Q&A: IHOP’s CMO Discusses IHOb and the Toughest Aspect of Being a Challenger Brand

'We knew we had to do something big and bold,' said Brad Haley

Haley will take the stage as one of the keynote speakers for Challenger Brands: A Brandweek Event, Feb. 6-7, in New York.
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One of Brad Haley’s goals at IHOP over the past 18 months has been to unlock what he called the “latent love” for the chain.

Since its launch in Los Angeles in 1958, IHOP has been a symbol of Americana. But in more recent times, the DineEquity brand had struggled to stand out in the hyper-competitive world of sit-down restaurants.

Then, last summer, Haley changed IHOP’s iconic name. Well, sort of.

Haley, CMO of the Dine Brands Global-owned brand since August 2017 and the one who brought in Droga5 to reinvigorate its advertising, will take the stage as one of the keynote speakers for Challenger Brands: A Brandweek Event, Feb. 6-7, in New York.

Ahead of that gathering—which will feature C-suite executives from Hulu, Casper, Allbirds and Skinnygirl, among other companies—Haley talked with Adweek about the now-famous IHOb stunt (and ways to keep that party going), digital innovations, restaurant remodels and pancake-inspired swag.

Adweek: Did your success with the IHOb “name change” alter your opinion of stunts? Will it make you more or less likely to return to that marketing tactic in the future?
Brad Haley: To announce our Ultimate Steakburger lineup to a world with many, many burger options, we knew we had to do something big and bold. The IHOb campaign tapped into the enormous love people have for this 60-year-old brand they grew up with and leveraged consumer insights to generate a lot of attention while, at the same time, having a lot of fun.

As for whether we’d incorporate similar marketing strategies and tactics into future campaigns, we absolutely would. When done with a clear strategic purpose and backed by insights, news-making initiatives can greatly amplify your paid media schedule and positively impact the business in both the short and the long term. In our case, the promotion boosted IHOP’s lunch and dinner business and drove total day sales gains, with burgers sold peaking at a four times improvement on a year-over-year basis and holding steady at two times throughout the balance of 2018. IHOb was the most effective campaign in brand history, generating 22K media stories, $113M in earned media ad value and holding the No. 1, No. 2 and No. 4 positions trending on Twitter at the same time. Introducing burgers challenged what people thought of IHOP and gave us credibility in the lunch and dinner space that we plan to continue to build upon in the future.

"[W]e can’t simply rest on our laurels, since [millennials and Gen Z] can be fickle consumers."
-Haley on retaining millennial and Gen Z consumers

How is the chain targeting the coveted Gen Z and millennial consumers, and how might that evolve in the coming year?
Fortunately, we already have a very high percentage of Gen Z and millennial guests now. However, we can’t simply rest on our laurels, since they can be fickle consumers. [T]hat demands that we not only provide them with a great experience every time they come into one of our restaurants or order online for take-out/delivery, but that we also create interesting and fun ways for them to engage with us on other occasions and through other mediums.  Our goal is to capture their imaginations and spark conversations through initiatives that exemplify our brand values and evoke a feel-good factor in the hearts of our guests. In some instances, that will be an integrated marketing campaign to celebrate a new menu introduction and, in others, it might be an opportunity for us to have some IHOP-branded fun with a moment in culture.

In 2019, we’re planning some exciting new food promotions that will capitalize on the positive momentum we achieved in 2018. Obviously, as the broader media landscape continues to evolve, so have our media plans to better reach these valuable targets—along with others—aided by state-of-the-art analytics tools. We’re also planning to reinvigorate our CRM platform to offer IHOP fans a personalized digital experience that makes them feel like an IHOP insider and gives them more of what they want from us, whatever their personal preferences may be. Membership in the program will come complete with exclusive access to news, experiences and, of course, some free pancakes, too.

What impact has mobile ordering, delivery service and new to-go packaging had on the brand?
More so than ever before, people want the food they love on their own terms, and online ordering/delivery does just that. This past year we’ve taken a significant step forward in the to-go space, expanding our IHOP ‘n Go online ordering platform to the entire system, rolling out a new mobile app and expanding delivery to the majority of our locations. But, before we did any of that, we developed proprietary packaging so that our core breakfast items would remain hot and fresh throughout the transit process.

"More so than ever before, people want the food they love on their own terms."
-Haley

Today, our off-premise business makes up about 7 percent of our total sales, and our partnerships with national delivery providers, like DoorDash, are growing rapidly. We expect to have 1,000 restaurants participating in delivery programs by early 2019. So, obviously, we believe there is still a lot of opportunity for incremental growth in the off-premise space and look forward to continuing to innovate in this area.

Can you share any updates on the restaurant remodeling and a little of the strategy behind it?
Development is a key focus for the brand. We’re opening IHOP restaurants at an incredible pace both in the U.S. and abroad, all of which is in stark contrast to the rest of the industry. In 2018, we opened another 75 to 85 restaurants, including our 1,700th IHOP in the U.S.

Our Rise ‘N Shine remodel program complements our efforts to build new restaurants by infusing a modern, fun feel that better matches the tone of the brand. After all, our logo includes a big smile, so that’s how walking into an IHOP should make you feel. But the strategy goes far beyond cosmetic changes; we’ll also be incorporating more technology to make the overall dining experience even better without taking away from the server interactions we know our guests enjoy.

What’s the toughest aspect of being a challenger brand—especially in a category, casual restaurants, that has struggled lately?
As the leader in the Family Dining segment, we don’t really consider ourselves a challenger brand. However, IHOP has successfully used innovation to challenge people’s expectations of the brand for the past 60 years, and we’re not slowing down one bit. Motivating differentiation is the best course of action in order to thrive in a mature and competitive category, and that is infused in everything we do, from our menu to our communications.

For example, besides flipping our ‘P’ to a ‘b’ to draw attention to our new Ultimate Steakburgers introduction, we also created IHOPS, a limited-edition pumpkin pancake stout that was inspired by the flavors of our fall pancake lineup. Many, many brands have pumpkin-flavored menu items, like IHOP’s very popular Pumpkin Spice Pancakes. So to help break out of the pack, we “tapped” into another fall tradition and created a new, never-before-done beer flavor. More recently, when we launched a line of branded merchandise, we put our own twist on it: PancakeWear is the only collection that lets people wear their love of pancakes on their sleeve (or sweatshirt, in our case). Ultimately, we want our guests to have fun with us, and the best way to do that is by coming up with engaging, unique experiences and content that they’ll enjoy but that also deliver on our broader communication strategies.

 

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