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JUNE 12, 2018 //     

IHOP's New "B": Boon or Blunder?

Credit: IHObBy: Paul Sears


On June 4, IHOP teased us all with a big flip. That is, flipping the “P” in the logo upside-down to become a lower-case letter “b.” From this moment forward, executives told the media IHOP would henceforth be known as “IHOb.” The brand changed its logo on its website and social media profiles, as well as its sign in at least one restaurant. 

But, what did it all mean? IHOP asked us to patiently wait seven days until we could all tune in for the big reveal. 

And tune in we did, although, not without a hilarious response from social media. From Chiquita hoping the “b” meant “bananas” to Netflix tweeting it was changing its name to “Netflib,” the web was determined to crack the riddle. There was even some initial backlash, as influencers noticed the similarity to the logo of feminine products maker, o.b.  On June 11, the wait was over and we all learned the answer: “b” was for “burgers.” 

But was it the right move? The Internet didn’t think so, and negative memes exploded after the announcement. One communications pro featured LeBron’s Game 1 antics and captioned his tweet: “International House of Bankruptcy.” Burger King attacked with a “Pancake King” logo, and Wendy’s said it was “not really afraid of the burgers from a place that decided pancakes were too hard.” IHOP was steadfast, replacing every “P” with a “b” all day long.  When one influencer asked on Twitter if it was a joke, IHOP quickly replied “Nobe, it’s real!” 

When the dust settles, what will IHOP gain and what will it lose? Brand value can account for up to 30 percent of a firm’s stock price, and brands with strong reputations can outperform global averages by up to 31 percent.  IHOP is playing high stakes poker with a brand that took 60 years to build. 

On the surface it may seem like a worthy gambit. Sales for IHOP have recently plateaued and, in recent years, other QSRs have branched out beyond their niches.  When expanding into new products and markets, marketers seek out competitive advantage. Yet, for IHOP, the burger segment is already highly saturated with competitors… and with fat.  

Consumer tastes align with healthier, sustainably sourced restaurant meals with bolder flavors and ethnic flair, according to Forbes’ 2018 restaurant trends report. Fast-casual consumers have stepped up to fine-casual, and are willing to pay more for an experience. Meanwhile, brand loyalty in the hyper-competitive restaurant industry can evaporate almost overnight. IHOP’s social media woes demonstrate it didn’t have adequate permission from consumers to make this kind of pivot.  It’s also arguable whether consumers actually want more burger options these days.

For 60 years, IHOP has been a go-to for breakfast, and consumers have come to expect a reliable product and experience. It’s natural for the brand to want to push harder on its lunch offerings as a way to drive sales (and it has been selling burgers for years). But it doesn’t have enough credibility to take an ownership stake in burgers at a brand level, compared to established players. IHOP’s brand-level flip suggests its entire offering is taking a 180-degree turn. They are about only one thing, but now that’s burgers. 

While more than a year in the making, IHOP’s move is simply a short-term marketing campaign that uses an iconic brand as a pawn to create buzz.  Much like “fake news” which plagues social media, IHOP has now introduced the “fake rebrand.”  It may or may not translate into increased lunch sales. What happens if sales don’t get that needed boost? At what point does a bold move on offense turn into a strategic retreat?  

IHOP executives have said there will be a moment in time where the “b” will eventually become a “P” again, regardless of sales performance. And, unlike sunsetting a product promotion, that brand-level change-back will be front and center for all to see. At that moment, will consumers find themselves nostalgic for June 11, when restaurant history was made?  Or, will they witness a tail-tucked run for the hills from yet another business that errantly put short-term sales above the enduring value of its brand? 

Time will tell. But luckily for IHOP, the Internet will still be there to watch it all unfold.

Paul Sears is senior vice president of Integrated Marketing for Allison+Partners.

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