EP 51: What Makes a Relationship?
Kelly: Welcome back to Thrive, your agency resource. Today, we're talking about what makes a relationship. Really, really interesting topic. And my guest and good friend is Joe Apfelbaum and, Founder and CEO of Ajax Union, which is a B2B sales firm focused mostly on LinkedIn strategies. He’s authored several books. He's also a passionate rapper, always puts a smile on my face. Joe welcome to the show. I'm so excited to have you here today.
Joe: Thank you so much for having me. I'm so excited today. On LinkedIn I posted a photo of me eight years ago when I went to my first networking event ever.
Kelly: That's great. It's so great to look back at those things, right?
Joe: Yeah and Facebook reminds me, it's really easy, but so I posted a picture of me and Elmo. If you were like, "What is this picture this fat guy and Elmo?" I was like listen I was 265 pounds. I didn't know I was a fat guy at the time. But I definitely had no idea how to network at that point, and it's just insane how far I've come in terms of going from being a transactional person to being a relationship-based person. So I’m so glad that I'm here to discuss that.
Kelly: Yeah and so that's a great segue for what I wanted to start with, which is actually a little bit about your background, how you grew up and how those experiences sort of led you to growing what you call a transactional agency, a hundred-and-fifty employees, eleven-hundred clients, and then where you are today which is completely different.
Joe: Yes, so when I started my company I wasn't a business person. I was kind of like a tech guy. I built websites I was an SEO guy. My mother used to call me Touchy-Touch because I like to touch everything. I just like to like to reverse engineer and tinker and tear apart the computer and build it back together. And I just love the process of doing that. I didn't really ever really do it for the money. Of course I want to make money. I didn't come from a financially wealthy or abundant family. So I was always trying to figure out- okay how can I hustle, how can I buy stuff on Craigslist, sell it on eBay, how can I just find ways to make money, and what I found was people used to say, "If you build it, they will come." Ever heard of that saying, "If you build it, they will come"?
Kelly: Yeah. It’s not true.
Joe: It’s not true. They don’t come when you build it. You can build it but time will come you have to learn how to market it. So I built a lot of websites for people, and then they said okay do SEO. And when I found this idea called recurring revenue, whereas just building a website, a few thousand bucks but then if you can do SEO for them they pay you a few thousand bucks a month. So I said you know what? I want to help small business owners. I did some research. I found that there are 34 million businesses in the United States and I said, I want all of them as customers." When I started, "I was like I want all of them, every single one, even the grumpy ones. I will change them. I will change the world."
Kelly: I think I've heard this story before.
Joe: Anyway, so I set out and I said okay in the first year, we're gonna hit a thousand clients. I did not hit a thousand clients in the first year. I got five clients when I started out but then after that when we were getting ten clients a month, then twenty clients a month, and eventually we built up a team to be able to close 50 new deals a month. The problem was that we were also losing 50 clients a month.
So we were having this churn, I think it was like an eight month average and we were trying to figure out okay what's going on, why are people not staying with us? Is it because our service is not great? But over ninety percent of people loved our service. So the question is what are we doing wrong? And the answer was we were targeting the wrong people because the average business will go out of business within three years.
Most businesses will go out of business in 3 years, so we had that demographic, people that were super hungry, super ready to go, and they wanted SEO to build a long-term business, a long term strategy for a long term business, but they were thinking, how can I get rich quick in my business and they weren't profitable, they weren't successful, they weren’t strategic, they weren’t process-oriented, they weren't developed. And as a result, they would go out of business and try the next shiny thing. The average entrepreneur has a seven year itch, these people had the seven minute itch.
And so, they kept doing it over and over and over, and so I had to really look at myself, look back at myself, and ask myself okay what am I even doing here? What am I doing, am I going to spin my wheels forever, do I want to get to the next level? We were on the Inc 5000. We’re number 178, 2012. We did half a million, two million, four million, we grew very quickly but then at some point growing really quickly was kind of like my weight.
I was gaining ten pounds every single year. I became a balloon at 265 pounds. It's not sustainable. I can't just eat whatever I want and so I had to learn how to create systems and processes in a business, how to figure out, okay, what do I even want for myself, what do I want to create, why am I in business to begin with, am in business to get the ten million in revenue and lose a million dollars a year like some of my clients were? Or do I want to be able to feed my family, make a really good living and live a life of purpose?
So I had to hire coaches, consultants, mentors. I joined Entrepreneurs’ Organization. I joined Vistage. I joined a bunch of other groups and I started learning from the CEOs that they were moving a lot slower. They were moving a lot slower, and what I realize is that long term slow and steady wins the race. And my used to say it to me but I'm a fast talker. I'm a New Yorker. I like moving fast, fast, fast, fast, fast, like fast food. Let's get it all done fast, fast, fast, come on, come on, before they even serve the food, I ate it already. So that's the idea.
