2024 – Transforming Client Acquisition in the Agency Landscape with Hydra’s Joshua Johnston

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1:05With us right now, it's Joshua Johnston. Always love having a fellow Josh on the show. Josh, you are the founder of work with, or you're the founder of Hydra, not the Hydra from the MCU. It's the good Hydra. Your website is workwithhydra.com. It's great to have you, Joshua. Yeah, great to be here, man. I'm super stoked to have this conversation today. I've been looking forward to it all week. Yeah, great. Well, give us an overview of what the good Hydra does. Yeah, absolutely. So kind of zooming out, let's go 30 ,000 foot view for a second. I had the opportunity to step in as a chief operating officer of a digital marketing agency back in 2017.

1:45Had the opportunity to build, grow, and scale that business to multiple seven figures. And then our business ended up getting bought out by a venture capitalist firm in 2020, kind of peak pandemic. And when I stepped into that space, I knew nothing about being a COO. I was like a glorified social media manager. just had a fancy title of being a COO. So as our team started to grow, as we started to get more market fit, we grew exponentially fast. So I had to learn a ton about being an operator and an integrator for a business that really I had no clue how to run and operate. And so for me, it was a very big learning curve for me, but stayed really diligent in that and ended up being a pretty decent COO, I would say.

2:27And we grew that business relatively quick and exited within two and a half years. So from that, I took that experience. And after our exit, I started consulting one-on-one with other digital marketing agencies because they were curious about our operational efficiency, how with only 30 people, we were able to generate multi-seven figures in revenue every year and have really good profit margins doing it. And so I took a lot of those concepts and I started consulting one-on-one with agency clients. And then eventually we turned it into a whole program, started working with different levels of agencies, anywhere between the high six-figure and eight-figure type agencies.

3:04And our whole goal for those agencies is to, one, either get them in a place where they have very profitable agencies, where they can cash flow effectively, take that cash flow and then invest into maybe acquiring other agencies. Maybe they want to get into real estate. Maybe they're Bitcoin nerds. Who knows? but they invest that cashflow into other opportunities to help them grow. And then the other side is the acquisition side, right? Is being able to take their agency and undergo a successful acquisition and getting the highest multiple possible for their agency. So that's kind of what we exist to do.

3:37We bring in operational infrastructure into agencies, whether that's lead gen systems, sales operations, fulfillment operations, HR functions, and then a really healthy financial picture of the business. And so we kind of wrap all of that up into consulting or like done for you type build outs for those types of agencies. So that's kind of what I'm up to today. Well, that's really exciting. And I hope that you and I have the opportunity to chat afterwards, just given kind of our role in that kind of a world. But do you mind maybe sharing a little bit about, you know, specifically when we're thinking about the agency world, what do you see working well for client acquisition today?

4:18And I would assume if we're talking agencies, you know, obviously there's kind of the Ascension model, low ticket to high ticket, like there's that. And then there's the folks that are doing just straight up more account-based sales. What do you see working well in that world for folks that are selling maybe a little bit higher ticket engagements, you know, your two to 5 ,000 or $8 ,000 a month type services or larger project type things. Yeah, absolutely. There's so many different routes you can go with client acquisition. But the first one that we just make sure we have checked off is an actual referral system.

4:52And I'm not talking about a referral system that is like, hey, do you know of anyone that might be interested in this service? We'll give you a 10 % of this contract. We actually want it to be an engaging referral partnership where, you know, hey, maybe they get a discount on the services that they utilize with you, or maybe they get a really nice bonus check every single month that is a little bit more than 10%. A lot of that is knowing your numbers extremely intimately and being able to say, what can I actually give to my referral partners that will get them excited and actually have them go hunt deals for me?

5:26And the way that we kind of structure referral deals nowadays is that we almost treat them as like a sales development rep for our company. And so we actually have them sign a contract with us and we say, hey, here's the different tier levels of when you when you can start earning more with us. So we always start with tier one, which is like, hey, a thousand dollars per referral. Now, this is our internal structure. These economics make sense for us. So don't blanket template this, but use it as kind of a guide or maybe some inspiration for yours. but a thousand bucks. Now, Hey Josh, if you leave me a LinkedIn review and a Google review, I'm going to add an additional$500 to anyone that you refer to me.

