We continue to explore the IoT opportunity for locksmiths with interviews with Tony Hokanson, President of Bloomington Security Solutions in Bloomington, Minnesota; Chad Lingafelt, Managing Partner at Loc-Doc Security in Charlotte, North Carolina; and Mark Kenniston, General Manager of Beishir Lock & Security, St. Louis, Missouri.
We asked for their opinion regarding revenue and margin growth opportunity for both IoT and Recurring Monthly Revenue (RMR). Lingafelt said “RMR is the hot topic. We’re finding multiple ways to provide a higher quality of service to our customers by offering web applications that are constantly updating and adding new features without the need to processes updates. It also empowers our team and our customers to solve problems without rolling a truck. This is just one of the examples of RMR benefits. Service agreements are a whole other topic.” Hokanson echoed this view, “Absolutely. It seems like most locksmiths are not aware of the value this brings. We’re trying to make our solutions service oriented and holistic.”
But Hokanson’s major point about RMR was less about revenue than being able do more for the customer. He said “It seems like the culture of locksmiths in general is that they really care more about finding the right solutions for their customers. They have an interest in helping the customer, so they’re not out there looking for more ways to build revenue. They go into the profession because it’s interesting and they like it. So as a result, most would care about RMR when they see it as a key part of the solution and enabling more service they can provide, rather than about the revenue. For example, enabling the ability to remotely support the customer.” Kenniston, regarding revenue and margin growth opportunity, replied “Certainly. Every year that portion of our business is growing. The lock side of the business has stayed very stable, but there’s not a lot of direct growth there. However, the electronic side is growing every year. The locksmith area will always be a valuable piece. People who strictly focus on the mechanical side should be careful because more of these areas are moving to electronic. So, I would expect the revenue for the purely mechanical side to be declining over time. Openings that used to be strictly mechanical are increasingly starting to be replaced with electronic components.”
On RMR, Kenniston commented “We see RMR from a few different standpoints. We’ve seen an increase in our alarm monitoring but now also provide integration with thermostats, door locks, lights, etc. It’s reduced the amount of conversation needed to sell those services. By providing all of this, they’re not just paying for something they hope not to use (alarm monitoring), they now are paying for something they use every day – the light switches, thermostats, etc.”
When asked if they saw IoT as an opportunity to support emerging devices that perhaps would have been the domain of other markets, such as server rack locks in the IT space, we were told “Yes, that’s one thing we’re always trying to do. Being one contact point for many of the devices is a convenience for the customer as well. We’re selling a suite of products. Serving the mechanical side means we’re on site anyway, so we can save the customer time and money by helping with other areas. It provides efficiency both for us as the vendor and for the customer, and again locksmiths are best positioned for this. Locks are used every day, so they fail more frequently and need more visits than other devices. Customers use the lock every day, so at some point it’s going to break. As a result, we have more opportunity.” Another reply was “Certainly. Even in our industry there’s a bit of a barrier to entry as those kinds of things have been managed by network service companies. But there is an advantage to having a single system in the same user interface you use to control everything else. You don’t want to manage a different system of access for your server locks.”
Next time: The Opportunity for Locksmiths continues