Introduction to Concierge Industry
The role of the concierge is to provide personal assistance to wealthy clients. By personal assistance, I mean lifestyle management, booking flights, vacation planning, household management, and traveling, etc. The price and charge of concierge service vary from client to client.
The reason wealthy people hire concierge service is to save their time from the routine tasks. We live in a competitive world, and it is difficult to choose from various options, and the concierge would provide you the relevant information to make the right decision. Because you don’t have time to read and analyse information from multiple websites, the concierge would do it for you.
There are people and companies specialized in concierge service. When the client contact asks them to book a flight, arrange transport or meeting, the appointment with the doctor or trainer, and they do it for their clients.
SWOT analysis of the concierge service industry would help us to study in detail the internal strengths/weaknesses and external opportunities/threats. Here it follows;
Strengths of Concierge Service Industry
Some of the internal strengths of the concierge industry are as follows;
Not Easy Entry
It’s one of those industries where the setup cost is less, but difficult to enter. Because you need a reputation and a brand name to initiate your business. If you are a nobody, then people won’t hire you because they don’t know you. People would contact you if they have heard your name from some valid sources.
To be proficient in concierge services, you need a great experience. You have to guess exactly what your client wants, and offer him the same service that he’s looking for. If you meet the demands of your client, only then he’d hire you. Otherwise, a bad reputation precedes your name and you would lose clients.
Less Competition in some Areas
The concierge service industry is very competitive in some areas like California and LA. But the competition is very low in some other regions like New York. If you establish your business in the less competitive market, then it’s probable that you would pick up clients easily if you have a good reputation.
The profit margin is very high in this industry. Usually, we calculate the profit concerning the costs and expenses. All you require is knowledge, practical experience, and connections. If you have acquired these expertises, then your expense would be very low and high-profit margin.
Visible and Reputed
One of the most interesting facts of the concierge service industry is that you deal with the wealthiest clients all the time. Therefore, staying in the company of high-profit people and offering services to them would make you visible in the press and media. When you’re in the media, then your reputation would attract more clients.
Since the initial investment and other fixed and variable costs are less, which makes this concierge service business less risky. Unlike other businesses where the costs and expenses are very high, it would make you bankrupt if you don’t meet a certain income level. Here, concierge business won’t make you bankrupt, and you won’t have to sell your assets.
Weaknesses of Concierge Service Industry
Some of the internal weaknesses of the concierge service industry are as follows;
Difficult to Differentiate
Booking flights, arranging transports, creating appointments with trainers and doctors, and vacation planning are such services that every concierge person offers the same thing. Therefore, it’s very difficult to differentiate your services from competitors. It’s because the majority of the clients want the same trainer, flight, and tourist spot.
Fewer Start-up Costs
Fewer start-up costs could be advantageous and disadvantageous at the same time, because when the initial cost is low. Any reputable person could enter into the concierge service business and target your clients with the same services.
Sometimes the transportation cost, restaurant cost, and other costs are high. When such costs are high, then you’re left with a limited profit margin. If you charge high on expensive products/services, then it would be very costly for your clients. They won’t contact you in the future because of providing expensive services.
Opportunities for Concierge Service Industry
Some of the external opportunities of the concierge industry are as follows;
Additional Online Sale
If your concierge service business is up and running and you have a list of wealthy clients, then you can start your online store and start selling additional products/services to your clients. You will no longer rely on the suppliers for the delivery of products/services; you’d have your outlet. You can run two businesses side by side.
When you’re a well-reputed concierge service provider by having a list of wealthy clients, and you are also not interested in running your online store. Affiliate marketing is another great option, where you refer your clients to other stores and earn commission through referrals.
Whether you’re referring your clients to other stores (affiliate marketing), or you’re running your store. Either way, you can have an additional profitable business up and running. If the prices and costs are high, you won’t have to worry about your charges. Affiliate marketing and your online store would provide you sufficient earning to keep things running.
Develop a Relationship with Wholesalers
Concierge service business also provides you an opportunity to develop and establish a relationship with wholesalers, if you have your online store.
Sell your Business
Your brand reputation as a concierge service provider and having a long list of wealthy clients is also an asset. You can sell your brand and client list at a very high price.
Threats to Concierge Service Industry
Some of the external threats of the concierge industry are as follows;
Bad Reputation Hurt Your Business
If somehow you misjudge and miscalculate the wishes of your client and unable to satisfy his requirements; then it would not only be one unsatisfied client. He would share his bad experience with his friends and colleagues, and they would hesitate to contact you next to you. Your competitors would exploit your mistakes.
Competitors Offer the same Products
The concierge service industry is one such industry where it’s very difficult to differentiate yourself from the competitors. It’s because every client wants the same top-class doctors, trainers, hotels, transport, tourist places, and household products, and those products are scarce especially in the season. You have to be very influential to get your hands on such limited items.
High Insurance Cost
Insurance companies take advantage of the reputation of the concierge service provider, and they sell insurance at a very high price. Costly insurance means that it would add up in the expense list and you’ll have less profit to enjoy and expand your business.
If your concierge business is running well, then you’d have many opportunities to take advantage of what an ordinary person doesn’t have. If you successfully capitalize on such opportunities, then you can secure your future. High insurance cost is one hurdle on the way.
The economy of the country is unstable and going through a rough patch, then it would make people cautious. They would hesitate to spend their resources on such luxurious services.
After diligently studying the swot analysis of the concierge service business, we have concluded that it’s a very profitable business. If you’re well experienced and have a good reputation. But you shouldn’t ignore the bad reputation, unstable country’s economy, and high insurance and other costs.