6:06And then we have a second tier that after you make a referral to us, you're, we're going to increase that payout another$500. So now your referrals are worth$2 ,000. And then from there, we're going to go to a third tier that if you do a case study with us and leave us a testimonial, we're gonna increase that another thousand dollars. And so now we're kind of gamifying the process of getting referrals in and we're starting to sweeten the pot to get things that one, we want in return, right? Because everyone loves case studies. Everyone loves testimonials. The more social proof you have, that is what gets people kind of to trust you.

6:44And in a marketplace where there is a lack of trust, you need all the social proof that you can get. all the people that have worked with you, yeah, like we need testimonials from them. We need case studies from them because once again, there's a lot of people competing for the same type of client. And so if you can be the person that has the most testimonials, the most case studies, the best reviews, then chances are they're going to roll with you. So that's kind of how we've started to think about our referral structure. And I think if you're looking for the clients that are going to be the best fit, going to have the warmest introductions, it really revolves around a really solid referral structure and a referral process.

7:18So that's one. Yeah. You know, what I'm fascinated by is how much you are valuing the reviews, testimonials, and case studies. That's the first thing I'm fascinated by. And then the other thing I'm going to want to talk about, if you want to talk about the value of that and why that's so critical today, that would be great. And then part two of that is I'm hoping maybe you could share about the, no, no, no. Let's just talk about that first. I'll get into the other thing later. Okay, cool. Yeah. Well, you know, once again, there's a lot of mistrust in our industry. Currently there's a bunch of agencies and I'm speaking specifically agencies as the niches, the group of people, but I think this applies to really B2B in general.

7:59There's more and more online businesses now than there ever has. And some people are rock stars. They absolutely deliver at the highest level possible. They can actually deliver the results that they say they can, But then you have this other group of people that they saw, oh, I can make fast money doing this. I'm just going to do it and start it on my own. And unfortunately, they can't deliver the results, but they can funnel hack and they can speak the same language and they can take all of your copy from your website and they can apply it like a blank template into what they're doing. And so for us, we have to have these differentiating factors in the marketplace now because currently we can't tell the difference just from looking at someone's website, who the real ones are and who the fake ones are.

8:41And so for us, we push social proof so heavily right now because we have to stand out as the market leader. And I think if you're not represented as a market leader in your space, there's some room for improvement there because I don't want to be compared to the people that can't get the result. I want to be known as the people that do get the result and we're the best in the space. And when you have that type of trust and rapport, I mean, your sales calls are a lot easier. You know, I take sales calls all the time. And when people get on the phone with me, they've watched my YouTube, they've watched LinkedIn, they've seen my results, they've seen my case studies, all of this information around me.

9:16And I have way more trust coming into that conversation than someone that doesn't have those things. And so when you have a skeptic on the phone with you and someone that's like, well, will this actually works? I've tried the other guys and it didn't work. What's different with you? Well, here's the proof, right? Here's all the case studies. Here's the testimonial. This is why people are loving what we're doing with this company. So that's the take that I have with it in pushing that social proof out. I think it's more important than ever to be the market leader in your space for whatever niche you're going after.

9:49Third-party validation beats conversation. So always, always. Josh, the other thing, aspect of this that I wanted to get into was referral partners. So it's very, very common to find people that they like, let's say they have an SEO agency and they want to really grow that SEO agency. Why would they take time out? And again, maybe you could just be a little bit more specific about who these referral partners are, because I see a lot of people wanting to grow their own thing. That's really common. But who are the types of folks out there that have recognized that you can do exceptionally great business by sending referrals?

10:37Yeah, absolutely. So I think the misconception is that your referral partners are typically your clients, right? And don't be wrong, our clients are some of our best referral partners that we have. They're excellent. But there's a lot of other people who talk with, who sell to your ideal client profile that aren't competitive with you. So we look for people outside of just our clientele to bring us leads. So for me, I might go to a SaaS company. So for an example, like ClickUp.com, right? So ClickUp project management software, they're very well known to have a good grasp and inside of the agency space.

