Concierge makes hay in corporate fields
Ex-secretary launches company in new market. Much popcorn later, she's glad she did
By Marc Ballon
Kelley Dunn, founder of Consider It Dunn Inc., a corporate concierge service, was just settling into her new office on the 31st floor of the marble-and-glass Pillsbury Co. skyscraper, in Minneapolis, when the phone rang. A Pillsbury vice-president was on the other end: Could Dunn round up 21 gifts with an Einstein theme by 2 p.m.? Rattled only for a moment, she started calling stores, located one with mugs and pencils bearing Einstein's likeness, placed an order, and had the gifts delivered by courier. Elapsed time: 90 minutes.
Consider It Dunn is one of several upstarts across the country providing concierge services to the employees of big corporations. "Concierge companies are suddenly springing up all over the place," says Sara-ann Kasner, president of the National Concierge Association, a new, 100-member trade association that, like Consider It Dunn, is based in Minneapolis. Because Americans are ever more strapped for time--reflecting longer hours at work and the proliferation of two-career couples--the demand for concierge services is "way, way up," explains Kasner. That's good news for Dunn, whose motto is Low prices for highly personalized service.
The strategy seems to be clicking. Dunn's two-year-old company is taking off. She recently landed as customers the Minneapolis offices of two blue-chip accounting firms, Ernst & Young and Grant Thornton. By the end of the year, Dunn expects to expand her workforce from 10 to 13. She's projecting a gross profit for the year of $80,000 on revenues of $237,000, up from sales of $41,000 in 1997. And she's talking, earnestly, about going national.
If Dunn's future looks assured, it has not always been so. In the winter of 1996, she was a single mother and a Pillsbury secretary. She scoured Minneapolis for a concierge that might relieve her of household chores. After attending a one-day seminar on the concierge business (see "Schooling at Concierge U," below), she quit her job and started her own concierge company. A college dropout with $10,000 in the bank, Dunn had no experience running a business or working as a concierge--and she had a four-year-old daughter to support.
She knocked on doors for months at downtown office buildings, asking if they needed a concierge. Nobody did. As her bank account dwindled, Dunn canceled her cable TV and lived on popcorn, shedding 30 pounds. On July 29, her birthday, Dunn recounts, she cried. "I was unemployed, turning 30, and my hot water had been cut off."
Meanwhile, she was combing Minneapolis for topflight vendors--shoe-repair shops, jewelers, and so on--comparing prices, quality, and speed. "I would put ketchup on white shirts," Dunn recalls, "and send the identical stains out to different dry cleaners to see how well they got it out." Her big break came in October 1996, when Pillsbury hired her as its first concierge. "We looked at it as a good opportunity to help our employees balance their work with their home lives," explains Mike Nordstrom, a Pillsbury vice-president.
Once in business for herself, Dunn learned everything she could about her customers. Her first week at Pillsbury's headquarters, she sent out an extensive questionnaire, asking the 2,500 employees about their hobbies and for the birthdays of loved ones. The responses she compiled in a database, which prompts her to call employees on occasions when they might want her services. Keeping her prices low is a top priority. Consider It Dunn charges corporations $45,600 a year to station a full-time concierge on-site, a rate that Dunn says is 30% cheaper than her competition.
Dunn's company looks pint-sized compared with her crosstown rival, BurCorp At Your Service. The Cincinnati-based company has 60 employees around the United States and counts Andersen Consulting in Minneapolis among its customers. "We have top-quality concierges and a better support staff and resources than they do," says Dave Lima, CEO of BurCorp At Your Service.
Dunn disagrees. She does acknowledge, however, that she has had to learn on the job about accounting, marketing, and finance. She puts in long hours, occasionally working on her home computer until midnight.
Sometimes Dunn is so busy that she needs someone to run her errands. Now she knows where to turn for help: to her coworkers.
Factors at work
As corporate concierge enters the lexicon as a new job description, the question arises: Is it here to stay? Yes, concludes Juliet Schor, a Harvard economist and leading expert on Americans' work and consumption habits.
Schor focuses on two factors--work hours and corporate interest. In her best-selling book, The Overworked American, published in 1991, Schor estimated that the average employed person spent an additional 163 hours on the job, or the equivalent of an extra month a year, in 1987 compared with 1969. In a recent interview with Inc., Schor says her research suggests that work time has only increased since 1987, although she has yet to calculate an updated figure.
The extra time that Americans spend on the job, Schor observes, is expanding the market for professional scouts and schleppers like wardrobe consultants, personal shoppers, and corporate concierges.
Typically, corporations subsidize the cost of a concierge. The cost to employers who provide the benefit is minuscule compared with many other perks they offer--for a potentially large gain. Making long hours more tenable in the workplace is critical to employers, Schor says, because "corporate America is still vested in the model that minimizes the number of people you hire."
