• by May 16, 2002

How do you know when a product has finally become a brand? Or when a brand has finally made it as a true leader amidst a faceless sea of undifferentiated me-toos?

Sure you can look towards the much-loved brand tracking study, filled with its squares and circles (all within an approximate 5% margin of error, of course.) Or perhaps you might count on sales (hopefully long-term over short-term) to indicate brand strength. Advanced metrics and measures like lifetime value of the customer or 80:20 Pareto Analysis help as well.

My gauge (or at least one of them) is a little less scientific. It’s basically when your customers become your sales-force – or at least it would appear that way.

How many times have you heard people telling you that they’re Mac-converts or seen people arguing the various merits of Palm vs. Handspring? No, they’re not geeks; they represent your most loyal customers – true advocates – and might as well be on payroll when all the business they funnel in through personal endorsements or recommendations is factored into the equation.

Trust me, if I had a buck for every person I’ve influenced to buy a Palm Pilot, I would be swimming in moolah right now. If you happen to have the misfortune of sitting next to me on the bus or in the subway and don’t have a Palm, well let’s just say that you will soon! And now I have the opportunity to turn this speculation into remuneration, because Palm just launched their Palm Champions program, which attempts to do just that.

Here’s how it works in about 100 words:

A Palm loyalist registers to become a Palm Champion and through a web-based interface is able to customize HTML emails to people they feel would be interested in purchasing specific Palm models. The recipient receives the recommendation, together with several links to obtain more information about the product. They also receive an incentive of free software if they purchase the product at the Palm Store online and indicate the email address of the person who referred them. They also have to register in order to partake in this offer. The referring person has now earned palm bucks, which they can redeem online for Palm product.

There are elements of the program, which are still a little clumsy and counter-intuitive (I’ve never been a big fan of making consumers work too hard for a little extra Chanukah geld), but nevertheless it’s moving in the right direction.

When presenting this master-plan to one of my colleagues, he looked at me rather puzzled and said, isn’t this just a variation of refer-a-friend? At first I felt foolish, but when I thought about it, I realized that this is not only an evolution of the vastly-in-need-of-an-overhaul refer-a-friend tactic, but also combines the powerful elements of word-of-mouth, viral marketing, affiliate marketing and CRM, whilst talking to and rewarding the very people most likely to keep coming back – time and time again.

Technology has facilitated this value exchange in the perfect win-win-win situation. The “referrer” earns Palm bucks, which are “on brand” (as opposed to a one in a gazillion chance to win a Porsche – cool, but off brand) and relevant to a Palm loyalist; the “referee” receives qualified and credible advice and information to help them make their choice (I’m taking the high road here assuming recommendations are genuinely made, with the incentive taking a back seat) – not to mention free software; the “reference” (i.e. Palm) receives an acquisition and retention combo supreme, smothered in a wealth of data and sprinkled with goodwill for good measure.

What are some of the implications to marketers out there? Well for starters, the old refer-a-friend idea is….old. It’s like getting someone to opt-in to an email list without a good reason: no incentive, no thanks.

Instead, consider the refer-a-friend v2.0, which directly plugs this tactic into a more meaningful business objective and strategy. Also consider the implications of rewarding your most loyal customers who, let’s face it, probably know more about your product then your own salespeople do. Then couple this with monetizing and facilitating some degree of control over word-of-mouth and viral marketing.

When your customers act independently as your silent sales force, think about what this means to your business and your brand. It surely tells you that you’re doing something right. The question is, what are you going to do about it?

Whatever you do, don’t take this for granted.

- Joseph Jaffe is Director of Interactive Media at TBWA\Chiat\Day in New York, where he works with clients including Kmart, ABSOLUT Vodka, Samsonite, Embassy Suites and Cunard. His primary focus is to highlight interactive's value and benefit in meeting his clients' integrated business and branding objectives.