The brilliance of All-You-Can-Eat Pancakes at IHOP

The restaurant businesses has been doing this for some time, that is super sizing menus with carb and low cost items. But what perfect timing for the International House of Pancakes. At the beginning of the year in which many have made New Year's resolutions to stay away from restaurants, exercise more, and lay off fat, sugar and carbs, IHOP has announced all you can eat pancakes until February 19 to fill its restaurants. It is a maneuvre of pure marketing brilliance.

The economics that drives such a decision is that consumers will buy what is perceived as more value for the money. Individual ticket prices can increase if there is perceived value and in food that often means volume. That is to say, for $5 plus you can buy a typical eggs, ham, hash browns and sausage breakfast elsewhere or have the same with all you can eat pancakes at IHOP. The choice is clearly attractive.

And for restaurants, what is the best way to get the most volume per least dollar spent? The cheapest item on the plate is not the poultry or meat products but rather carbohydrates -- toast, pancakes, hash browns, etc. Carbs and sugars may be particularly unhealthy for the body if too much is eaten but they make great economic sense. Consumers think so too.

Making an extra pancake is a very cheap thing to do and having all you can eat pancakes will attract many customers into the restaurant during a low seasonal ebb in business. When I ate at my local IHOP restaurant this morning (see photo), there seemed an especially large number of active looking teenagers alongside the adults taking advantage of such an offer. That translates into weaning a new generation of customers.

Someone is thinking at corporate headquarters, coordinating efforts with national marketing too. Nicely done. For the rest of us who want to keep off the weight, we have to exercise discipline. But on occasion if we want to reward ourselves with a great tasting breakfast that has value for the money, IHOP is the place.

It seems to be working -- at least in my area. I went in this morning and saw the local IHOP hopping with business. I like it when a franchisor has enough marketing moxy to drive business into the local store, especially when they help fill the seats in the lean months.