The face of an emerging industry
Accomplishing any personal service that's legal and ethical is a point of pride for many corporate concierges. For a while, the corporate concierges at 2 Places at 1 Time, based in Atlanta, periodically picked up chilled fertility injections from a doctor's office for delivery to a patient at work in an office building. "We become an intimate part of these people's lives," says Andrea Arena, CEO and founder of 2 Places at 1 Time, who is helping to add a new dimension to the term "personal service."
Arena is a leader in the nascent corporate-concierge industry. Rooted in the hotel-concierge business, the industry emerged in the 1980s as a fee-based service for wealthy individuals. But the concierge companies quickly diversified into other markets. Landlords hired them to set up shop in office-building lobbies to serve tenants. By the early 1990s, large corporations were negotiating deals to extend concierge services to their employees. Arena claims to have been the first to land such a contract, with the local office of Andersen Consulting, in 1993.
LesConcierges, a 150-employee concierge service based in San Francisco, exemplifies the evolution of the industry. Its founder, Jane Winter, worked as a special- projects manager at a Westin Hotel before starting her own concierge company in 1987. She broadened the business to include office buildings, and in 1995 entered the corporate market, which is now the fastest-growing part of her business, approaching half of the $13 million in revenues that LesConcierges generated in 1997. Customers include Sun Microsystems and Texas Instruments.
Concierge companies typically receive a monthly retainer, which amounts to the bulk of their revenue. LesConcierges charges corporations $10,000 a month for an on-site concierge, who arranges for, but does not perform, services. In contrast, 2 Places at 1 Time actually runs errands, such as picking up dry cleaning, buying clothes, or feeding the cats. (It will do virtually anything that doesn't involve children--including delivering chilled fertility injections.) Arena charges corporations a $7,875 start-up fee, and then a monthly sum of $6,000 for a full-time concierge and $4,700 for an additional "runner," if needed. Employees pay their employers $5 to $10 per hour of service to at least partly offset 2 Places at 1 Time's charges.
In a tight labor market, the corporate concierge is a benefit, along with signing bonuses and stock options, that appeals to corporations as a device to recruit and retain employees. Texas Instruments, for example, hired LesConcierges because it wanted to have "the most competitive benefits program in the semiconductor industry," says Jeff Asmus, the chip maker's employee-services manager.
But when the economy cools, when cost cutting is paramount, or when novel corporate benefits come under scrutiny, a concierge service may look expendable. In 1992 PepsiCo hired its own in-house concierge at its headquarters in Purchase, N.Y. Two years later, it canceled the service. "It just wasn't efficient," says Elaine Franklin, PepsiCo's manager of corporate information. Now employees rely instead on an on-site store, dry cleaner, and travel agent. --Samuel Fromartz
Jack of all trades
Among the tasks that the concierges in the North Brook, Ill., office of Cincinnati-based BurCorp At Your Service reported they performed one Wednesday in June for the employees of a large consulting firm were--
Giving two people ideas for Father's Day gifts
Locating five sheets of music for old-time songs
Researching a particular style of shower liner
Purchasing Brazilian currency
Buying 50 pop-out maps
Ordering and delivering a birthday cake
Purchasing a computer adapter
Handwriting 20 thank-you notes
On and off for 25 years the Harris Poll has surveyed U.S. adults on work hours per week, asking, "How many hours would you estimate you spend at work, housekeeping, or studies, including any travel time to and from the job or school?" The results:
|Work Year||Median No. of Hours|
|Source: Louis Harris and Associates Inc.|
Schooling at Concierge U
A Ph.D.-level course it's not. It's only a one-day seminar taught to aspiring corporate concierges by Mary Naylor, a businesswoman whose college major was communications. The course's very existence testifies to something of a groundswell of interest in this emerging, albeit fledgling, industry.
Naylor offers the course several times a year as a sideline to her own $6-million business, Capitol Concierge, which is based in Washington, D.C., and provides concierge services in office buildings. An article in Inc. about the company (" The Road to One-to-One Marketing," October 1995) resulted in a flood of calls to Naylor about the concierge business and prompted her to create the seminar. In the two years that Naylor has been offering the course, 15 would-be concierges have traveled from as far away as Brazil and have shelled out up to $3,000 each to attend.
Naylor's instruction covers topics like how to budget expenses and recruit and retain customers. Among her pointers: to identify an office building that would benefit from a resident concierge, look for one with a high vacancy rate, which might induce the owner to spring for a concierge in hopes of gaining a competitive edge. To track down the best vendors, contact the local chamber of commerce, trade associations, and even hotel concierges.
Naylor estimates that about half her students have gone on to start concierge companies or incorporate them into existing businesses. Not surprisingly, Naylor is bullish about the market for concierge services. The services are starting to pop up in unexpected places, including subway stations and hospitals, she points out. And, she adds, she expects to see many more. --Marc Ballon
To learn more about corporate concierges, go to www.inc.com/issue/sept98 .
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