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For anyone born after 1986, this is going to be an obscure reference, but the governance and regulatory compliance vendor eGastalt may have rediscovered the lost marketing secret of Faberge Organics when it comes to addressing the burgeoning health care IT market.

Back in the late 1970s and early 1980s, woman (and some men) were fixated with long, wavy and feathered hair. The trick was keeping the hair light and oil free, and that required a superior shampoo (or so the beauty industry would have you believe). And no one marketed that concept better than Faberge through it’s “and they tell two friends” campaign.

It was an attempt at sparking or imitating geometric marketing before there was such a thing. Actress Heather Locklear famously held up her bottle of honey-like Faberge Organics raving about its effects on golden locks. She was so pleased that she “told two friends, and they told two friends and so on and so on….” The idea is like the doubling a-penny-a-day concept we learned in school – by the end of a month you’d have more than $1 million dollars. Or, in this case, more than 1 million Faberge Organics users.

Security governance and regulatory compliance (GRC) is hardly like shampoo, but it does have the potential of replicating the Faberge concept in the health care market thanks to the provisions of the Health Insurance Portability and Accountability Act (HIPAA) and HITECH Act security requirements.

Under these laws, heath care providers are required to safeguard the medical records and personal identifying data of patients. The laws classifies those governed by the law in two categories: Covered entities and business associates.

Covered entities are easy to identify. They are hospital, medical facilities, clinical labs, physician practices and organizations of that nature. Business associates encompass a much broader set of companies ranging from medical billing services to IT support services. In other words, anyone who touches the medical data or networked systems of a health care provider is a business associate governed by HIPAA.

And that’s what eGastalt is counting on.

Jim Hare, vice president of eGastalt’s vice president of worldwide sales, recently briefed Channelnomics on its new B2BA (Business to Business Associate) marketing program. The idea is not to try to market its compliance tools to covered entities, it’s approaching the covered entities with the idea of using its tools to ensure the compliance of their business associates.

It’s a brilliant idea in which the HIPAA covered entities act as the marketing accelerators by eGastalt. Assuming that each covered entity has at least 10 business associates, eGastalt will gain immediate access to 10 accounts through one business contact.

This is where things get really interesting is when the math is done on benefits to eGastalt’s partners. eGastalt’s average sale price is $1,250 per year per account, which results is $12,500 in business from one health care contract (again, using the assumptions above). But eGastalt says its partners are generating an addition $4,000 to $6,000 per account in additional compliance business resulting from its compliance tools.

Do the math: The Fabarge strategy results in $62,500 in compliance and IT business from one health care contact. Replicate that model across 10 health care accounts, and the business benefit quickly ramps into the hundreds of thousands of dollars in new business.

Of course, the success of eGastalt’s business depends on covered entities being complicit in imposing compliance requirements on all their business associates, and disclosing all those business associates to eGastalt and their solution providers. So, this program comes with the caveat of “actual millage may vary.”

Caveats aside, eGastalt’s strategy is sound. And it should work. It has the benefit of not just being another referral program, but an indispensible tool in a health care provider’s arsenal for ensuring regulatory compliance throughout out its immediate IT infrastructure and extended network of service providers.

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Lawrence M. Walsh is CEO and president of The 2112 Group, a technology business advisory service that specializes in optimizing indirect channels and partner relationships. He’s also the executive director of the Channel Vanguard Council. He is the former publisher of Channel Insider and editor of VARBusiness Magazine. You can reach him at lmwalsh@the2112group.com.

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Larry Walsh:@lmwalsh2112| Channelnomics: @channelnomics