Your Concierge Service Awaits

“Concierge” is one of the names brokers are giving to programs that link their clients to vendors that provide home-related services as a way to keep their business relationships going after their clients have left the closing table. “These programs are a way to give you a customer for life,” says William M. Raveis, president of William Raveis Real Estate and Home Services, Fairfield, Conn.

Although the programs typically incorporate preclosing services such as title insurance, the focus is on the wide range of services that homeowners commonly need after closing, such as painting and utility hookups. The programs aim to capitalize on the growth of dual-income households, which often have the money to lavish attention on the house but lack the time to do any legwork, such as screening remodeling contractors.

If you haven’t yet taken that first step toward launching a program that refers clients to home-related services, there’s good news. The early entrants to the field have done the hard work for you, and many of them sell—or soon will—a ready-to-go package. All you need to add are the local vendors and the strategic spin.

Avoiding launch problems

Concierge programs are as different as the companies that launch them, but there are a few things to keep in mind as you go forward with yours, say some brokers who have programs in place.

• Dedicate staff. Someone needs to solicit and stay in contact with vendors and track clients. Sales associates don’t have time to do it.
• Charge vendors--not clients--either to participate or to advertise. They’re getting exposure to a prime group of consumers.
• Go electronic, at least in the long term. If your program isn’t built around your Internet site, and you don’t have software for tracking your clients, you can’t operate your program efficiently.

Another piece of advice brokers give: Don’t get hung up on liability fears. Give clients a choice of vendors. Once they pick a vendor, the business relationship is between those two parties. Liability isn’t an issue for any of the brokers with concierge programs contacted for this article.

The total approach

Do you want to position your company as a one-stop shop for all homeownership needs?

William Raveis’ company offers referrals to more than 270 vendors in about 40 types of services and employs a dozen salaried staff whose job is to bring clients and vendors together and to keep clients coming back whenever they need a home-related service.

It’s a model that people are responding to. Six months into the program, the company’s Web site is getting a thousand hits a month from people seeking services, and vendor banner ads are on target to bring in $1 million in revenue in fiscal 1999, says Raveis. Pretty soon, 50 percent of the company’s revenues will come from the program, he predicts.

The Raveis program is built around its custom Internet-based software package that enables staff to track where clients are in the pre- and post-homebuying process. It automatically makes contact when clients are expected to be interested in a particular type of service and provides an electronic link between the company and the vendors.

The software package is key to the whole program. “You need the software product to have the tracking and reporting mechanism that makes this work,” Raveis says. “We direct the traffic. When we see that clients have completed financing, we call them up. ‘Would you like to have a moving company?’ We don’t wait for them to come to us.”

Raveis says sales associates are high on the program. It adds to the value they bring to a client, they don’t shoulder the administrative burden, and since the revenue is generated from banner ads, the program isn’t subsidized through a higher commission rate.

The company is planning to market its software, probably sometime this year. About 30 companies have asked about the software since the program was launched, Raveis says.

Employer-benefits approach

The concierge program set up by Judy Columbus Real Estate and Relocation in Rochester, N.Y., solved a vexing problem that all practitioners in that slow-growth area face: how to generate new business when few people are moving into the area. The answer was to tailor a home services referral program to existing local corporations. Participating corporations now have a perk they can offer staff and new hires without putting much pressure on their budget, says Jamie Columbus, company president.

Since its launch two years ago, 65 corporations have signed on. Employee benefits cover preclosing costs, including free appraisal and title insurance, and discounts on services included in closing costs such as home inspection and radon testing. There are some fun things, too. Columbus springs for dinner, delivered to the house, the evening the homebuyer moves in.

Right now many of the referrals are for preclosing services, but the company is set to launch an affiliate program that expands the benefits for postclosing services, Columbus says.

Columbus is opening the concept to licensing this year. Licensees will get electronic and hard copies of the program manual, necessary forms, marketing materials, and programs for maintaining and tracking clients.

Nationwide approach

With its affiliates spread throughout the country and of every possible size, Coldwell Banker designed its nationwide program to be as flexible as possible, says Regina Taylor, the company’s senior vice president for marketing.

The basic package is built around custom Internet-based software for tracking vendors and clients, managing program administration, and developing marketing materials. Brokers design their own program. Coldwell Banker provides broker training, and the broker oversees staff training.

For smaller affiliates that aren’t ready to launch a full-blown program, Coldwell Banker provides brochures and discounts from participating national vendors. The brochures tell clients about the types of services homebuyers typically need after moving into a house. Participating national vendors include Aon Home Warranty and North American Van Lines.

Take home a kit today

Companies that just have a few thousand to spend to get a program off the ground can buy a ready-made business model from Home Remedies in Hewlett, N.Y. For about $3,000, you get a manual, forms, promotional material, and consultation with Home Remedies President Debra Cohen. Software is not included.

The package is tailored to the work-at-home entrepreneur, and that includes the practitioner who wants to set up a referral service as a way to boost business. “This is a perfect correlation for practitioners,” says Cohen. “They already have a list of contractors. They just need to turn it into a business. With this package, they can do that within eight weeks.”

Cohen developed the package after launching her own referral network three years ago. Since then, 46 networks have been set up using her model, including HomeNetSolutions, launched by Philadelphia practitioner Steve Adler and his wife, Jamie.

Since its launch a year ago, HomeNetSolutions has gone beyond the startup package from Home Remedies. “It’s a good package, but we’ve taken the concept to the next level,” Adler says.

The company operates a Web site, homenetsolutions.com, and uses off-the-shelf software to track clients and vendors. The company is getting about 100 calls a week from clients, mostly for remodeling work, and has more than 140 vendors--all of them meeting screening criteria.

The absence of custom software is a disadvantage of going the Home Remedies route, but for the small broker trying to get a foot in the market quickly, the model is positioned as an interim step. Home Remedies has worked out many of the difficulties for you. “I’ve done the research,” says Cohen. “I’ve developed a commission structure, drafted liability clauses, prepared mail and ad copy, created invoice billing forms, included sample forms and sample agreements with contractors, and added accounting spreadsheets--everything’s there.”

Whether you build a program from scratch or move forward with an existing model, you’re tapping into something practitioners agree is key to residential real estate’s going forward. “It’s the future of our industry,” says Alex Perriello, president and CEO of Coldwell Banker Real Estate Corp.