There’s just overhead associated with that that can get expensive. It’s so important that people understand what a profit and loss statement looks like, and be able to put some numbers in there, step back from that, take themselves out of that and put some numbers in there and realize that they have to have the prices that will ultimately pay for all of that.
One of the most important experiences that you mention there, it’s so critical around entrepreneurial psychology, is that because you went and got a job where somebody else was telling you, “Hey, here are the price points,” and you have no option but to sell at those price points, you went and sold at those price points. Just the fact that you could see other people were doing it, all of a sudden make it okay and made it possible to you. I just think that’s a fascinating thing because the reality is so many I think particularly service entrepreneurs.
When you’re starting and the service is essentially you, you’re delivering some sort of service, then again the psychology is that there’s some self-worth issues in there and things like that that people get trapped in where they’re like, “Well nobody’s going to pay me $200 an hour or $150 an hour to do X, Y, and Z. When I was working at my last job I didn’t make anywhere near that much.” They get that all twisted in their head versus again, if you go to work for somebody that’s offering that exact same set of services and you see their model and learn their model and you have no choice but to do what the boss tells you for a little while and sell their pricing plans and stuff, can be a very eye opening experience.
Yeah no doubt. There’s a great book called the Secrets of the Millionaire Mind by T. Harv Eker. Have you ever read that one or are you familiar with it?
I’m familiar with it, I’m familiar with him, but I don’t know if I’ve ever read that book, which is shocking to me because I’ve heard of the book 1,000 times.
Fantastic book, one of my probably top five favorite books of all time.
In one of the chapters he talks about obviously to be a success and to build wealth you have to be in your own business, but you don’t necessarily have to go and start the business. One of his key tenants was enter the corridor by working in a company that does what you think you want to do. I latched onto that and I started looking for digital marketing agencies that were doing well, came across ReachLocal and that was… It worked out well because I learned what I needed to learn in order to go out and do it on my own.
That’s awesome. So cool, so you learned a ton from them, you started, you picked a niche, you created your packages, you’ve got them priced. At least back then they were at least enough to give you the margin to continue to invest in building the business. It sounds like you have continued to refine those prices over time just by some of the things that you said there, but tell me then what have been… If you could pick three things to share with people watching this right now that have been the major, I guess, turning points or factors that have allowed you to grow from you talk about the $30,000 a month when we first met to now, it sounds like around $400,000 a month. That’s a huge leap. Tell us what do you think are the three major factors in that?
I think the first is having a clear target market, that’s fundamental. Being in a niche makes everything easier, right?
It makes landing clients easier because you can go deep and position yourself as the expert and you get clients raising their hands. Also, and what people don’t usually think about is that it makes fulfillment easier because you’re doing the same thing for each client. In essence you can systematize it, you can put people, you can put systems in place, which makes it possible to scale as opposed to jumping into different verticals from one client to the next and trying to figure it out.
It hard enough with us with several hundred plumbing and HVAC clients to get the work done right, to follow through with the clients correctly, to retain those clients. I can’t even imagine how you’d do it if you had clients in every different vertical. That’s probably the number one.
Number two I would say being aggressive and putting systems in place to get clients to come to you pre-positioned to buy. We’re not in a case where we’re cold calling people and we’re trying to get them to give us two seconds of their time. We’ve positioned ourselves as the experts, so we wrote the book How to Triple Your Sales by Getting Your Internet Marketing Right, we put out webinars on a monthly basis that are in front of almost everybody in the niche, in the plumbing and HVAC world. Over time we’ve developed this process where prospects actually see us, are exposed to the value and raise their hand. They come into our world positioned to buy. I’d say that’s probably second.
Then third is constantly thinking about how you’re going to scale and how you’re going to grow. Not doing it all myself, there’s no way we could have gone from $30,000 to $370,000 per month, where we’re at now, if I was trying to do it all. Do the marketing, do the sales, do the fulfillment, do the account management. I’ve had to be strategic with what is this organization chart look like right now, what’s it going to look like in the next six to 12 months, and what positions do I need to start filling so that I can continue to focus on what I do best, which is positioning the company and going out and landing new clients. I’d say those are the top three.
