I had to cut my already small staff in half because of AI. We've evolved the business to keep up with the AI era.

• Alex Cohen has run his small marketing agency for 17 years.
• As AI took off, clients pushed for lower fees — or left.
• He responded by cutting staff and launching an AI integration service to keep and win back business.

This as-told-to essay is based on a conversation with Alex Cohen, a 41-year-old CEO and founder of Xander Marketing, based in Kent, UK. This story has been edited for length and clarity.

I've run my small marketing business for 17 years now. When ChatGPT launched in November 2022, I had a feeling marketing would be one of the first industries to be disrupted.

I played around with the model over Christmas, and by my first day back at work in 2023, I told my team we needed to figure out how to use AI. I was excited because suddenly, I could do all these things for my business that I couldn't do or didn't have time for before.

As AI became more relevant, clients began pushing back. In the summer of 2023, a repeat client asked to reduce the scope of our content creation services. Another email came in that summer asking for a lower, "more competitive price" for the same scope of work we'd already been doing.

Slowly, my business has trended in the wrong direction. At this point, AI has been a double-edged sword for us.

I went from not using AI at all to using it in most of my business

My agency works with B2B SaaS companies, often ones without in-house marketing teams. We handle everything from strategy and inbound and outbound marketing to content, websites, and onboarding.

When we started implementing ChatGPT, the first phase of AI integration focused on writing blog posts, social media posts, and related content. Now we have AI projects and agents set up in Claude, which has become our go-to model. I built a co-CEO in the projects tool in Claude as my sounding board for decisions and challenges.

AI has changed what some of my clients expect — and what they'll pay

Since AI started entering client conversations, I've experienced clients either trying to force a price down or no longer needing us.

Our content and social media services have been most affected. That was one of our most profitable aspects of the business beforehand, and now we do way less of it. Clients know that AI has changed the way we work and expect either to pay less or to get a lot more for the same price.

It got to a point with clients where I couldn't sell content services for the same price.

Pre-AI, we would charge an hourly rate. Now we charge on value.

The value isn't always dependent on the time a project takes because it may be very quick for us to do, but we are able to do it because of the years we've spent learning how to use AI effectively. Some of our content services that used to take a day to complete now take an hour, and we've updated our pricing to reflect that. Everyone kind of wins that way because we still keep the client.

AI has let us take on clients we couldn't have worked with before. We're working with a client on a website, and they have a really small budget. A few months ago, we couldn't have worked with them for that rate.

Now, because of AI, we can vibe code their website ourselves. They get it at their price, and we can still make money. So we are evolving our services to keep pace with this new AI era.

AI also forced me to cut my team

In 2023, I had two part-time employees and one full-time employee, plus a network of freelancers. In 2024, I had to make one of my part-time employees redundant. Then, last year, I had to make the person who was full-time redundant, and they're now working on a freelance basis.

With freelancers, it's been the same kind of drop-off. Now, I'm the only full-time employee, and I work with about eight to 10 freelancers. Pre-AI, we had three freelance copywriters. We've got one now. The reason for these changes has been a mix of not needing them because we're using AI and a big drop-off in clientele, which AI is also influencing.

I launched an AI service to keep the business going

I've been thinking about how relevant a marketing agency will be over the next two to three years, and, given the clients we've lost, I've started pursuing a business to help marketing teams integrate AI.

The idea is that we've spent the last three years so deep in learning how to maximize marketing services with AI, and now want to help teach companies how to do the same. We would help integrate everything with AI, set up the right projects in their workflow, and help them build the right skill set so they can get more out of their AI use.

A part of that is also helping with the team's mindset shift, and then working with teams to help them evolve their AI use. These things move so quickly, so if there's a new release from Claude or the client is using a new AI or tool, we'd help them plug it in and maximize its use right away.

AI has shrunk my business and changed how I think

As a business, from pre-AI to now, we've seen a drop-off in our client base. But the anxiety I've felt from AI disruption hasn't outweighed the excitement.

I've been trying to take an entrepreneurial approach to it. AI is here so now, how do we make the most of it? How do we solve these new problems it's creating? And how do I use what I've learned about AI over the last few years to get there?

Do you have a story to share about how AI is changing your small business? If so, please reach out to the reporter at aapplegate@businessinsider.com.