So what I want to do is I got to slow down, and so when you're slowing down, you can't move too slow because then you're just stuck, you become a rock. You got to consistently move but you got to have the balance between the ying and the yang of quality and quantity. And the same thing with my network, having the balance between quality and quantity. And now, I have a transformational relationship with my employees. I used to not like my employees. I love my employees. I used to not like my clients. I love my clients. I used to not like my business in my life. I love my business and I love my life so it's a whole different ballgame waking up in the morning now.
Kelly: Right. And how amazing is that, how good does that feel to even just say that out loud, like I love my business, I love what I do for a living and I love my life. Those are really powerful words.
Joe: It's very powerful. Not only is it powerful, it's freeing, emotionally freeing, because I used to feel stuck. I used to believe in my business and not in myself.
Kelly: That rings a bell.
Joe: And now, I believe in my business because I believe in myself.
Joe: It’s a whole different ballgame.
Kelly: Whole different mindset. Absolutely.
Joe: So I feel like right now I'm in a growth mindset, in an abundance mindset. I give a lot of clients to a lot of the people around me, even some of them that might think they're competitors. There are no competitors because my competitive advantage is me. You cannot have- Like the competitive advantage is me, and the processes that I create the systems that I create, the reputation, that we have that no one else has.
Like the client, I used to think, let me tell you something crazy. I used to think that if somebody would look at my LinkedIn contacts, they would steal all of them. And I thought if somebody would look at my CRM, they would steal all my clients and I wouldn't be able, and all my prospects and it wouldn’t be enough for me. Now I'm like these are my clients, these are my prospects. Tell me who you need, tell me who you want to speak to. If a client wants to leave because you're better than me, then you deserve the client.
Kelly: Right. Well it's also the mindset about giving and supporting other people as the first priority, and then you know it will come back to you. I mean I think when you have that competitive fear-based mindset, it's like army cadets when they're sitting at the mess hall and they are like guarding their plate because they don't want anybody to touch their food, right? That's like that's a different mindset than I'm willing to share and eventually people will remember that I shared and they'll come in to share with me all the time.
Joe: Yeah. And I used to think that energy comes from food. Energy doesn't come from food. I thought successful businesses have to have lots and lots of revenue. No. Success in full businesses have to have a lot of profit and a lot of cash, a lot of profit and a lot of cash, not a lot of revenue. You don't have to have hundreds of millions of dollars to make millions of dollars in profit. You just have to be smart about it. So that's the idea.
Kelly: So talking about relationships specifically, why do we need to create deeper, more meaningful relationships with those that we engage with, whether it's in business or even in life, because I know you talk about both very fluently?
Joe: Yes, so if you think about relationships in general like what's the purpose of a relationship, like why do we even need relationships? We are social creatures by nature. That's what human beings are and we need to connect. And ultimate fulfillment comes from contributing to others. That is the ultimate fulfillment. So you can have achievement from today to tomorrow, you could be a billionaire on your sixteenth wife, I don't care, or on your sixteen husband, I don't care.
But if your life sucks and you hate the people around you and you hate yourself, I don't care how much money you have, I don't care what you've achieved in your life, that's not a life worth living. And each one of us eventually is going to die so the question is what really matters in our life is the quality and the quantity, the depth of the relationships that we have, that we make.
Everything that I do in my life I do it for my relationships. I do it for my kids. I do it for my parents, for my siblings, for my community. I do it for my employees. I do it for my clients. If all the people didn't exist then I was alone in an island I wouldn’t have to do anything. I would just eat coconuts and rap. That's what I would do. Instead of eating coconuts, I go crazy for coconuts, crazy for coco puffs. I think maybe that's something to say, crazy for coconut.
Anyway so the bottom line is what you have to do is realize that if relationships are important to you, and they're important to your business, and they’re important to your emotional wellbeing. And by the way I spoke to a neurosurgeon and he said that one of the ways to avoid dementia or to push dementia is to be social and have meaningful relationships besides learning a new language like I'm learning Chinese, ni hao. So that's the idea. The idea was learning and creating and building and being social.
And here's another thing that’s super powerful that a lot of people don't think about, self-expression. This whole idea of self-expression that a lot of people are afraid to express themselves because they might get pushed away, they might get rejected, they might not get love by the relationships. When you have meaningful relationships that you love and they love you, you can be like your best friend and be fully expressed, like me and you Kelly we're best friends, and we don't know each other for many, many years.
Joe: But I am able to be so open, so raw, so vulnerable, so connected with you, and you see that, and that's why you love being with me. And that's why you love spending time with me, and that's what makes money, by adding value to other people and connecting that way people get to know you, people get to trust you, and then people get to like you because they are like you because they're mirroring you. That's the power.
