Palm Restaurant Chain Sees Stars in Its Database

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Palm Management Corp., parent of The Palm chain of upscale steak-and-seafood restaurants, has launched a direct mail sweepstakes campaign to capitalize on the hype from last week's Academy Awards and its own reputation as a dining destination for celebrities.


Late last month, the restaurant began mailing the pieces, crafted to resemble the envelopes listing the winners that are presented during the annual awards program, to 155,000 households from its 230,000-name database. Inside, instead of revealing the winners of the gold statuettes, the mailer offers an opportunity to win instant prizes that can be redeemed in the restaurant, including a free entrée, steak, dessert or appetizer. The mailer also contains an entry form to enter the "You're the Star Sweepstakes," for which the grand prize is a trip to see the 2001 Academy Awards in Los Angeles. Each of the 18 restaurants in the chain also will draw from the entries to give away a dinner for a party of 10 on Oscar night next year.


The Academy Awards tie-in grew out of a relationship the restaurant's Los Angeles branch developed with some executives from DreamWorks SKG, the Los Angeles movie studio. After a few localized promotions, including one last summer surrounding Best Picture winner-to-be "American Beauty," the company decided to do a national tie-in to the movie industry, according to Jeff Phillips, vice president of marketing at Palm.


The mailing itself has some teasers on the outside encouraging people to open the envelopes to find out whether or not they won, but when the outer envelope is opened, another sealed envelope inside directs recipients to bring it unopened to their local Palm restaurant to see if they are a winner.


The idea is to make sure that customers come into the restaurant whether or not they have won a prize, but Phillips said the restaurant was paying out prizes even if the envelopes had already been opened. In addition, he said, the restaurants are buying a round of drinks for any table that brings in the mailer, even if it is not a winner.


Unfolding the outer envelope reveals details about the prizes and has pictures of the restaurants' walls, which are covered with caricatures of celebrities. The headline reads "Enter the You're the Star Sweepstakes."


The company mailed the envelopes to all the households - as opposed to individuals or businesses - in its database, which it has built entirely through capturing the names of people who have visited the restaurants. It uses comment cards, business-card drops and other means to acquire names for the database. Direct mail is the only form of advertising the chain uses other than marketing materials in and around the restaurants themselves.


Most of Palm's direct mail is done through its house file, although it does rent some lists for an annual spring promotion that seeks to drive lunch traffic. For that promotion, which is scheduled to begin soon, the chain acquires names from American Express, The Wall Street Journal and other sources targeting only those people within a 10-minute walk of the restaurants.


Phillips said another promotion the chain conducted last fall in which customers had to bring a mailer into the restaurant was very successful. The "How Much Steak Can You Eat Before the End of the Millennium?" promotion was accompanied by an 11.5 percent increase in business, he said.

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