Briefing: Wednesday, 13 June 2018 Inside the Executive Suite (Tips, Tricks, and Techniques used by the Nation’s top Executives… to get things done.) Is IHOP Crazy or What? “Beyond the serious, fake, and sports news this month, a big marketing-oriented news story this week involved IHOP. The breakfast-focused brand announced a name change: IHOb, plus a modified logo featuring a smiley face. Its uppercase O and new lowercase b supplied the eyes for the face. IHOP teased the name change for several days, fostering speculation about whether the b would represent breakfast , bacon , or even Beyoncé . On Monday, IHOP ended all the speculation, revealing that the b stands for burgers . The change highlighted the brand’s addition of seven new Ultimate Steakburgers . Company president, Darren Rebelez, proposed that turning around the p to become a b showed IHOP is “’taking the burgers as seriously as we’re taking our pancakes.’” IHOP Is Crazy . or Not Online chatter focused on how crazy and ill-conceived the name change is. Social media is wonderful for providing loud voices to people whose message reach is orders of magnitude larger than their understanding about messages they share. Since we aspire to speak to a focused audience with real understanding on topics, let’s review the IHOb strategy to determine whether IHOP is crazy or savvy. What Goes into Strategy? USA Today and The Motley Fool addressed the IHOP move as just another restaurant brand using gimmicks to drive attention and sales. While the IHOP build-up implied a permanent name change, the reveal showed a short-term move to introduce burgers and boost traffic and sales. The IHOP approach involves several strategic moves coupled with misdirection. The original message suggested a brand strategy change: a significant, long-term modification in the brand’s attributes (i.e., its name). In reality, the name change is a promotion: a short-term change in the brand’s marketing arsenal to improve business prospects. The reason for the misdirection is clear. If IHOP teased a burger promotion, nobody outside its fans would care. When a known brand signals a major name change shrouded in secrecy, it is buzz-worthy. Subscription Information The Armada Inside the Executive Suite is a part of the Armada Executive Intelligence System; a combination of 10 e-mailed and online briefings. It is available by subscription only. For more information, contact [email protected] or visit www.armada-intel.com. Armada Executive Intelligence Brief With most strategic cards are on the table, the real strategy becomes clearer, and we can see how IHOP adapted previous brand strategy lessons in its approach: • IHOP took a cue from the Coke/New Coke branding debacle, planning its strategic retreat before going public. It avoided dealing with the after-the-fact fallout from what some audience members perceived as a big, negative change. • It added misdirection and suspense to strategic moves that other food brands (most recently Starbucks) are employing to boost off-hour sales. Starbucks wants more customer visits for cold drinks in the afternoon. (Yet, it didn’t run a campaign implying that it was going to start opening at noon.) IHOP used subterfuge to elevate a ho-hum product change and business-shift strategy to be front page news. • One point we don’t know yet is whether IHOP will reuse the strategy. Consider how Google changes its logo nearly daily on its website, or Coke personalizes bottles each summer with names and emotions. IHOP is in a position to run this play a couple more times in the future, using names changes to highlight new menu offerings. Crazy or Savvy? At this stage, it looks as if IHOP is definitely savvy in crafting this strategic move. Gaining Attention It’s obvious that one IHOP objective involved gaining attention for a brand that lurks in the background of popular culture. Launched in 1958 with its full name, the International House of Pancakes, it switched to the IHOP acronym twenty-five years later. A page-one story in The Wall Street Journal interviewed several individuals who struggled to identify what the IHOP acronym stands for. Despite a concerted effort to upgrade the brand over the last decade from its original look tied to A-frame buildings, then, IHOP isn’t among the restaurant brands in public discussion. Now, twenty-five years after the IHOP name transition, the IHOb move produced a significant boost in online attention. A USA Today story reports that Brandwatch estimates a 5x month-over-month jump in the brand’s online mentions. How long the brand can sustain that conversation level is yet to be seen. Chances are, especially since the name change is temporary, IHOP conversation levels will return to normal as rapidly as they rose. Crazy or Savvy? If IHOP went into this strategy understanding that the big win might be a short-term attention bump, then it is definitely savvy. If they figured this is a smart way to introduce a sustainable brand change, then it is crazy. Gaining a Toehold Nobody thinks of IHOP for burgers. It says it landed on this product enhancement based on customer research on how to draw additional lunch and dinner traffic. With this crazy/savvy move into the burger market, IHOP finds itself in direct competition with brands, such as Burger King and Wendy’s, noted for their social media wit and agility. Both brands responded directly and quickly with humorous takes on the IHOb announcement. Burger King even cooked up its own Pancake King logo in retaliation. Whether IHOP fully played out competitive scenarios is unknown. The response from well-known burger players, however, signaled that IHOb has made its way into the category or these brands wouldn’t have paid attention. Crazy or Savvy? We’ll go with Lucky. With significant social media presences, having Wendy’s and Burger King jump into the back-and-forth with IHOP provided that much more attention with the online crowd. - 2 - Armada Executive Intelligence Brief Savvy Is as Savvy Does over the Long-Term Right now, IHOP looks savvy with this strategy. The big question is whether it grabs a bigger share of the burger market, pulling business from leaders and/or increasing average check size and volume among current customers. This question won’t be answered this week. Check back next year to see whether its numbers really moved or barely blipped for the final verdict! Links: • USA Today: IHOP, or if you prefer, IHOb, bets big on name-change burger stunt https://www.usatoday.com/story/money/2018/06/11/ihob-unicorn-col-sanders-why-restaurant- chains-like-stunts/690100002/ • The Motley Fool: Why the IHOP "Name Change" Might Work https://www.fool.com/investing/2018/06/12/why-the-ihop-name-change-might-work.aspx • The Wall Street Journal: Some People Don’t Know What the P Means in IHOP, Let Alone the I, H and O https://www.wsj.com/articles/some-people-dont-know-what-the-p-means-in-ihop-let-alone- the-i-h-and-o-1528745433 Warm regards, Keith [email protected] - 3 - .