Jack Smith
Feb. 21, 2006


When you call Chez Escargot to plead for a reservation, do they laugh and say they have no table for you? Are you down in the dumps because an old college pal said his people would get in touch with your people, and you had to admit you didn't have any people?

Does it sometimes feel as if the whole world is a V.I.P. list and your name is not on it?

If so, you have stumbled across the rationale for one of this country's fastest growing small businesses: the personal concierge. Like a hotel concierge, the personal version makes life easier, more efficient and more exhilarating for clients. Nowadays, though, personal concierges are more and more invisible yet are taking on many new tasks.

These concierges may come with your credit card, your office lease or your new home. The button on the side of those stylish Vertu cellphones that sell for $4,900 to $31,850 connects you to a dedicated Vertu concierge. On some new cars, your personal concierge may be built-in. "We will get you into that restaurant, we'll get you past the lines at a club, we'll be your people," said Mary Naylor, the founder of VIPdesk, which provides concierge service for OnStar, the General Motors Corporation's satellite-based security, communications and convenience system for cars.

The services that a personal concierge provides can vary widely. Some pick up your laundry, walk your dog or wait for the cable guy. Others don't show up in person but can arrange hotel and airline reservations, schedule business meetings and plan special events like corporate outings or weddings. A few possess the clout that a Manhattan A-lister may envy.

"We really don't like to talk about it, but we do hold some tables in reserve for some personal concierges," said Georgette Farkas, director of public relations for the restaurant Daniel on the Upper East Side. "We have to. They send us so many customers."

Even more rarefied experiences await the patrons of Circles, one of the largest concierge services in the United States. Besides garden-variety perks like Super Bowl or World Series tickets, Circles can arrange for celebrities to show up at your cocktail party, get you a flight in a jet fighter or even land you a bit part on a prime-time TV show like "CSI: Miami."

There was a time when Americans took pride in doing things for themselves, but that was before "I'm swamped" became a national mantra. "Two things happened more or less simultaneously in the mid-1990's that launched the personal concierge industry," said Janet Kraus, Circles's chief executive. "The loss of personal time and the advent of the Internet, which allowed us to capture the resources necessary to offer services worldwide."

Ms. Kraus underestimated the potential — and the challenges — of the concierge business when, in 1997, she and her business partner, Kathy Sherbrooke, founded Circles with $27,000 from their savings and credit cards. Their original plan was to provide everyday services — dog walkers, house painters, errand runners — to consumers, but they soon gravitated to corporations, which offered many more opportunities. Instead of marketing their services to individual consumers, they now have companies paying the fees and promoting Circles's services to their customers and employees.

"It's relationship marketing," Ms. Kraus said. "To a corporate employee, we become a benefit of employment. To a company's customer, we become a reward for loyalty."

Yet there was a problem. Their original capitalization was not large enough to help them grow. So they sought more money, which came in four stages over four years: first they raised $500,000 from friends and family in 1997, then $1 million from private investors. Venture capitalists invested $15 million in 1999 and $10 million more in 2001. "Our biggest expenditures were for technology," Ms. Kraus said. "We invested in call-center technology, Internet infrastructure to develop databases, security to handle large clients, and staffing and training." After nine years in business, the company employs more than 500 staff members, with phone banks in Boston and the Toronto region serving 250,000 individual users with fees paid by corporate customers like Merrill Lynch and Aramark. "We're growing at a double-digit rate and expect that to continue for the foreseeable future," Ms. Kraus said.

Circles has moved so far beyond errand running that it now dreams up "needs" for consumers. Who, for instance, wouldn't jump at the chance to attend a party in a private box at the World Series, getting to meet the players? These events are paid for by Circles's corporate clients and offered to their customers or executives. Circles also offers more exotic experiences, like taking private golf lessons from a touring pro. "We never lose sight of the fact that we're here to make you feel special," Ms. Kraus said.

Another concierge service that has grown far beyond its humble beginnings is VIPdesk. The company was formed in 1997; the founder, Mary Naylor, was already a veteran of the field. She started her first company, Capitol Concierge, in 1987. "I borrowed $2,000 from my mother and moved into the basement," she said.

Capitol was based largely on the traditional hotel model, placing concierges in lobbies of office buildings in the Washington area and dealing mostly with consumers face to face. After 10 years, with concierges in 80 office buildings, Ms. Naylor decided to create VIPdesk to offer a national model to customers like Citibank and MasterCard, through a central call center. In 1999, she rethought this model and, with an eye toward lowering overhead and reducing turnover, raised $12 million for the technology that would allow her concierges to telecommute.

"It takes a very high skill set to meet our clients' expectations, and our 130 concierges are much happier working from their homes," she said.

VIPdesk receives 40,000 requests each month, and Ms. Naylor projects more than $20 million in revenue by 2007. "The fee structures are different depending on the client," she said. "If a corporate client has a million users, their fee is calculated on an actuarial basis with no cost to the user."

The biggest customer is OnStar, whose Luxury and Leisure option costs $69.95 a month for unlimited access to a concierge. "The OnStar customer can be sitting in traffic while his virtual staff is shopping for a Valentine's Day present or setting up a business meeting for him," Ms. Naylor said. "We got tickets to 'Harry Potter' for one man who called while he was driving to the theater." For another OnStar customer, VIPdesk bought a dress just like one that Julia Roberts wore in "Ocean's Eleven."

"Once they push that little blue button that links them to their concierge, they'll use it over and over again," Ms. Naylor said.