"Dear Valued Customer: "On behalf of my Pepsi-Cola Company colleagues everywhere, I am pleased to invite you to the 1999 Pepsi Customer Appreciation Invitational at the Pinehurst Resort and Country Club--America's golf mecca and site of the 1999 U.S. Open Championship.

"To play golf at Pinehurst is an indescribable experience--a good-spirited, first-class combination of fun and competition. Offering no guarantees on your score, I can assure you that you will thoroughly enjoy playing Pinehurst's world renowned Course No. 2 and its modern- day counterpart, the Centennial Course No. 8."

Who wouldn't want to receive this letter in the mail? For the 130 or so executives invited to Pepsi's Annual Customer Appreciation Invitational at Pinehurst, the chance to play on the same course where Ben Hogan, Bobby Jones, and Arnold Palmer have made history is a prize in itself.

"I've been at Pepsi 22 years, and I don't think I've ever seen a customer event that's as powerful as this one," says Nick Giachino, division vice president of Pepsi-Cola North America in Chicago. "And practically all the feedback we get from customers is that this is a first-class event and the best they've ever been to."

The Invitational was Giachino's brainchild, started 3.5 years ago. At the time, Pepsi already had a four-year-old alliance with Pinehurst, one of the oldest and most prestigious golf resorts in the country, and was selling its products there. Moreover, it was a major sponsor of the U.S. Open, which is always held at Pinehurst.

"I said to myself, "Here we have a great property, with terrific golf courses, first-rate facilities, excellent food, a wonderful atmosphere, and top management who go out of their way to make us feel really good about being at their facility," Giachino says. "Wouldn't it be the perfect place to host our top customers across the U.S. with the people from Pepsi who are responsible for those accounts, as well as our key bottlers who work with these customers day in and day out?"

How It Works Pepsi decided to make the invitational a four-night, three-day affair (long enough for everyone to play two different courses) in October, before the holiday season. Each of the 65 teams consisted of a Pepsi representative and a customer, mainly Pepsi's national salespeople, and their biggest bottlers, each with one guest, who range from large grocery-store customers to national chain customers (Taco Bell or Subway, for example).

Last fall's festivities kicked off on Sunday, October 17, with an an informal cocktail reception followed by a buffet dinner. The next morning, everyone headed for the green for 18 holes. On Tuesday, the groups switched courses, and that evening, Pepsi held the gala awards banquet. Everyone left Wednesday.

Because the group was so large, it was divided into six flights of 20 each, ranked according to players' handicaps. Pinehurst doesn't take participants' word about handicaps, but actually calls their hometown clubs to verify them. "You'd be surprised how many times on the forms they say they're a 20, but they're really a 12!" says Tom Pashley, director of business development for Pinehurst. "People are surprised when they come to the opening reception and we tell them we've made adjustments."

The 100-plus players are generally split in half between the two premier courses: No. 2, considered the course to play, because it's U.S. Open territory; and No. 8, also outstanding but newer, and according to Jim Nolan, senior vice president of sales and market development for Pepsi-Cola North America, "the second most intriguing course to play at Pinehurst."

VIP Treatment Along with its blue-chip courses, VIP treatment is a given. "We manage the event as if it were a PGA Tour event," says John Wagner, managing director, Pinehurst Championship Management, and director of the 1999 and 2005 U.S. Open Championships. "We wait on them hand and foot from the time they get here to the time they leave."

Like PGA players, Pepsi executives and their guests get personalized check-in. They receive their gift bags, containing a money clip with their name engraved on it, plus a sweater, a golf shirt, and a long-sleeved shirt. This past year, they received a pair of golf shoes, with Footjoy's own salespeople fitting everyone on the spot.

Every year, Pinehurst's Pepsi event planners attend the PGA Merchandise Show to seek out an item that will be new to guests. Then they meet with Pepsi and let the company go shopping. "For 2000, they're talking about spending a lot of money on one or two really great items--a $400 retail item, rather than more shirts," says Pashley. "We did a duffel bag in faux leather in 1998, and this year, we're going to do a garment bag. Over time, people who have attended year after year develop a collection."

The Invitational dinner always has a surprise, most recently antique-style glassware emblazoned with the Pepsi logo. "Pinehurst's banquet team then set up an area where everyone could create a Pepsi float for dessert in the antique glasses," Pashley recalls.

The tone of the culminating event, the awards banquet, is serious fun. "You hear funny little anecdotes, which I comment on as emcee of the prize giveaways," says Giachino. "And there's a prize for just about everything--from closest to the pin and longest putt to low net and best daily score--so that all players go out feeling like winners."

The overall winner and his or her teammate receive green blazers--just like those at the Masters--with the Pinehurst Putterboy logo embroidered in gold. They're also invited back the next year.

Pinehurst also adds special touches to the program. Last year, the event was held right after the U.S. Open. Giachino recalls, "The Open ended in dramatic fashion on the 18th green, when Payne Stewart made a 15-foot putt to win. ... We were able to recreate it by allowing each player to hit that same putt." Pinehurst gave those who made the shot a prize of a dozen golf balls, then put their names in a hat and drew one winner, who won a set of Titleist irons. Out of about 100 people in the tournament, six made the putt.

What's Ahead? Pinehurst and Pepsi will continue to try to top themselves each year. They plan to integrate golf video and instruction from the Dave Pelz Short Game School and the David Leadbetter School (which are under the Pinehurst Golf Institute umbrella). Under consideration, according to Nolan: regional qualifying events at other PGA properties.

But the activities and prizes are only the backdrop for the relationship-building that takes place. "When you spend two days golfing with a customer," says Nolan, "not only do you get to understand their business, you get to understand them more as a person. You have time to talk about relationships, philosophies, principles, and approaches. You gain a level of insight far beyond the traditional business relationship.

"We do a fair number of customer interaction events," he adds, "but this one is held up as being very, very productive."