Service Contracts Bring Recurring Revenue to the Commercial Locksmith

Jan. 1, 2008

In the November 2007 Locksmith Ledger, Gale Johnson wrote an editorial that addressed service contracts as a source of recurring revenue, an issue that I feel has been overlooked by many commercial locksmiths for a long time now. Standalone access control products offer commercial locksmiths an opportunity to offer these contracts and move themselves forward in our industry if they are willing to accept the challenge they represent.

Manufacturers are introducing these products to the marketplace in ever increasing numbers and have had great success creating demand with end users that have an in-house capability to install and service these products.

The challenge has been when it comes to an end user that may have a large property or portfolio of properties but no one on staff who can take ownership of the product and its necessary software. Property management firms are among the most challenging end users for which to provide these kinds of solutions. When presented with the features and benefits of a standalone hardware solution and the software that manages it, their reaction is usually positive, but then the next question is “Who provides and installs it?” This is where the manufacturer needs a network of service providers (commercial locksmiths) that are up to the job of installing the hardware and the software that runs it as well as maintaining the system after the initial installation is completed. And, to be honest, few locksmiths are ready to accept the challenge.

This needs to change. The business that accepts this reality and acquires the skills necessary to support these products will be the one that gets the leads from manufacturers' representatives when they are asked “Who can do this work?”

The first step is to research which products offer the most features and will be a good fit for the conditions in your particular market. The software capabilities will also need to be a part of the decision and the easier and more intuitive it is, the better!

Schlage Lock offers a wide range of standalone products and software that will meet the needs of most any application you may come across. Since hardware and software always have varying levels of sophistication and capability, you need to ask your customer the right questions, such as:

• What type of credential do they want to use, cards, pin codes, i -Buttons or a combination of several?

• Do they need time zones to be able to control people's access rights?

• Do they want the lock to be able to automatically unlock and later lock back up?

• Do they need to schedule special circumstances for holidays? Or do they simply want a few codes for everybody to use?

The answers to these questions will help determine the appropriate hardware and software choice. Schlage Lock offers a wide range of stand-alone access control products from the King Cobra and King Cobra 2 to the CM and CL line of locks. Schlage also offers two software packages: Security Management System (SMS) Express and SNAP, either of which is a good choice if the end user's needs are clearly understood, and both offer an easy-to-understand interface that can be quickly learned.

This brings us to the important issue of recurring revenue for the locksmith that sells these systems. The fear that many in the industry have is that once they sell a standalone lock and the software that runs it, they lose the opportunity for further business from that end user.

This is where a service contract comes in to play. Any software, no matter how simple, requires periodic updates (patches). There are also times when the expertise of a factory trained technician is needed to resolve issues between the programming device for the locks and the host computer. This is not a warranty issue; this is just a fact of life when it comes to computers and the associated software and hardware that run standalone locks. The lock hardware itself, while reliable, is admittedly more complex than a mechanical lock and at the very least requires new batteries every so often.

A service contract might be something as simple as an annual visit to the site to replace the batteries, update the software with the latest revisions and check that the door operates safely and correctly. It could also include a provision for emergency service when the need arises or for additional training should the end user have a change in personnel. The opportunity for addition revenue is enhanced by the fact that it is inevitable that during the course of the year the door will be subject to conditions or outright abuse that will require additional work to be performed, work that the locksmith company that already has a relationship with the end user is almost guaranteed to get. Included with this article is a sample service contract.

The use of ever more sophisticated products is going to continue and will most certainly increase in the coming years. Don't let fear of the unknown or apathy prevent your company from benefiting from this trend. Reach out to the manufacturers for training and make your company available as a resource to end users who want these products and need these services. Become the expert in your area and you will have more business than you know what to do with!