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THE INC. LIFE

Branding Blunders: IHOP’s Giant Potential Mistake.

The real goal of branding should be to build a brand that’s good enough

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BY Jim Schleckser - 12 Jun 2018

Branding Blunders: IHOP's Giant Potential Mistake.

PHOTO CREDIT: Getty Images

Every marketer dreams of making it to big time one day--the day they graduate into the world of branding.

Branding is a sexy topic, at least according to branders, who will tell you all about how much power and value you can reap when you build an iconic brand.

I get that, especially when you have a brand like Coca-Cola, something that's been around for more than 100 years and where multiple generations of consumers instantly know and respect it.

Yet, it's also really difficult to put any real quantifiable numbers around what a brand might be worth. While marketing people will tell you that a great brand drives sales or growth, it's really hard to prove that with any concrete numbers.

One truth about building brands is that it's expensive: it costs a lot of money to design and run all the different marketing and advertising campaigns needed to build awareness with your customers. On top of that, you have to recreate every piece of printed material, electronic media and signage. And again, it can be difficult to know if you get any kind of return when you make that kind of sizable investment.

That's why it's my belief that the real goal should be to build a brand that's good enough: something that your customers recognize and that connects them with what your business does best and that's it. The only time to change it is when there is a massive strategy shift to a much more profitable position and the current brand doesn't match the new position.

Which brings me to the curious case of the International House of Pancakes, or as it was commonly known, IHOP. Everyone of a certain age knew exactly what IHOP was and what they could expect when they ate there: a good meal at a reasonable price. And it's been that way for 60 years.

But in June 2018, IHOP announced that it will be changing its name to "IHOb" and teased everyone on social media to basically guess what the "b" will stand for.The branders were successful in that regard in that there have been plenty of guesses offered that range from "breakfast" to "burgers" to "burritos." Turns out, it's burgers.

What's interesting is that if the goal of the rebranding is to get consumers to think of the restaurant as a place to get more than breakfast, it's an awfully expensive pivot to make with the change of a single letter. It makes you really wonder if it's worth it. Entering the extremely crowded space of burgers doesn't seem like a ground breaking strategy.

(Though, if the "b" stood for bacon, I might change my mind. I could get behind the International House of Bacon.)

Think about it: the change of that one letter means that the company is going to have to invest hundreds of millions of dollars to rebrand things like napkins, coffee cups, menus, and signs across thousands of restaurants across the U.S. While many are franchises, this cost is forced onto the small business owners of those operations.

Then, you need to add in the cost of running the marketing and advertising campaigns to help promote and explain the promise of the new brand, we could be approaching a billion dollars.

For that kind of investment to pay off, they're going to really need to move the needle in terms of sales--despite an increasingly crowded market for fast casual dining.

What's interesting is that a few years ago Dunkin' Donuts wanted to expand its menu to its customers, which it did without changing its name--which would have been insane. Although they are currently testing a move to Dunkin'.

Doesn't it beg the question of why didn't IHOP just spend the money from its rebranding effort on a new campaign explaining it was also open for lunch or dinner or whatever message they're trying to get across? Or, what if they invested that same amount of money in renovating their restaurants or upgrading their menu? Especially, since the parent firm has last money in the last 12 months?

The point is that simply rebranding by changing a single letter has the potential to become a black hole kind of expense that the restaurant chain will be lucky to climb out of. It will be extremely tough for them to rewire the brains of generations of people who instantly recognize the IHOP brand with a new brand, IHOb, that quite frankly, doesn't even roll off the tongue well.

We'll check back in a few months to see how IHOP's done with its rebranding effort. But until then, my advice is not to fall in love with the idea of making big investments in your brand. There are lost of other ways to spend that kind of money with bigger results. There are far more success stories that prove that when it comes to branding, you just need to be good enough.

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