This told essay is based on a conversation with Alex Cohen, 41, CEO and founder of Xander Marketing, based in Kent, UK. This story has been edited for length and clarity.
I’ve been running a small marketing business for 17 years. When ChatGPT launched in November 2022, I had a feeling that marketing would be one of the first industries to be disrupted.
I played around with the model over Christmas and told my team that by my first day back at work in 2023, we needed to figure out how to use the AI. I was so excited because I was suddenly able to do all the things in my business that I couldn’t do or didn’t have time for before.
As AI became more relevant, clients began to push back. In the summer of 2023, a regular client requested that we reduce the scope of our content creation services. That summer, we received another email requesting a lower, “more competitive price” for the same scope of work we were already doing.
Gradually, my business is going in the wrong direction. At the moment, AI is a double-edged sword for us.
We went from not using AI at all to using AI in most of our businesses
My agency works with B2B SaaS companies that don’t have an in-house marketing team. We handle everything from strategy, inbound and outbound marketing to content, websites, and onboarding.
When we started implementing ChatGPT, the initial stages of AI integration focused on creating blog posts, social media posts, and related content. We now have an AI project and agent set up in Claude, which has become our go-to model. I built a co-CEO into Claude’s project tools as a sounding board for decisions and issues.
AI has changed the expectations of some clients and how much they pay
Since AI started intervening in customer conversations, I’ve experienced customers trying to force prices down or not needing us anymore.
Our content and social media services are the most affected. This used to be one of the most profitable aspects of our business, but now its profits have declined significantly. Clients know that AI has changed the way we work, and they expect to pay less or get more for the same price.
We reached a situation with our client where we could no longer sell content services at the same price.
Before AI, people were charged an hourly rate. We will now charge based on value.
For us, projects can be completed very quickly, so their value doesn’t necessarily depend on how long they take, but we can do that because we’ve spent years learning how to use AI effectively. Some content services that previously took a day to complete now take an hour and we have updated our prices to reflect this. We still keep our clients, so everyone wins that way.
Thanks to AI, we can now take on clients we couldn’t work with before. We work with clients to create websites, but their budgets are very small. A few months ago, we wouldn’t have been able to work with them at those rates.
Now, thanks to AI, we can vibecode their websites ourselves. They get it at their price and we can still make money. That’s why we’re evolving our services to accommodate this new AI era.
AI also forced me to downsize my team
In 2023, we have two part-time employees, one full-time employee, and a network of freelancers. In 2024, we will have to lay off one part-time employee. Then, last year, I laid off my full-time employee and am now working as a freelancer.
A similar situation continues for freelancers. Currently, I am the only full-time employee, and I work with about 8 to 10 freelancers. Before AI, we had three freelance copywriters. There’s one more thing. The reasons for these changes are a mix of the fact that they are not necessary because they are using AI, and a significant reduction in the number of customers who are also affected by AI.
Read the rest of our Tiny Teams series for an inside look at how small teams can use AI to achieve big results
We launched an AI service to keep our business running
I’ve been thinking about how important marketing agencies will be in the next couple of years. And in light of the clients I lost, I started pursuing a business that helps marketing teams integrate AI.
The idea is that we’ve spent the last three years deep learning how to use AI to maximize marketing services, and now we want to help teach businesses how to do the same. We help you integrate everything with AI, set up the right projects in your workflow, and build the right skill sets to get the most out of using AI.
As part of this, you can help your team shift their mindset and work with them to evolve their use of AI. These things happen very quickly, so if there’s a new release from Claude, or a client is using a new AI or tool, we help them plug it in and get the most out of it right away.
AI has reduced my business and changed the way I think
As a business, from before AI to now, we have seen a decline in our customer base. But the anxiety I’ve felt from AI disruption has not outweighed the excitement.
I’ve been trying an entrepreneurial approach to this. Now that AI is here, how can we get the most out of it? How can we solve the new problems it creates? And how can we leverage what we’ve learned about AI over the past few years to get there?
Do you have a story to share about how AI is changing small businesses? If so, please contact our reporters. aapplegate@businessinsider.com.