For the Locksmith Ledger webcast, Upgrading to Electronic Access Control (EAC), our panel of experts discuss strategies to convert entryways to the latest EAC systems, looking at how the industry has moved from mechanical locks to stand-alone systems with an audit trail, to more sophisticated systems that are connected to other systems within a building, interfacing and integrating with fire safety/life safety systems, video surveillance systems (CCTV), and other communications systems, for example.
The roundtable discussion featured Wayne Winton, Owner, Tri County Locksmith Service, who holds the Certified Registered Locksmith (CRL) and ACE Instructor (ACI) credentials from the Associated Locksmiths of America (ALOA), and is currently serving as the ALOA Southwest Board Director; Daniel Hardwick, Vice President, AKL Solutions, a second-generation locksmith, who took over the family business in 2018 and has been growing it ever since; Peter Lowenstein, Vice President, Sales, NAPCO Access, who brings extensive experience from distribution and working with competitive manufacturers; and Roland Smith, Industry Solutions Leader – Hospitality, Salto, an industry veteran and electronic access control expert who is passionate about creating more effective, efficient and secure access control solutions for hotels, resorts, theme parks and venues.
The Golden Age of Security
“This is the Golden Age for security, not the Platinum Age yet but where we're headed there,” says Winton, looking at the current state of EAC adoption among locksmiths. “The way that AI and the camera systems and facial recognition and biometrics integrates with electronic access control systems … I see it happening everywhere, in new construction projects and with retrofits or upgrades from legacy systems.”
He continues, “I've got contractors that call me, and they need me to install the mechanical portions on projects like the strikes, for example. They know how to run the wire, but we can still get a piece of that business because the contractors don't know how to set these systems up, align everything properly so it all works, the mechanical and the electronics. So, the locksmith really has a huge opportunity there.”
On the retrofit side of the business, Winton is also getting a lot of work with schools and businesses of all sizes. “Every store wants to go electronic access because they want to be able to control that business from their phone or they want to monitor it from their phone. So, we're doing those retrofits, new builds and then there's the residential market where things are picking up as well”
Hardwick is also seeing a lot of activity for electronic access control projects, especially on the retrofit side.
“While we don't see a whole lot of new construction, we do mostly retrofits for a lot of our client base, and we see a lot of growth in that area,” says Hardwick. “We're seeing a lot of push in the healthcare industry and assisted living – anything healthcare related, they are really pushing card access. Any kind of smart technology that's letting them see who's in, who's out, that helps them with creating schedules and events and stuff like that. The Bluetooth credentials we are seeing a huge push for right now, NFC credentials, which is coming up a lot in our area as well.”
Lowenstein is also seeing growth, noting statistics that align with the Locksmith Ledger State of the Industry numbers that show that 84.2% of locksmiths say that electronics will either be a major driver in their product portfolio or complement their existing product portfolio.
“A recent study that I purchased showed that the trend right now is 64% of the access control industry, as a general statement, is going to wireless technology,” he points out. “And the business out there that is going that direction, interestingly, if you take that wireless category, you break it down to offline and online locks, offline being the locks that are programmed at the locks versus online locks which are connected, still the vast majority of those locks are offline.”
As Lowenstein explains there’s the opportunity for all of those doors and locks that are offline to elevate themselves to a fully online system. “And the good news is at the end of the day, all these electronic locks still are the positive latching devices that hold the door shut, are allowed to open and so forth. Ultimately, this is absolutely the trend, and this is what we've seen now on the manufacturing side is it's about a 70-30 [ratio of] retrofit to new construction projects.”
Smith agrees and sees a lot of work on the retrofit market on both the commercial and residential side of the business.
“When it comes to residential, I think it outperforms unit to unit more than the rest of them, but overall, there’s huge retrofit market,” he says. “The retrofit market continues to grow and as was mentioned, schools need safety, so securing the perimeter at minimum and then of course there are a lot of mandates in different cities as well to be able to create an alert throughout the school, and to do a lock down from inside of the classroom and then remotely for certain doors and locks.”
He continues, “Now one of the areas that I really see growth as well is with hospitality. It's a year over year trend to continue growing as well, so we're seeing that by the end of 2026, we'll have 200,000 new guest rooms in the U.S. alone. So, every space and every place will continue to have more electronic locks. If you have a smart home, you want to have a smart building everywhere you go. Everybody's accustomed to having technology at the in the palm of their hands now, so it is the expectation.”
