To lure locals into his restaurants, Jack Baum offers them something hard to resist: a pat on the back. The chairman of Dallas-based Canyon Cafes sends congratulatory letters and gift certificates to recently promoted area workers. "Come pop a cork with us," read the personalized greetings, which offer free champagne or wine at any of Baum's 19 restaurants.

The letters bring in lots of new business with little effort or expense. For 45 minutes a day, an administrator combs through local newspapers for promotion announcements, finds employers' addresses, and mails about 30 letters. Baum estimates the program cost $1,625 in 1995 while generating a 29% response rate and $106,177 in revenues. He also figures that each new customer returns three times per year.

By coding the letters he can track the companies whose employees respond most often. The program was so popular with Southwest Airlines employees that Baum called its head office and traded $2,000 worth of dinner passes for $2,000 worth of round-trip tickets to New Orleans and Phoenix. He then held a contest for his employees and customers. Customers, however, were only offered a chance for a trip to Phoenix, where Canyon Cafes has a restaurant. "I wasn't about to send them to a place where we didn't have one," says Baum.