Kelly: Man, I'm not even kidding. I'm sitting here and I literally have goosebumps. That was so spot on. I couldn't have said that better myself.
Joe: Thank you.
Kelly: So being at Ajax Union, you focus on LinkedIn strategies, but it's really about connecting and creating these relationships. So can you talk a little bit about how you do that? I know you have sort of a framework for three different qualifiers from a networking perspective, and I love to kind of talk about that because I think it's really interesting how you pare down and drill down and sort of funnel the quality versus the quantity in your network on LinkedIn.
Joe: The average CEO has 930 connections on LinkedIn. There are 610 million people. The max amount of connections you could have on LinkedIn 30,000 but you can't have 30,000 relationships. So how do you identify the hundred people, the two-hundred people, the five-hundred people that you want have deep meaningful mutually beneficial win-win relationship?
So I say take all your relationships that you have right now and analyze them. Most people don't create awareness. They're busy doing things. They are busy executing but they don't have strategy. But before strategy, you got to have awareness. So awareness means recognize who do you know? So I say recognize, strategize, then prioritize. So recognize is step number one, who do you know, which names do you even recognize. Because if you don't recognize the name, you don't have a relationship with the person.
Just because you're connected to somebody and you've been herding connections, stop hoarding connections, stop herding and hoarding connections. Instead, start building relationships with the people you already know first. So step number one is who do you know. So go through all the names and identify who you recognize as a content, have you met them, have you spoken to them, do you have a mutual contact, how well do you know them. So step number one is recognize.
Step number two is strategize, do I want to get to know this person, do they seem like they’d be interesting to you, could they be a client, could they be a referral, could they be a partner, could they be an affiliate, could they be a lover, could this person be somebody that could be meaningful to you in your life that could love your content, that you want to get to know in a deeper way. So do you want to get to know this person, are they strategic for your life and for your business and most of the time the answer's gonna be no.
Out of the 610 million people, most of, millions, hundreds of millions are gonna be no. Let’s say 50 million people in the UK or in France that don't even speak English, look, that's not gonna help you because you can't even communicate with them, unless of course you're from France and you speak French. So identifying your target market is really important, strategizing is the second. So being strategic about your relationships.
And the third step is, is this person real, is this person real. When you send a message to somebody, are they real, are they a fan of your content, do they engage with you in some way, are they the type of person that's just real. So for you, a real person is the same as what it is for me, but for somebody else a real person might be a person that separates business and pleasure.
They might say business is business and I don't want to deal with the person that says business is business because that means that person is trying to make an excuse to treat me badly in the name of business and I don't want that. I want business to be personal and I want you to connect with me deeply and that's the type of relationship that I want. I want real relationships that I can go deep with, that I can be myself with.
So is this a real relationship, is this my type of relationship, is this a value-based relationship, is this the person that I would want to have lunch with, have drinks with, is this the person I want to go out to dinner with. So what is the priority that this person plays in my life based on their communication level, based on who they are, based on what their likes are, their interests and whether or not I would resonate with them.
So if you take the recognize, strategize and prioritize process, the 3 step process of awareness, strategy and then execution, or then accountability, then you're gonna know how to be able to segment your list and prioritize the contacts that will actually help you be able to create a greater contribution in your network and ultimately get more referrals, get more clients, have more fun.
Can you imagine if you had all your contacts that you prioritize to go out with and have fun with and connect with? They were all your best friends. They were all people that you want to spend endless amounts of time, that you wanted to be on their podcast, that you wanted a love on, that life would be heaven, instead of having a bunch of trolls hanging around cramping on you, like I did with the clients that I had in the past.
Now my clients I love, I love, love, love, love, love, I love my referral partners. There was once a guy who was a terrible client and he got so angry. He is like Joe, I’m never gonna refer business to you. And I got so depressed, so sad. And I was like oh, my heart started hurting so much. I can't believe he's going to make me fail. This guy's gonna make me fail. Then a coach tells me, he’s like, Joe why does it hurt you so much? I was like, "cause I want to succeed." He’s like if this guy referred business to you, people refer business that are like them.
Kelly: Lesser than them.
Joe: Right. So you're going to get a crappier client from the crappiest client like thank the guy, send him a thank you gift for not sending your referrals.
Kelly: Oh that's a good one. I like that.
Joe: So that was like mind-blowing for me because now I'm like wow. And you know what’s a red flag for me? When somebody says if you give me a discount I'll send you referrals. That's the biggest red flag ever. I pull out the big red flag and I started waving, I'm like, do not take this client on.
Kelly: I love it. I love it. So would you say that there's one sort of keystone takeaway that you have for other agency leaders that are watching or listening, just that they should strive to impart in their own lives, businesses, or just the way that they approach relationships or networking?
