Technology: Hot off the Presses
IHOP units customize marketing with an online print-management tool.
By Christine Zimmerman, Contributing Editor -- Chain Leader, 7/1/2006
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IHOP corporate realized a few years ago that with more than 1,200 locations across the country, most of which are franchised, it can get pretty tricky presenting a unified marketing message. One unit down South, for instance, may have something very different to say in a local coupon promotion than an IHOP television campaign might convey nationwide.
The Glendale, Calif.-based family-dining chain wanted to make its overall brand image consistent, yet still allow franchisees to meet their customers’ unique pricing needs and regional preferences. After all, country-fried steak in one area of the United States is chicken-fried steak in another. So in 2003 the company began using a print-management system that helps units create customized marketing materials—including menus—online.
“The system is helping franchisees drive down printing and distribution costs, but this is also about that fact that we are sending the right message to guests and representing the IHOP brand appropriately,” says Patrick Lenow, director of public relations and communications. “We have 1,250 restaurants acting like a chain, not a bunch of units with some disjointed effort.”
Tools of the Trade
The system, called eTools, allows franchisees to visit a secure Web site and peruse a catalog of materials such as coupons, door hangers and even newspaper ads that they can customize for their stores. It also has templates to help franchisees create marketing materials to address unique situations such as road construction by a unit or new competitors in the area.
IHOP franchisees can also order national point-of-purchase materials online.
Franchisees use the system to order menus online twice a year. Lenow explains that menus are IHOP’s primary marketing tool, so it is important to keep them fresh with limited-time offers and items labeled as “new.” The franchisee can go into the system to add or delete menu items or adjust pricing. The core items are there, but there are specific variations from which to choose. IHOP’s regional offices then go into the site and review the franchisees’ choices to make sure the overall market strategy is on target.
Orders for menus and other marketing materials go to the vendor, where they are printed and distributed. Franchisees can still use local printers if they have an urgent need for the materials.
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Prior to automated menu printing, franchisees were printing menus on demand, depending on their needs. “We were not doing a good job taking advantage of efficiencies of scale,” Lenow says. “With this paperless system, there is no more faxing or overnighting of proofs back and forth.”
Lenow won’t put a dollar amount on IHOP’s overall savings but does say that the average franchisee has seen 15 percent to 20 percent savings on menu printing alone. “Considering the quantities they print twice yearly, that is significant,” he says.
“Other savings, though, include getting our franchisee back out with the guests instead of poring over proofs, and having materials out there that we are proud of as a corporation,” Lenow adds.
Ron Paul, president of Chicago-based foodservice consultancy Technomic Inc., says a system like this meets a growing need in the industry. “Chains need to learn to customize,” Paul says. “Menus within a given market won’t even be the same. A unit in the city will have different needs than a unit in the suburbs, for instance.”
Paul adds that IHOP’s tool solves some of the cost and logistics problems of customization while still allowing corporate to maintain control of quality.
A Major Investment
While franchisees must pay for their own printed materials, IHOP Corp. paid for the system. “This was our investment to help franchisees focus on what they do best—serving guests,” Lenow says.
IHOP won’t reveal how much it paid for the system, except that it “was not a minor investment,” Lenow says, adding that working with a third-party provider enabled efficiency at a lower cost. “We knew the payback would be number of years. We are reaching payback time.”
Kent Barkouras, CEO of MyPrint, the Irvine, Calif.-based printing company that developed eTools, says that setting up the program can cost less than $10,000, depending on the complexity of the system.
ETools’ next version, due out this summer, will allow self-administration, so users can load items to catalogs, add and delete other users, and create customized reports so managers can review data on how marketing materials are being used.
But all this technology is not intimidating, Barkouras insists, noting IHOP has 100 percent system participation. “Before using eTools, 30 percent of the units had never even placed any kind of order online for b2b purposes,” he says.
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