The R-4 Business Growth Model

As briefly described in an earlier article, the R-4 Business Growth model satisfies the condition of the Third Secret Key to Successful Marketing, which states:

It is supremely useful to have a simple and powerful business growth model, which you can use to map out what needs to be done.

(It is called the ‘R-4’ system purely as a memory aid, because each of the levels is labeled with a word beginning with the letter ‘R,’ as in R-eputation, R-each, R-esell, and R-eferral.)

A pyramid with four levels

By improving any one of these four levels, annual income improvements of 25% become possible. And improving more than one of these levels has a compounding effect.

It is graphed as a pyramid because you must have a strong lowest level, because upon that base the higher levels can be based. The lowest, most basic level is “R-eputation.”

Here’s how it works …

R-eputation, the first level

If your reputation is not sound, that is to say, if people do not have a good reason or feeling that they should trust you, then you’re not in a good position to make sales, which is the main thrust of the activities at the next higher level.

To keep your reputation sound and strong, the most basic things to handle are these:

  • Secure your website so they cannot be hacked, or this can trash your reputation fast.
  • Designing your website so that it provides a good first impression. Specifically, it should automatically and unconsciously appeal to your target customer. Which means that a website designed to sell hot dogs to carpenters will have a very different look compared to compared to a website designed to sell financial instruments to bankers.
  • Insure the impression of integrity and appropriate quality for all your materials; your language, expressions, and turns of phrase should all be congruent with the position of trust-worthy authority that you wish to convey.
  • Take action to get positive reviews and testimonials for your own website and for other appropriate websites out on the Internet.
  • Promptly handle, in the appropriate manner, any negative reviews or “bad press” to minimize any damage.

R-each, the second level

“If you wish to grow, more people must hear about you today that heard about you yesterday.”

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You extend your reach out into the universe by sending communications out (letters, websites, e-mails, text messages, webinars, press releases, interviews, guest blog articles, forum postings, etc. etc.)

All advertising (in magazines, newspapers, radio, direct mail, Google ad words, etc. etc.) is a reach out into the universe. Each reach has the intent to create a new first contact with new prospects.

You further extend your reach out into the universe by sending additional communications to prospects (and customers) who were already enlisted into your communication channels. This additional reach is often more profitable than the initial reach, for the simple reason that people who bought from you before are the most likely to buy from you again.

For some reason, it is very common among businessmen to spin a lot of time and money and attention into reaching out for new business… and at the same time, to repeatedly ignore communicating with the tried and true, proven, existing customers. Weird, no?

R-esell, the third level

Once you have an existing body of customers, the most profitable thing you can do is to increase the buying of your offering by those existing customers.

You can do this with add-on sales: “you want fries with that?” Is a famous example. Mac Donald’s makes $4.7 billion dollars every year by training their people to religiously repeat those five words. That’s almost $1 billion per word!

You can do this by raising prices: in our opinion, the very best time to raise prices is when you discover you have two darn many customers. But don’t necessarily wait for that to happen. More businesses leave money on the table every year by failing to raise prices than lose money by having prices too high.

Good rule of thumb: if nobody is complaining about your prices, they are too low.

You can do this by increasing the frequency with which your existing customers purchase. For example, a restaurant can have a text-messaging system set up, and after enlisting customers into this system, special offers can be broadcast to 100 or 1000 customers all at once. With this method, the customer to be visited once a month can be attracted to visit twice a month. The customer that used to visit twice a month can be attracted to visit every week.

And even a business so different as a financial services company can do the same thing. But probably, instead of text-messaging the financial services company will send out e-mails, provide point-of-purchase posters, send out postcards, send out letters, or actually make customer service calls from in-house staff.

R-eferral, the fourth level

Once you have a solid reputation, and the format you have created a reach into the universe by which to begin making sales, and once you have been maximized your inbound revenues by selling more to existing customers… you wish to maximize your referrals.

Because, if you do it right, you can turn your entire community of customers (and prospects) into unpaid salesmen.

And you don’t do this, as most businesses do, by passively awaiting the day that some customer may just happen to mention your company to his friend, Bill.

Better to create an active (reaching-out) program to actively solicit both testimonials to weave into your outgoing communications, and to actively solicit specific referrals to specific people. And to solicit these referrals from each and every customer and prospect that you hang out. And to do this over and over again.

When you think about it, it’s obvious that if you do this frequently and repeatedly you’re going to get more referrals than if you do nothing, right?

And now, if you have an active source of customer referrals being created, you can see how these referrals effortless lead right back into the lowest level of the pyramid, which is: reputation.

Because a new prospect, who comes to you by means of a customer referral, is far, far, far more likely to buy than a cold prospect. This is your most effective and most cost-effective type of marketing.

But the first three levels must be carefully built, step-by-step, in order to arrive at this most effective and most cost-effective type of marketing.

How to use the R-4 business growth model

The R-4 Business Growth model tells you what to do, but it does not tell you how to do it, and in fact it does not spell out the exact sequence of actions that will produce optimal results.

For that you need analysis, hopefully a little experience, and some engineering skills. You’re welcome to use it for your business. And if you want a little help, we’ve got a lot of experience.

But that’s a story for another time.


Want to know more about the R-4 Business Growth Model?

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“The 4 Proven Marketing Systems that Ensure 25% Growth or More during the Next 12 Months”




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