That’s awesome. I think that those are a fantastic three. I think that that last one too, I just want to call attention to that, interesting timing just because I shared a post about that yesterday about how important thinking about growth is to actually achieving growth. It’s not the secret, it’s not any hocus pocus or anything like that, it is simply that if you’re not taking the time to get a clear vision on where you want to go and then think about what it is that’s going to get you there, I mean it’s common sense, it’s blocking and tackling. People get so caught up in the day to day that they don’t make the time to slow down and go, “Okay, what have I learned? What’s working? What’s not working? Where do I want to go? Given everything that I know and I’ve experienced, what tweaks do I think I need to make? Now let’s hit the ground running for another 90 days, sprint like crazy, and then stop and do that again.”
The stop and do it again it just doesn’t happen enough for a lot of people. It’s wild that one, I think stopping for any period of time, for anything these days, feels like a crazy luxury because there’s just so much going on, so much coming at you from all different angles, especially if you have family, kids, things like that. The other thing is, I think that it’s funny again to say, but I think just that thinking has been undervalued compared to just hustle. Just run, just do it faster, do it more, and both of those things have a place. I think that the thinking part of it is getting left out way too often. That’s awesome.
Fantastic, so I know just one other thing I’d love to hear from you on how you balance the… I know you have a family. How many kids do you have?
I have two kids. Two year old and a five year old.
Awesome, so you’ve got this very fast growing business and you’ve got you said 30 something employees to manage there, and then at home you’ve got obviously this family that’s very important to you, young kids that want a lot of time and attention and stuff like that. I’m curious how do you find, I don’t even know if balance is the right word. I tend to use work life integration and that type of thing to describe how I do it, but I’m curious how you approach that and maybe any major lessons that you can share around that.
Yeah, I’d say for me my business exists to support my family. I never put the business in front of spending time with my kids, taking my son to school, and even really doing my exercise and my fitness routine. I think all of that is integral to the success of the business and why the business exists, as opposed to vice versa. In terms of integration I think as we’ve grown, and I do have a business partner, Dean Iodice. As we’ve grown we’ve always taking the e-myth revisited thought process, which is how do I put people in place and put systems in place that way I’m not doing it all myself?
At this point we’re big followers of EOS, Entrepreneur Operating System, and we’ve been blessed to have a leadership team that’s put in place in each of the different key areas of the company. With the leadership team it takes a lot of the burden on you. If you have someone else accountable for the key areas in the company, and it really has given me the freedom to come in not crazy, crazy hours. Come in around 9:00 and leave around 5:00, 5:15 most days, and have free time to work on other passion projects that I’m excited about and working on. I think that’s what enables me to be there in the morning with the kids, in the evening before they have to go to bed, and have undivided time with them over the weekends.
Good for you, that’s awesome. I think it’s increasingly rare to see those kinds of boundaries and just very clear priorities, which is fantastic congratulations.
You mentioned other passion projects. One of the things that I wanted to ask you about I know that you have an event coming up for agency owners, right?
Yeah, if you wouldn’t mind tell us about that, tell us who would be interested in that, why they would be interested, and what they can expect.
Absolutely, so I’m a big time student of the game. I’ve been to pretty much all of the trainings and seminars and how to run an agency, how to build your business. And being a student of the game I really believe in the concept of, and I think we were talking about this before, learn, do, teach. You learn it, you do it, you get results with it, and then really when you start to teach it is how you internalize it, you make it really, really even stronger than ever. One of my passion projects is is what I call Seven Figure Agency where I just unpack what’s worked for us. How we land clients, what our business model looks like, how we retain clients and fulfill for them and get them great results.
I’ve got an event coming up right next to our office in a couple of weeks where we’re going to do just that. We’re going to unpack our business model. What’s the right model? How do you fulfill for the clients in a way that’s actually going to get them results? I spent a lot of time really unpacking how to land clients and that seems like where a lot of people struggle. How can you position yourself and put strategies in place to get clients? Not piece meal here and there, but three to seven new clients every single month on retainer, that way you can really grow and scale. Then the second half of it’s going to be how do you scale?
What we’re going to do is we’re going to come over, spend an afternoon at our office here in Doral, so that you can walk through our facility, meet our team, get a feel for what a scaled seven-figure agency looks like. Then unpack that in your business. What is the business organization chart look like today? Where are you going to need to hire next and how can you scale that model so that you can have the business that serves your lifestyle and gives you the ability to do what you really want to do?
