Concierge services may be unfamiliar to the average person on the street, but for the mass affluent and high net worths (and time poor) they are becoming a necessity.
In the future, he sees the world’s mass affluent population all using what his business offers to organise their lives in the most effective way possible.
Travel and tickets cheaper
“Why wouldn’t you if it gets your travel, tickets and dining organised better, cheaper, quicker and personalised to you,” Cheatle told Proactive Investors.
One of the skills of the hotel concierge traditionally was to get hotel visitors entrees into top restaurants, shows and so on.
This personal service element was one of the principles behind Ten when Cheatle set it up 20 years ago.
A table at the Ivy
A table at the Ivy, FA Cup final seats or an Adele concert, Ten can arrange it for you.
Impressively, the company claims a 98% success rate for the tickets or reservations its members want.
Indeed, Cheatle says one of the only times it failed was when it was asked to arrange an invite to the Oscars ceremony.
There was no problem though arranging entry to the after-event parties, he quips.
Aimed at high net worth individuals earning at least £100,000 a year, with subscription costs starting from £130 per month for a Classic membership, but Cheatle points out that most of its users don’t have to pay for it themselves.
Banks are customers
Banks keen to rejuvenate their wealth management and private banking arms following the credit crunch have spotted the need for something to differentiate themselves.
Concierge services - flights, travel, hotels, entertainment and so on - are an ideal loss leader to build brand affinity and attract customers particularly with a specialist company such as Ten doing all of the leg work.
“The majority of our members don’t have to pay for the service,” said Cheatle.
“Someone else chooses to provide it for them to build the total brand experience.”
Upmarket bank Coutts, for example, is one of Ten’s main customers.
Using corporate buyers also minimises the cost of acquiring users, which is one of the main expenses in running a subscription service.
Costs savings go back to the customer
Without customer acquisition costs, Ten can pass any savings straight back to its members and that is not only a huge benefit to them but a major advantage over rivals.
Online hotel rooms companies, for example, typically make 20% from customers who book a room with them, whereas Ten effectively charges what it is quoted.
Ten also deals directly with airlines and passes on the best prices through to its members, while concert tickets are sold at face value, regardless of how popular a gig.
There is competition, American Express has its black card, Mastercard World Elite and other cards providers all offer discounts on hotels, flights, restaurants and other services at the premium end.
Cheatle, though, bangs the service drum as a differentiator for Ten.
Out of a staff of 650 most (465) are still employed in dealing with requests from members with 100 devoted to the firm’s cutting-edge technology platform.
Market forecast to grow substantially
The market for concierge services among the wealthy is also forecast to grow substantially.
Requests to Ten (from UK financial services companies) have risen from 1,200 in 2004 to more than 225,000 in 2017 and nowadays as many people use the service at home as they do travelling.
The UK, which is currently Ten’s largest and most developed market, only accounts for 6% of the world’s high net worth individuals.
Expansion recently has taken in Asia and the US and as the company gets larger, Cheatle sees a virtuous circle.
“As we get bigger it gets easier, the proposition gets better, overheads are spread and we benefit from network effects.”
“We are selling [to suppliers] a volume of premium leisure business and that is very valuable.”
Hey big spender
A Ten member spends 80% more on average than an ordinary restaurant customer, he adds. It is stats like that and its strong relationships with banks that give it its edge.
“If you phone [a restaurant] it’s booked, if we phone it’s available.”
Ten currently has 1.6mln registered members with 120,000 active users, but activity has really taken off since the introduction of a digital platform in 2015.
Sales over the past three years have grown by 29% compound, a figure Cheatle is confident can be maintained.
Spending has matched the growth, with losses of £2.2mln in the year to August similar to the previous two years, but Ten is firmly in growth mode, principally focused on a brand and market share building phase.
An in-house developed request platform has meant many simple transactional requests are now automated.
Online usage has soared
Online usage has soared as a result with the number of digital requests increasing to 30,180 from 8,333 since 2015.
Maintaining a state–of–the–art tech offering is not cheap, though, and much of the £18mln Ten raised when it listed is earmarked for IT, but this is essential expenditure says Cheatle.
“We want users to have the best experience across flights, hotels, car hire, music, theatre, sports, bespoke events and so on.”
“We have to be a brilliant hybrid of both service and tech.”
At 140p, Ten is valued at £104.8mln.