Pancakes and Purpose: What IHOP Teaches Us About Legacy Branding

For established B2B brands, brand evolution, not revolution, may be the best strategy.

Much has been written about brand agility, the idea that a strong brand needs to remain true to core principles while always remaining open to new ideas. But this is easier said than done, especially for legacy brands. When a brand conjures up an indelible image in the minds of its customers, deviating from that image can lead to instability, or at least the impression of instability.

Think of the IHOB incident. To promote its burgers, IHOP (International House of Pancakes) claimed to have changed its name to IHOB, International House of Burgers. While it was ultimately revealed to be a marketing stunt, the name change “broke the Internet” — and not necessarily in a positive way. Consumers were confused, irked…and ultimately exasperated. Although the switch generated a lot of buzz for the brand, it ultimately failed to increase consumers’ likelihood to visit the restaurant.

Why? Because the move broke too significantly from the brand’s legacy. IHOP is beloved for its breakfast, specifically its pancakes. Like all good brands, it can flex to incorporate new offerings — but not this far, this fast. Pancakes may seem a far cry from professional services; IHOB a far different world than B2B. But the stunt has much to teach all brands, B2B included, about how to evolve their brand without spinning off the wheels.

Find your purpose — and ignore it at your peril 

A brand’s purpose is a concise statement about why the company exists for external audiences — often customers, but sometimes for the community or the world at large. For example, EY exists to “build a better working world.” Sweetgreen, the fast-casual salad chain, exists to “connect customers with healthier food.” A company’s purpose is not necessarily the focus of its brand positioning; for example, an IP law firm may exist to enable clients to better leverage IP for growth — but in the market, it might be differentiated by its international reach. However, purpose should strongly influence positioning. In fact, it should strongly influence everything a company and its employees undertake!

According to the Balance SMB, IHOP says its purpose is to “provide good, quality food for breakfast.” Most Americans would probably agree that burgers aren’t a classic breakfast food, so when the idea to change the name of the restaurant was floated, this disconnect should have raised a red flag. The proof is in the pancake: although the publicity stunt attracted media coverage and social media engagement, as well as a temporary boost in burger sales, ultimately IHOP’s traffic is still on the decline.

Not stagnation, but consideration

None of this is to say that legacy brands can’t make major changes to their strategy, audience, or offerings. However, real, sustainable brand evolution requires staying true to brand purpose. Take DeSantis Breindel client EXL. When the legacy outsourcing player needed to reintroduce itself as a technology- and analytics-driven transformation partner, it harnessed its purpose instead of wiping the slate clean. Traditionally known for its devoted subject matter experts, EXL was able to pivot while staying true to this heritage. We learned that clients appreciated the power of EXL’s AI, robotics and advanced analytics solutions. But what they admired most about EXL was its purpose-driven people who use their unrivalled expertise into pragmatic solutions. Because digital transformation is not one-size-fits all, only deep vertical knowledge — like the kind mastered by EXLers — can provide the context needed to successfully apply new digital solutions.

Great brand extensions are often marked by this kind of a common thread: a higher-order value or message that links past, present, and future. Purpose serves as this thread, serving as a guidepost for important decisions. When considering a new strategy, from an acquisition to a brand extension to a marketing campaign, leaders should ask themselves if the proposal rings true with the company’s purpose. If there’s doubt… proceed with caution!

One exercise that helps align purpose and future strategy is to gather employees to discuss aspirations. After a refresher course on corporate purpose, senior and emerging leaders are asked to individually write down blue-sky ideas for what they would do “if they were in charge.” Then, as reconvened as a group, participants discuss each idea, considering what would need to change to support each idea — not only changes in operations and investments, but most importantly, also changes in company attitude, motivation, and outlook. This workshop helps illuminate strategic paths that amplify purpose, and helps weed out ones that might dilute it.

