IHOP Launches A New Digitally-Enabled Loyalty Program

Food & Drink

IHOP is the latest restaurant chain to upgrade its loyalty program as brands jockey to gain customers who have become more digitally dependent throughout the past two years.

The chain today launched its “International Bank of Pancakes,” offering guests the opportunity to earn digital tokens, called PanCoins, that can be used to buy more food.

Guests can join the program through IHOP’s website or mobile app and can earn rewards–called PanCoins–by spending money with the brand. There are three ways to earn PanCoins: Guests can pay directly from the app via a QR code at their table; enter a code or scan a bar code on a physical receipt; or place a to-go or delivery order via the brand’s website or app.

Every $5 spent is worth one PanCoin, and one PanCoin is worth one pancake. Guests can also trade their PanCoins in the “Stack Market” for use on other assets, including menu items and merchandise.

During a recent interview, CMO Kieran Donahue said the program purposefully plays on a “crypto” theme and is meant to be playful.

“People come into IHOP because they want to have fun experiences and we are focused on rewarding existing and new guests for spending time together with us,” she said.

Unlike the brand’s previous program, “MyHop,” which focused more on discounting and coupons, the International Bank of Pancakes takes an “earn and burn” approach.

“This is the first time we’ve launched a true loyalty program. Part of what’s important is we’ve integrated our technology, so we’re focused on better digital experiences for our guests,” Donahue said.

Indeed, digital experiences have become more important for the brand, as takeout and delivery sales are twice the size they were in 2019 and now account for nearly one-fourth of all transactions. This digital-based loyalty program should continue to provide a nice tailwind for the brand while driving trial and incremental visits.

IHOP hinted at a new loyalty program during parent company Dine Brands’ Q2 earnings call in August, when most chains were starting to asses a path to recovery. During that call, President Jay Johns said the pandemic was a major driver of the loyalty launch, stating it “forced us to reflect and refocus on relationships with our guests within a transforming restaurant industry.”

Donahue adds that the company’s research proves personalization and customization are important for its guests and said the new program will allow them to customize their orders in a more effective way because the technology is integrated from the consumer-facing app to the kitchen.

“We had an IHOP app and website prior to COVID, but you learn a lot when you double your business for off-premise and one of the things our guests told us is they need some help customizing. The ability to pay at the table was also important for our guests,” she said. “At the same time, we worked with our franchisees to make sure International Bank of Pancakes created efficiencies within our day-to-day operations. The program exists within our existing procedures. Our staff also told us we can do better with orders coming in to be more accurate. So that was also a focus.”

Loyalty programs in general have clearly become a focus for brands across the industry, with launches and iterations coming from brands like Qdoba, Taco Bell, McDonald’s, Del Taco, Popeyes, Burger King and so forth.

Consumers have both said and proven they want such programs. Nearly 50% of Rewards Network survey respondents believe reward incentives are more important now than they were pre-pandemic, for instance.

And, during Yum Brands’ Q2 call in July, for instance, executives noted that Taco Bell Rewards members spent 35% more at the company compared to their pre-loyalty behavior. Meanwhile, Chipotle’s rewards customers also spend and visit more, according to CEO Brian Niccol.

Notably, the International Bank of Pancakes launch comes about a year after Donahue joined IHOP after serving 20 years in the hospitality industry–which has long been a leader in loyalty. This experience provided her with some case studies as well.

“I have 20-plus years seeing the benefits of loyalty for both the business and the guests, including more frequency and engagement. Fortunately, Dine Brands and IHOP were already investing in technology to get us to this point,” Donahue said. “Guests now expect that you’re going to make it easier for them and that you’re going recognize their loyalty to your brand. In my mind, loyalty programs are now table stakes.”

An early access period for “founding members” of the International Bank of Pancakes runs today through March 29. Sign-up bonuses include 10 PanCoins, free birthday pancakes and no-fee delivery on IHOP app and website orders. After the early access period, members receive five PanCoins after their first purchase, free birthday pancakes and exclusive offers.

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