11:14Well, they're not competitive with me. They're not doing consulting inside of that space. They're not competitive. And so I have a really great relationship with one of the founders, Chris Cunningham. And him and I, we jam all the time. He sends us referrals all the time. And he's one of those people that he's outside of our clientele, but he's a great referral partner for us because we're not competitive. And so I'm looking for people outside of that. And for us as well, it's like you look for other CMOs, you look for people that are having touch points with your ideal clientele, but aren't necessarily a direct competitor.

11:55So say you were running like an e-commerce agency, you're running creative and paid ads as your service. Well, maybe I would go to like a retention agency or maybe a packaging distributor who helps with the 3PL side of shipping out all of the e-commerce stuff. Well, they work with the same clientele we do, but it's a totally different service. And so for us, we're not competitive. And so I'll send people to a 3PL service from my e-commerce clients, and then their e-commerce clients get passed back to us. So it is a relationship that works two ways, not just one way. Yeah. Yeah. So if someone is struggling with knowing who those partners are, I mean, I mean, that sounds brilliant, right?

12:43If I'm an agency and I only have to pay for client acquisition when I close a deal, I mean, it sounds like the perfect system. I'm just wondering if there are folks that have maybe kind of gone down that road. It hasn't really executed successfully. Maybe they just, you know, again, they're hard. they're maybe struggling getting the traction of their referral or partner program. Yeah, yeah, absolutely. I have a quote that I share with my team all the time. I share with my clients as well that you have to be in the right rooms. Being in the right rooms is one of the most important things, I think, in business today, that one-on-one interaction.

13:22So see what events are coming up locally, even if it's not locally. I fly out to events all the time. I put myself in the room with those types of people. It might not be a directly correlated event, like an agency event, but I'm going to go and I'm going to put myself in front of other vendors. I'm going to have conversations with people. I'm going to hop on podcasts with people that are, you know, in a similar space to me, see if there are any, you know, good connections I can make and see if we can't do business together. Right. It's like at the beginning of this episode, you're like, Josh, like, I think there's some, like, there's something here.

13:53Like there's a connection here. I think we can figure something out together. It's like, yeah, absolutely. But You don't do that by sitting on the sidelines. You got to get in the game, right? So for me, that's what I do a ton of to build those referral connections and to build people in the space and build my reputation is podcasts, try to do them every single week, hosting my own podcast. I'll invite people to my podcast and try to get them online, share my audience with them, right? And so it's kind of, once again, that two-way street where you got to put yourself out there. You can't expect people just to come to you.

14:26Yeah, yeah, absolutely. It's, you know, again, most high level leaders that I have the opportunity to talk with, they spend lots of time, or they spend more time with fewer people. I mean, they're still always attracted. So they're maintaining consistency in that. But, you know, rather than casual social media connections, it's about deep relationships with high level leaders, like, you know, leaders that like each other, will move heaven and earth to do stuff together. Like if they like each other, they're always going to explore ways. How can we help each other? Like that is just normal. Those are the conversations that take place in the green room and the VIP lounge and the speakers lounge, you know, it's those big collaborations.

15:08And, and I think that, you know, earlier stage business owners might feel a little flummoxed by that. And like, I don't get it. Why are those guys always doing big deals? And, and I don't, and it's exactly what you shared. Like they're really working hard to build key relationships. We, I love the term whisper network, right? It's just, it's not flashy. You're not doing TikTok dances out to drum a business. You just quietly behind the scenes, having quiet conversations. Like it's not flashy and showy, but that is where the big deals get done. Yeah, absolutely. And you can do it locally as well.