Communicate at every step 

When a deeply trusted legacy brand makes a major change, it’s bound to ruffle some feathers. To minimize confusion and trepidation, in many cases it’s best to take a course that’s the diametric opposite of IHOP’s. Instead of announcing a potentially controversial change with little to no warning or explanation, roll out a phased, transparent launch campaign.

A clear and reasoned explanation will go far to assuage and excite customers, but it will also work wonders with employees. Internal engagement is especially crucial for B2B brands, which often have a longer, relationship-driven sales cycle. Employees must be able to serve as ambassadors, communicating the value of a new offer or strategy, while demonstrating that the company’s core purpose remains unchanged.

Thus, for our B2B clients undergoing significant pivot, we frequently recommend an internal launch and training ahead of the external launch. This gives companies time to ensure their employees are enthused and educated, ready to field questions and personalize corporate messaging for their clients.

For example, when one of our clients, a legacy digital security hardware provider, made the decision to rename to better reflect a new software focus, we executed a comprehensive internal campaign. We reminded employees of the company’s purpose — frictionless security that enables bold business moves — and used messaging, video, presentations, environmental branding, and more to illustrate how a new platform offer meaningfully continued the company’s mission. Only after a robust internal campaign did the company launch to external audiences, preparing employees ahead of time with resources, such as brand FAQs.

Just like for an internal launch, the more communication the better for the external launch of a legacy brand evolution. Sometimes, you may even want to identify a group of high value customers who need to hear about a strategy shift before the general public, or even before smaller accounts. A recent technology client did just this. By cluing in its most important customers early, it was not only able to head off any concerns, but also to pressure test its messaging and make priority contacts feel like VIP insiders.

Forget IHOP’s oblique social media teasers and its “big reveal” tactics. In B2B, where customers and investors are relying on a company’s stability, transparency and straightforwardness rules the day. Give analysts and media plenty of time to plan to cover your event. Consider a microsite or splash page that explains any change’s effect on all its diverse audiences. Appoint a designated contact to whom questions should be addressed. While hints and intrigue may play well in the lower-stakes world of consumer branding, a B2B company can hardly go wrong with sound reason and a clearly communicated plan.

HPE: A case study

In 2016, HP Enterprise’s spin-off from HP was the largest de-merger in history. The corporate separation made sense — HP’s legacy hardware business was run very differently from its emerging enterprise software offer. However, given the scale of the spinoff (each company would be valued at more than $50 billion), the prestige of the legacy company, and several recent business mishaps, market skepticism abounded.

HPE needed to signal that although it was a separate and exciting entity, it was retaining HP’s pioneering heritage and reputation for high quality. One way it was able to successfully signal this was through a careful evolution of HP’s purpose. While HP emphasized that its products enabled everyone to reinvent their worlds, HPE devoted itself to pushing businesses forward. In this way, HPE was able to demonstrate that it was still driven to create transformative technology, just in a more focused way. It was able to stake out a new, differentiated positioning while remaining true to HP’s original legacy.

True to B2B best practices, HPE also provided its employees with copious guidance about the split and the resulting brand — not only in sales and marketing, but also in IT, product development, HR, and more. The company was able to do so in a very short amount of time, which was crucial to ensuring its people were able to properly evangelize the new brand externally. HPE adopted a phased external launch, which minimized disruption and confusion. It included customers in its feedback loop, incorporating their suggestions and emphasizing the new company’s continued commitment to their accounts.

Today, with strong financial performance and a rebounded reputation, it seems the company’s strategy worked: it was able to successfully make bold moves while staying true to core principles.

Legacy brand (r)evolution 

This concept can be summarized as brand evolution, not revolution. Naturally, this doesn’t mean a company should forgo innovation or stubbornly chug away with outdated strategy. Instead, it means that for legacy brands in particular, it’s crucial to be able to point to a common purpose that informs all you do. With purpose as a guide, not only will strategic changes share a higher-purpose justifying rationale, but they’ll also be more easily communicated to and embraced by stakeholders. Because, while mysterious big reveals may attract clicks and inspire memes, in B2B, trust and understanding is ultimately far more valuable.

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