The Art of Winning EAC Jobs
In terms of additional revenue that can be made, Winton points out that it just makes good business sense to build out your EAC portfolio.
“Our normal locksmith rate is about $145 an hour and our electronic access control rate is about $185 an hour, so we're already adding about $40 per hour just for that extra expertise we provide,” says Winton, adding that there is additional mark-up on the types of EAC systems and products compared to just mechanical locks as well. “You can make way more money understanding these electronic access control, so there are tons of opportunities here.”
Hardwick adds, “Like Wayne mentions, we add a lot of value in our level of expertise just because we know the hardware, we know the codes and compliances that all the businesses need to be aware of just from being a locksmith.”
In terms of additional revenue that can be made from EAC work, Hardwick says, “We aim for at least a 35% margin on anything we touch, and that's really if we're trying to match a customer's budget and really trying to stick within their budget, we'll shoot for something somewhere around that 35% at the bare minimum. But as far as our parts and our hardware and stuff like that, we're doubling our prices.”
In addition to working closely with manufacturers and their reps to find new business, both Winton and Hardwick agree that it is all about building that trust with your customers.
“It is really about just building those relationships,” says Hardwick. “And many times it is just educating those customers on what we can do for them. When we first started to get into the access control world, other than just doing offline locks or standard keypads on a door, we just had to go down and talk to each one of the customers and show them what we can do technology wise. We started out offering discounted rates, just to kind of help work within their budgets and let us learn a little bit and it's worked out well for us. We now have more than 300 customers on cloud access control, and they all pay us very well. And they are repeat customers, so they are always adding a door or two to the system.”
Recurring Revenue Options
In terms of recurring revenue, Hardwick points out that those 300 customers on cloud access control “all pay us a monthly fee for their cloud access license, their software license, for example. But on top of that, we also add preventative maintenance where we come out every year and we just check everything out. We touch the door, we touch the handle, we touch the strike, the access control panel, the reader, the software, and we do any adjustments that are needed or add any additional services.”
As locksmiths begin to add access control, they can do so at a lower cost to their existing customers to start out, which gets their foot in the door with customers. “And we were going to make it up on the back end too with the recurring charges,” Hardwick says. “And we also offer a little added value with the preventative maintenance, and I think our customers really appreciate that and they're glad to pay ii to make sure everything works and continues to work.”
Hardwick says he has seen it too often where a customer has a card access system or camera system where an installer came out, installed a system and then it just hasn't worked in years “because no one’s offered any kind of tech support or any kind of preventive maintenance or anything like that, so it is such an opportunity for locksmiths to step in.”
Winton adds that it is important to think of the monthly subscription fees as a product itself. “If you mark up the hardware, you should be marking up your subscription fees as well,” says Winton. “That's part of it and that's how you really cement yourself in this industry.”
Another way Winton is able to turn smaller jobs into potentially larger ones is by looking beyond just the doors to all the possible pain points that a particular customer might have based on their current set-up and needs.
“Always look at the door as a whole opening,” he points out. “I've got several hotels where I'm a fire door inspector, so that means that we can inspect that door, and we can make sure that we're applying these expensive systems to a healthy opening. And that is one of the most important pieces that I hope people take home – if you put a $10,000 electronic access control system on a door that is not healthy and a frame that is not healthy, it's never going to work right and they're not going to be happy with it”
He continues, “So you need to address the entire opening the door, the hinges, the frame, how it's secured, the door closer, hinges, door seals – every aspect of it is an opportunity to make money and that's where you can really bring those profits back, especially with people being able to look up products and prices online these days and cut into our margins that way.”
Winton adds that shop owners need to figure out what they need to do to sustain and grow a successful business, not just survive.
“You don’t want to barely scrape by and what I have found is you can either race to the bottom or you can race to the top, and I’ve always chosen to race to the top,” he asserts. “I work in a backwards linear motion, so I figure out what do I need to get out of this job to make it successful for me. I am here to run a business. I'm here to have capital in the bank when times are slow to get through times like COVID and I'm here to stay for a long time. That's how we've been in business for more than 12 years and that's how we're going to continue to do business.”
Paul Ragusa | Senior Editor
Paul Ragusa is senior editor for Locksmith Ledger. He has worked as an editor in the security industry for nearly 10 years. He can be reached at [email protected].
