IHOP: A Case Study for Business Success
by Sumona Business 04 April 2022
The art of growing a business is an ever-changing one – but the rate of change has increased significantly in recent years. New technological developments and new challenges alike require lightning-fast response and innovation in order for a business to stay relevant.
It can be difficult to know exactly how to alter your approach to growing your business when attitudes change, and marketing techniques fade out of fashion with speed.
In cases such as these, it can be helpful to look at the models of another successful business, in order to see if any lessons can be learned. Specifically, a case study of a struggling business that has successfully leveraged new techniques and appetites to remain relevant and profitable. One such company is IHOP – and here’s why.
Enduring Success, and a New Approach
IHOP, or International House of Pancakes, has been a household brand for decades. Originally a Californian breakfast spot with three locations, IHOP eventually went national, as a franchise business specializing in breakfast items such as the titular pancake.
Today there are well over 1600 IHOP restaurants across the country, with even more in Central and South America.
Despite the success of IHOP’s self-created parent company in the early 21st century – bolstered by the cash purchase of Applebee’s – IHOP was a stagnating brand, in dire need of a pick-me-up.
To increase interest in the franchise and grow reach, IHOP marketing did the bold and the unthinkable: messed with the name. To announce a new menu including dinner items like burgers, IHOP announced a name change to IHOB or International House of Burgers.
The name change was a form of outrage marketing, designed to spur controversy and conversation surrounding an enduring brand – and it worked.
Catering to New Demographics
The IHOB name naturally didn’t last long, but the increase in custom did. IHOP’s next step was to expand its menu yet further, but with a focus on accessibility.
With the introduction of their first plant-based vegan breakfast menu item in February, they are acknowledging and catering to a relative minority of the consumer population. In so doing, though, they are growing their profile as an earnest franchise.
“PanCoins”
With a temporary name change that successfully alerted customers to a new menu – and eventual provisions within that menu for a new demographic of consumers – IHOP had one thing left to do: find a way to retain new customers.
A pre-existing loyalty program “MyHop” allowed customers access to exclusive discounts and coupons, something that today’s digitally switched-on consumers are less enamored with.
Cue the “International Bank of Pancakes”. IHOP leveraged public discourse around digital cryptocurrencies to launch their own currency, the “pancoin”.
PanCoins are their updated loyalty program, providing new benefits to their consumers and as a result themselves. PanCoins are earned through spending and can be spent on food items online or via QR code. Loyalty points are nothing new, but PanCoins are generously given and uniquely marketed.
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