Advertisement

IHOP goes IHOb in social media blitz to draw the post-breakfast burger crowd

IHOP goes IHOb in social media blitz to draw the post-breakfast burger crowd
IHOP changed the signs at its flagship restaurant on Sunset Boulevard in Los Angeles. ((Michael Dunker / IHOP))

When IHOP said it would be tweaking its name to IHOb, the news immediately went viral. Some thought the new letter stood for bitcoin, others thought breakfast or brunch.

But IHOP, famous for its Rooty Tooty Fresh and Fruity pancakes, is now the international house of … burgers, at least for a while.

Advertisement

The marketing gimmick was launched last week — and the meaning of the new acronym revealed Monday — to highlight a push by the breakfast chain to capture more of the hamburger crowd, which it already serves with a full menu.

And at least in terms of cutting through the social media chatter it has been a smash success. The tweet announcing the name change had more than 5 billion impressions last week, and “IHOb” was one of the top trending topics on Twitter on Monday morning.

That helped send the stock of Glendale parent company Dine Brands Global Inc. up nearly 3% for the day.

Dine Brands Global has had marketing campaigns that went viral before, such as a “Dollaritas” promotion in the fall advertising $1 margaritas at its Applebee’s casual sit-down restaurant, though nothing like the current one.

But even with the apparent marketing success, it’s unclear whether the name change will have more than a temporary effect on sales.

“Pizza Hut ran a similar campaign about 10 years ago when it changed its name to Pasta Hut,” noted Stephen Anderson, senior vice president of investment banking firm Maxim Group. The campaign helped boost sales for a year at Pizza Hut, he said.

Then there’s the matter of obscuring IHOP’s hard-won reputation as a place to go for the first meal of the day.

“The rebranding does surprise me because when you’ve got a brand as established and known as IHOP, you don’t want to change that,” said Malcolm Knapp, a research analyst and founder of Malcolm Knapp Inc.

The temporary promotion is actually more limited than it appears. Although the name change is on full display on IHOP’s website and social media accounts, other than one restaurant on Sunset Boulevard in Los Angeles, no restaurants have had their signage changed.

Dine Brands may have had reasons to shake things up.

Like much of the sit-down dining industry, IHOP has performed poorly in recent years, with same-store sales decreasing by nearly 2% last year. The latest quarter’s numbers, however, saw a 1% rise, the first positive same-store sales in a year.

“We want to remind people that IHOP is the ultimate breakfast experience, and it’s an icon in that business, but we also want to remind them that we serve lots of other great items throughout other day parts,” said Dine Brands Chief Executive Stephen Joyce.

Joyce, a former hospitality executive, was brought in last year to replace Julia Stewart as chief executive. Stewart had run the company for 16 years and made a big but poorly timed bet in 2007 right before the financial crisis to buy Applebees for $2.1 billion, making the company the nation’s largest sit-down restaurant company.

It also didn’t help that preferences changed, with diners moving away from restaurants where they order at their table to fast-casual concepts such as Chipotle and Panera Bread.

Advertisement

Although the burger business is highly competitive — saturated with rivals that include fast-food outlets and better-burger joints — Dine Brands sees opportunity.

Americans consume 8 billion burgers annually, essentially too good a market to pass up, said IHOP President Darren Rebelez.

“Burgers are the most consumed food in the country,” he said. “We looked at lunch and dinner as this huge white space for opportunity.”

The deeper move into the burger business wasn’t lost on rivals. Wendy’s corporate account tweeted on Monday that it was “Not really afraid of the burgers from a place that decided pancakes were too hard.”

Along with the temporary rebranding, IHOP is revamping its burger selection with a new recipe for the meat and with seven options on the menu. The burger choices range from a $6.99 classic burger to a $10.79 Mega Monster.

Neither Rebelez nor Joyce would say how long the restaurants would be rebranded, but both said they didn’t believe the change would affect the company’s image.

“We’re always going to be known as a breakfast place,” Rebelez said.

Advertisement
Advertisement