How to Scale to $600,000 in MRR with 25 Clients with Chris Dreyer

Chris Dreyer is the founder and CEO of Rankings.io, an SEO agency that works only with personal injury law firms. A former history teacher, he built about a hundred Amazon affiliate sites until Google’s Penguin update cut his income from roughly $15K a month to $2K, worked at an agency in Clayton, Missouri, and launched attorneyrankings.org in 2013. Andrew Dymski hosted this episode of Agency Journey and framed it around two things: how Chris found his positioning, and the operating decisions he made once he had it.

The P&L showed SEO was the only profitable line

At the start, the agency took anything in legal: PPC, SEO, and design. Chris once sold 14 SEO audits at $1,000 apiece and called it the worst few days of his life. The turn came from the accounting.

We have our P&Ls that we look at with our accountants, and I had broken down our revenue by classes. SEO was a class, design was a class, basically where our revenue was created. And I identified that most of our income and our profitability was from SEO. We’re not very profitable for PPC and not very profitable for design.

(Listen at 04:06)

He referred all of the PPC work, about 15 active clients, to an agency that only did PPC, and got SEO leads back. He’d tried white-labeling it first, for five or six months, and profit was lower and quality wasn’t what he expected. Design went a year later. He’d assumed it was a loss leader, but only existing clients ever bought it.

Opening up to other industries killed the flywheel

Chris’s CEO peer group talked him into taking the law firm SEO model to physicians and home services. He calls it his bad move: it killed the momentum in legal, and the copywriting and the person you’re speaking to are entirely different. Some of the new clients were big, which made going back harder. Andrew pushed on why he’d walk away from revenue when those clients were happy.

Every time I introduced a new industry, it’s a blank canvas. I have to redo all your processes… You’re also guessing much more when it comes to pricing… All of these factors, they dilute your perception across an industry. So I found that our conversions were starting to slow down. We were starting to lose those great legal leads who we could really, truly serve.

(Listen at 08:58)

70 percent of revenue from under 40 percent of clients

Back in legal at the end of 2018, Chris heard Seth Godin talk about finding the smallest addressable market. He suspected the answer was personal injury and wanted data to confirm it.

We went back to the data and we broke down all of our existing legal clients by practice area. We found that 70 percent of our revenue was from less than 40 percent of our clients, which was personal injury.

(Listen at 10:52)

Rankings.io went all in on personal injury SEO at the start of 2019. Andrew asked what tangibly had to happen.

We had about 73 clients and we fired 50. 50 out of 73… We found them homes that could reciprocate. That was key. If we knew that they weren’t going to reciprocate and send us PI leads, it would have been just devastating, because that’s a lot of revenue. So it did end up working in the long haul, because our personal injury clients were substantially more profitable for us too… When we were at, I think we’re at around 50,000 MRR, something like that, from 73 clients. And now we’re at close to 600,000 MRR from 25 clients.

(Listen at 12:02)

The rest is what Chris calls margin efficiencies: no fresh keyword research per client, an editorial calendar that already exists, ad spend aimed at personal injury lawyers only, and knowing the objections before the prospect says them.

Strategists in house, production with partners

Rankings.io sells one thing, SEO, split into content, on-site, technical, local, link building, and press. Larger contracts are what make that depth affordable. Andrew asked how much of it is in house.

We’re a remote-based company. We have mostly strategists and project managers internally. The technicians, the labor, the production, for the most part is with strategic partners.

(Listen at 19:02)

The one function he keeps internal is on-site SEO, because client requests like adding a blog post or swapping a photo need a fast response. Andrew asked why partners instead of payroll. Chris sees it as a hedge in both directions: if several clients leave he doesn’t furlough anyone, and he can scale faster without worrying about capacity. He pilots new link building and content partners constantly so there’s always a backup.

Zero to $250K MRR with no marketing

Andrew asked about lead flow. For the first $250K of MRR there was no marketing at all.

From about zero to 250,000 MRR, we did basically no marketing, and it was a pure intentional referral strategy. If anyone’s read the book The Ultimate Sales Machine by Chet Holmes, he talks about creating your Dream 100 list. When I was reading this, I had this light bulb moment: why, instead of creating my Dream 100 clientele, why don’t I create my Dream 100 referral partners? And it’s create relationships with commission-only agencies. I don’t have to staff them up.

(Listen at 22:47)

Earlier, when Andrew asked what hadn’t gone to plan, Chris named the cost of leaning that hard on referral partners.

Through our referral relationships, if you load up on an individual partner, you can actually make them into true competitors, where you build their business and then now they have revenue to start doing the Google AdWords and doing the things that you had this overwhelming presence on. So you actually build adversaries to some degree.

(Listen at 16:07)