Joe: If you want to be successful, you got to be tracking. You can’t just be attacking and you might say Joe cut me some slack in this room and I'll just say boom. You know why? Because you need to have a process. You need to know your process. So agency owner, listen to me. What is your step-by-step process for building relationships? For me, it's recognize, strategize, and prioritize.
How often do you touch base with the people that love you and that you love? How many people do you actually have that you know, that you trust, and that you like and that they know you, they trust you, and they like you? Break it down, review your contacts. You're moving too fast. No matter how fast you're chewing, you're chewing too fast.
So put your forking fork down, chill out for a minute, take a deep breath, drink some water because a five percent drop in hydration to thirty percent drop in energy, take a chill pill, take a deep breath and realize that you have the rest of your life to live. So connect deeply, love on your relationships.
I often tell people there are three ways to connect with someone and to get a meeting, greeting, feeding, and then meeting. Most people go straight to meeting and get rejected. First start with greeting. "Hi, thank you. Nice to meet you. So good to get to know you. Happy spring!" Whatever. Start with a greeting, then get into feeding. "Kelly, you're such a marvelous incredible agency coach. You've been able to help so many people. I'm so impressed by your profile on LinkedIn. I'm so impressed that you sold your agency. I'm so impressed that you made a difference for other people." Feed, feed, feed, feed, feed, thank you, thank you, thank you, thank you, thank you, appreciate, appreciate, and then go for the meeting then get on the podcast, then have lunch, dinner, breakfast, drinks then go to the Caribbean islands and go crazy.
Kelly: Well, it's a process. It's like courting right? Like you wouldn't go on a first date and propose and that's kind of the analogy that I always us, that relationships and deep meaningful relationships take time and like you said before it's about slowing down, it's not about how many LinkedIn connections can I have. I've been on LinkedIn since the very beginning, and I think I only have maybe like two-thousand connections, other connections they have twenty five thousand, thirty thousand and I'm like, "what does that really say, what does that really mean? Is it just to be able to say that I'm like this rock star connector?" But are you really connecting when you have that many “relationships” because they're not relationships and we have to be honest with ourselves about that.
Joe: They're just connections. And let me tell you some sales statistics just you know. 48% of sales people never follow up with the prospect, and this is even in networking. Most people don't follow up. I go to a lot of networking events. Most people never follow up. 25% of sales people make a second contact and then stop. 12% of salespeople only make three contacts and then stop.
So that means that means that over 80 or 90 percent of people are not making more than three contacts. I would say only ten percent of sale people are making more than three contacts. And the same thing with networking but only two percent of sales are made on the first contact, three percent of sales are made on the second contact, and eighty percent of sales are made on the fifth to the twelfth contact. Eighty percent of your referrals are going to come from the network that you've been in touch with a dozen or two dozen times and you built meaningful relationships.
I know this because I've done this. The deals that I get that are ten-thousand a month retainers, that are twenty-thousand dollar a month retainers, for lead generation, for sales enablement, for the stuff that we do for the B2B companies, they come from people that I've known for five years, for six years, for seven years, and that I’ve had lunch with every single year like multiple times that know me, that trust me, that see me over and over. They come from random places.
That is the reality of it. Somebody said that networking doesn't work. I said how many introductions have you made in the past six months? He said I made three introduction. I said I made a thousand introductions. It's not that networking doesn't work. You don't work. So he's like holy crap. I don't work.
Kelly: Coz you're not giving, you're not giving.
Joe: Put it out there.
Kelly: You’re doing the number one thing which is a priority. So I said it at the top of the show, I have to ask, are you gonna do a little rap for us today?
Joe: Of course I'm gonna do a little rap for you today. My name is Joe and I'm the social selling pro. I teach LinkedIn so you make dough. This is how we go. This is how we flow. Let's start the show so you can grow. Now bye to the lurkers, hi to the workers, ride like a surfer, click on the cursor, you open an account then you don't know what to do, you’re looking through your feet then you're looking for your crew, where is Kelly, where is Gilbert, where are my peeps?
But you haven't been connecting to all those connections that you have been collecting to all those fears, that you have been protecting to all those results that you have been expecting. Let me be direct. Learn how to connect instead of expect. It's a networking affect. The value that you add to this guy named Brad to your sister's dad It'll make you glad. Going viral is a fad. Instead introduce them to your pad. You won't be mad. You won't be sad but you didn't do the work. You're acting like a clerk in the post office, like an order taker you wanna be a mover, you want to be a shaker, start to learn how to be a rain-maker, listen to Thrive and start to be alive because Kelly is the bomb. Can I get a boom in the comments? Give me a boom. Boom!
Kelly: Boom Joe. Thank you so much. You make my day every single time we talk, every time I hear you rap, it lights up every part of me. So thank you for being on the show today. I appreciate your time and you have a great day.
Joe: Thank you so much. Boom!