15:42Like I'll host Cigar Nights. I'll just post on my story. Like I have a decent following here in Nashville. Hey, we're going to get cigars, you know, this Saturday from 6 p.m. to 8 p.m. If you want to come by, come hang out, network with some other high level entrepreneurs, come hang with us. Right. That's where, you know, that's where that you the rubbing shoulders takes place. And also like you got to punch your ticket sometimes. It's like sometimes you got to pay to be in the room. That's totally fine. When you pay for access to people, it pays back in droves. Like I pay for masterminds, I pay for events, all of that stuff.

16:18Why? So I can be around the type of people I want to be around. And, you know, the whole idea is not necessarily to be selfish and to try to get deals from it. That's just a byproduct of you being in the room. Right. I'm sure you've read like the go-giver and it's, you know, generosity first always wins and it might feel counterintuitive until you realize that when you show up in consistent generosity, your industry will start to reward you in ways that you cannot even keep up with if you have planted those seeds and you've done so with, and again, the term I like to use is noble intent. What's your intention?

16:58If your intention is just to pitch some deals and, you know, close some sales and stuff like that. Yeah. We're all going to know that. Like you, you're not fooling anybody. So like your heart's gotta be in the right place. Are you truly looking out for, you know, and your highest priority is to improve the lives of other people and make a mark on in the world, then, you know, it's just life's going to be a little easier in doing, Joshua, what I think you're talking about here. Absolutely. Yeah, Joshua, share just a bit about how Hydro works and how you facilitate maybe a lot of what we've been talking about.

17:30Yeah, absolutely. So, you know, it's pretty typical for people to come to us specifically for something like lead generation, right? And so for us, our whole goal is to apply these methodologies, whether that's building a referral structure, building a cold outbound system through LinkedIn, through email, setting up your first paid ad campaigns, right? It's like for us, like we want to be very omnipresent in our marketplace, right? And this is a really good segue into like the grand scheme of like marketing in general, which is you just have to get attention. That is the currency we play with nowadays.

18:03who, you know, Alex Ramose talks about it all the time. Gary Vaynerchuk talks about it all the time. Like, you need attention. Like that is the currency we play with nowadays. And so for us, I want to be the loudest and noisiest person in our marketplace for agency consulting. So that's why we do podcasts. That's why we run our own paid ads. That's why we send outbounds, gold outbounds to people. Because when you're in our ecosystem and you get our first thing from us, well, I want to have 12 different touch points with you in different areas. So you're like, well, it seems like these guys are super legit.

18:35And I promise you, I'm not the biggest entrepreneur that you've interviewed on this podcast. We don't have the biggest business, but I can tell you we make a lot of noise in our marketplace. And eventually what happens is you kind of wear people down of like, you know what? I keep getting this free value from Josh, from his YouTube channel. His team sends me trainings and resources all the time. And for me, my best deals are six months down the road, right? And so for me, I'm thinking long game. I'm thinking long picture. I want to land clients six months down the road. I'm not looking for conversions today.

19:06I'm pumping value into the marketplace. And I'm building a pipeline for six months out because my actions from six months ago are the people that are in our ecosystem and are having the sales conversations with us today. I'm not saying like, hey, I'm going to stand up this campaign. I'm hoping by next week I get a couple of deals. That's not how lead gen works anymore. You have to play the long game. 100 joshua johnston work with hydra.com is your website when somebody goes there what should they do what should they click on what would you recommend they do next a little bit of everything in there there's resources there's trainings you can find our youtube channel through that um you can connect with us on linkedin we post trainings resources we do linkedin lives with some of the best entrepreneurs in our space uh so you can actually have live time with them ask them questions in real time.

19:57Right. And so for us, like, like, come just, just learn like that. That's the whole idea of, of entrepreneurship is like, we're constantly on this path of education and trying to make ourselves better. Uh, and so that's kind of the whole idea. If you come to our website, you'll be able to find some trainings and resources. If you go to YouTube, you'll find trainings and resource. If you subscribe to our email newsletter, we're going to send you free trainings and resources to help you fix the bottlenecks in your business. So it's a good place to go if you're just trying to learn stuff. I love it.

20:25Workwithhydroid.com. Joshua Johnston, you are the founder. It's been great to have you. Thanks so much for the conversation. Appreciate it, Josh.

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