IHOP has decided that it’s time for a change. For a limited time, International House of Pancakes will now be the International House of Burgers.
As social media lit up Monday with talk of IHOP’s temporary name change to IHOb, industry observers questioned whether an inverted P, with a corresponding refocus on burgers, would lead to a surge in sales for the aging brand.
But the chain known for classic A-frame pancake houses with blue roofs becomes the latest chain to embrace a marketing tactic that is rocking the restaurant industry. The game plan: Find a creative gimmick, push it hard with teaser ads and what hopefully will become a viral social-media campaign, then stand back and hope hungry customers show up.
In the industry, the strategy is called “‘spray and pray.” said Erich Joachimsthaler, CEO of the brand consulting firm Vivaldi. “You spray it (the message) massively and you pray that the person gets into the store.”
The world of chain restaurants grows ever more treacherous with slim margins and increased competition from old and new players as well as upstarts, like food trucks and supermarkets with in-store dining (called grocerants.) The industry is increasingly turning to marketing stunts to draw in customers — both the existing business of repeat ones and new cash from new diners.
The IHOP switch which had pancake lovers panicking — IHOP is still known to many by the name it once had, the International House of Pancakes — was brash enough to grab media and online attention. Other recent examples of short-term stabs at fickle diners include the Spielburger by Carl’s Jr./Hardee, a play on film director Steven Spielberg’s name as his movie Ready Player One that debuted in March; Starbucks’ numerous limited-time offer drinks including last spring’s social media sensation the Unicorn Frappuccino; KFC’s merry-go-round of new Col. Sanders portrayers; and Wendy’s snarky tweets.
“We’re at the tipping point of where social and digital will become the bigger driver of awareness, sales and traffic for most advertisers,” said Brad Haley, chief marketing officer for IHOP, er, IHOb.
It seems to be working. Between June 3 and Monday when it touted a name switch was about to occur, IHOP’s online mentions totaled more than 362,000, compared to 21,000 during the same period in May, the social-media monitoring firm Brandwatch calculated.
The question remains whether buzz translates into more foot traffic and higher customer tabs for the brand, whose parent company, Dine Brands Global, has its challenges. Besides IHOP, the company owns Applebee’s. Both table-service restaurant chains have been undercut by quick-service, order-at-the-counter operations that offer lower prices.
As a result, Dine Brands Global saw revenues drop from $681 million in 2015 to $605 million in 2017, according to Bloomberg data, though an estimated $736 million rebound is expected this year.
A stunt “increases the chances someone will patronize your business. It can be great for a mature brand that hasn’t had much hype lately,” said Marlene Towns, a teaching professor of marketing at Georgetown University. “It’s become our new normal, especially with this new younger demographic.”
The industry hopes that the tactic works because restaurants have struggled with declining sales for years. The need to grab and hold customers’ attention and try to move into new markets seems key in a crowded environment. McDonald’s, for example, saw its revenues sink from $25.4 billion in 2015 to $22.8 billion in 2017, according to Bloomberg. Yum Brands — which has the Taco Bell, KFC and Pizza Hut brands — also saw a big drop, from $13.1 billion in 2015 to $5.9 billion in 2017. Another revenue drop is predicted for both this year.
“We’ve become a PR and stunt-based consumer market,” Towns said. “It’s all about the ‘it’ thing of the moment and that moment has gotten shorter over time. They’re a flash in the pan, they’re buzzworthy and they get people talking.”
In the pre-social media days, that talking was generated by an advertising and marketing campaign that included coupons or other promotional discounts. And a name change was often permanent: Kentucky Fried Chicken switched to the abbreviation KFC in 1991 and the referenced to “fried” — an unpopular term among increasingly health-coscious consumers — has been absent ever since. Today, it’s all about having the right, often colorful, look for Instagram and snazzy limited-time products to snag Millennials or fad-loving tweens.
Consultant Joachimsthaler said he doesn’t think the tactic will work.
“Some companies still think today in this day and age that they can play that game, and I think it is certainly no longer working,” he said.
Chili’s new Boss Burger contains nearly a day’s worth of calories and a week’s worth of guilt. Nathan Rousseau Smith shows us the 1/2 foot tall sandwich.
Follow USA TODAY reporter Zlati Meyer on Twitter: @ZlatiMeyer and Ben Tobin @TobinBen
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