Concierge services can help loyalty marketers increase customer retention and increase customer spending Mark Robeson, senior vice president sales and marketing, for VIPdesk said during a Loyalty 360 webinar.
“From the ordinary to the extraordinary, concierge services provide your customers with access to a virtual personal assistant that can provide them with anything, anytime, anywhere, Robeson said, likening the service to a help line or a lifeline for customers.
A concierge service is a mixture of:
- Services traditionally delivered via a hotel concierge (e.g., dining, transportation)
- Services traditionally delivered via a personal assistant (e.g., luxury travel planning)
- Services traditionally delivered via a high-end travel agent (e.g., helping with arrangements on a business trip).
Concierge Service Trends
The worldwide industry market is $1.5 billion, with 60 percent of that in the U.S., though much of the future growth will be in developing markets where people are unaccustomed to having wealth.
The concierge market is expected to grow greatly in the next five years, due to improving per capita disposable income, particularly among households that earn more than $100,000, which is one of the industry’s primary target markets, according to Robeson.
Travel concierge services are popular throughout the U.S. and Europe: A survey conducted in 2010 by Euro Rail on a panel of European Travelers revealed that 41 percent of Italian travelers, for instance, require the presence of concierge services.
A few areas of future growth:
- As people are living longer, and seniors are more active than they have historically been, there is a need to have services geared towards seniors, Robeson added.
- Pet owners are another large and growing market that has started a niche concierge market, Pet Concierge. The numbers speak for themselves: Americans spent $50 million on their pets in 2011, and 69 million U.S. households their homes with one or more pets.
Just as technology has impacted most forms of loyalty marketing, concierge delivery is no exception, according to Robeson. Concierge providers are going mobile via mobile apps and taking to Twitter, Facebook and other social media sites. Some brands, including Starwood, are taking their concierge presence one step further, incorporating the benefits of concierge and overall loyalty programs with social media sites such as Foursquare where users can “check in.”
Foursquare can be viewed as a social concierge delivering ‘insider’ information about local places to guests who often are not familiar with the town—at the very moment they need it, Robeson said.
The initial benefit of a concierge service is that it helps build a relationship between a brand and its customers, Robeson said, pointing to the example of credit card issuers that utilize their concierge service to place welcome calls to new customers.
“These brands know that they have to “hook” their customers within the first 60-90 days of their relationship—after this time it is increasingly difficult to engage the customer. By using concierge to place welcome calls, and explain benefits that come with the card, there is a proven increase in card spend and retention,” Robeson said.
“Concierge usage, plain and simple, helps drive the actions that are the typical levers of loyalty programs: Acquisition, engagement, spend, and retention,” Robeson added.
According to Visa, when a concierge service as a benefit is marketed to potential customers, the open rate and acceptance rates each increased by 10 percent.
Because concierge service helps build a relationship with customers, and engage them with a brand, the service helps with customer retention and increased acquisition, Robenson said.
In a typical customer service environment, customers have to call one number for assistance with travel, one for information on benefits, another to redeem points, etc. Customers spend a great deal of time on hold, or being transferred from one representative to another. A concierge service, on the other hand, offers a streamlined customer experience, boosting customer retention.
“Increased spend is something [else] that we have seen with our customers, time and time again,” Robeson said. “Cardholders who use the concierge service spend more on their card, and renew fee-based products at a higher rate than non-users.
An extra benefit of excellent service, in addition to promoting customer retention, and bringing us back to the very important topic of revenue, is that excellent service increases spend, Robson said. Consumers — not only affluent consumers but all consumers — are willing to pay more for excellent customer service.