It’s a two day workshop. It’s going to be in Miami a couple blocks from our office. I think it’s really best for agencies that are at that six-figure level and they’re looking to go to seven-figures and they just need to get clear on how to tighten up their business model, how to put the systems in place to get clients on a consistent basis, and then how to really scale to the next level.
Awesome, and what is the… I’m sorry, what were the dates on it again?
It’s going to be June 5th and 6th.
June 5th and 6th.
No I’m sorry, June 20th and 21st in Miami. I gave you the wrong dates.
June 20th and 21st. Okay cool, good. To be clear, you said that you’re going to unpack your business model and train your business model, but I don’t have to be in the plumbing and HVAC agency world. Any type of digital agency serving small businesses.
Exactly, if you’re running an agency and you’re thinking about how do you choose a niche, how do you position yourself as the expert, how do you scale, that’s really what we’re going to be covering.
Awesome, that’s cool. How many people? Is this a large event?
It’s going to be a small group. We’ve got a capacity for 50 people, so it’ll probably be in that 50 person or less territory so we can really get hands on and get a lot of productive work done.
Awesome, well I know, I can say for sure I’ve known Josh for years and years now in this industry, and like I said, he and his business partner have executed on this business as well as anybody that I’ve seen. I can also say, from my perspective, one of the best things that I’ve ever done and it sounds like what you’re doing is very similar, is I went to Jack Stack and The Great Game of Business in Springfield, Missouri. Jack wrote the book The Great Game of Business, one of the most influential books I’ve ever read on growing a business. He opened up his doors at his businesses to say, “Hey, come and sit through a classroom type of setting,” but then also like it sounds like you’re doing, “Come and visit our office and see how the operations work, see how this all comes together. Outside of just a classroom environment, outside just the theoretical, come and look at it.”
Just like you experienced when you went to ReachLocal, it can be such an eye opening thing to go and see oh, that’s an account manager sitting there, and that’s the SEO team, and that’s the PPC team, and you guys have a meeting and talk to each other. Just some of those things when you can finally see it and put those pieces together it can be so meaningful, just like that training was for me years ago, and I’m sure this training is going to be for many agency owners. That’s awesome. Now tell me what was it? It was learn, do, teach, is that right?
Learn, do, teach, yep.
I like that. I like that a lot and I absolutely agree with the benefit of teaching, it’s been huge for me. That’s where I learn the most and have to clarify what it is that I do actually know to be able to teach somebody so that’s awesome. Very cool, well anything else you want to add about that or where people can get information about that?
No, I mean absolutely. I’m sure Mike you’re going to have probably a link somewhere with this, where they can learn more.
It’s SevenFigureAgency.com is our company website where you can learn more about what we’re doing there.
Cool, sounds good.
We’d love to have you. I mean I’m passionate about helping digital marketing agencies grow and scale. I failed my first time through. I felt the pain and frustration of working 40, 60 hours and not even making enough money to pay myself. Now being on the other side of that where I’ve got a business that really is financial abundance, it gives me the freedom that I want. I want more people to experience that and I feel like I can help shortcut that for you, so that’s what this is all about.
Awesome, that sounds good. Well I definitely recommend any agency owners that are out there that fit that description, which I know that there are a ton of them. I would say from my personal perspective in having watched you, anybody that has not yet picked a niche or understood, really got their hands on how they can go deep in that niche in everything that they’re doing, from sales, marketing, product fulfillment, service fulfillment, all that good stuff. If you haven’t really just jumped down that rabbit hole then I would really highly recommend that you go and visit Josh and his business partner and learn from them because I think that’s something that you guys have just absolutely excelled at. The benefits are tremendous. I do believe that that is perhaps the most important factor in how you separate yourself from the pack and get that kind of growth that you guys are getting.
Awesome stuff. Well Josh thank you so much for being here. We appreciate it. Thanks for sharing your wisdom and your experiences with our crew here in this interview. Then also at that event coming up I’m sure it’ll be a great success and have a lot of impact on people. Thanks for doing that.
Thank you. Really appreciate you having me and appreciate everything you’ve done for me over the years.
Oh absolutely. Thank you and we’ll look forward to connecting here soon.
All right, good luck with the event. Take care.
All right, buh-bye.