Customers Trying to Beat The System

[Raccoon]

Here's an interesting predicimant I've encountered. Both Yesterday and Today I received calls to make an automotive key by code for a customer. One customer had the code to their vehicle keys and had genuinely lost their keys, while the other didn't have the code and it turns out they had locked their keys in their car and wanted a new key to simply regain entry.

Both keys were plain jane non-transpondered keys, paid 50c for the blanks. The problem is, how do I charge for this?

As I see it, I'm charging X for a lockout re-entry ($45.00). The time and effort involved for me personally is nominal-- I'm charging the customer for my 24 hour emergency availability. But when a customer wants to buy a tangable item like a key, it's becoming tricky. Do I charge them $10 to cut them a key, and an additional trip fee? That would still only come to $40 for me, undercutting my lockout rate by $5 and the customer gets a fresh key on top of it. What if the customer asks if they can pick up the key? How do I still charge them a service fee?

This same scenerio applies to homes. I'll charge $15/hr (2 hr minimum) service fee, and $7.50 per cylinder for rekeying (w/ key present) or $10 per cylinder for rekeying or decoding (no key present). Again, this comes to be $40 if the customer locks their keys in the house and sneakily asks to have new keys made.

I know a lot of locksmiths will charge much more for lockout calls, increasing the margin from $5 to possibly $50. So how do these locksmiths handle a customer who asks "for a new key" instead of "can you let me in"?

[dosman]

I'm just a layman so I know you're not looking for my opinion but I felt compelled to share it anyway . If a locksmith told me it would be $45 to cut a normal key by code just because my keys where locked in my car I'd tell them to get lost and call the next number in the phone book. However if I'm standing outside my car and require that the key be delivered, then yes I would expect some type of additional fee and might possibly pay the full lockout price. Or I would have a friend drive me and get my key cut by code for $10 .

[Shrub]

My solution is to not offer key cutting on a cal out basis,

I will only go out to cut keys if there is a minimum of 6 keys to be cut and its local, if its out of the area double that,

With the profit margin in keys i look at it in the way that 6 or 10 keys is a good wage i wouldnt have normally had,


I have on occasion allowed someone to come to me and ive cut them a key there and then and charged them a normal key cutter price,


If its a call out its a call out, if i get rung and asked for a car key that isnt transponder to be cut to code and taken to them so that the car can be opened i will say that it would be cheaper for me to come and open the car and retrieve the keys as if i turn up for a car opening its a callout charge only, if i turn up with a key its a callout plus key price at key cutting prices,

I look at things in the way that is it ecconomically worth it first of all, if my fuel costs are paid for then anything on top of that is a bonus on what i might have been doing otherwise ie not getting anything, so even if its a few quid (dollars) its somthing ill walk away with in my pocket that day that i wouldnt have normally had,

Decide how you wantto play it and then make sure your costs are covered, if they arent its not economical to do and you simply have to turn them down, if they want a key tell them to go to a local key cutter as you dont go out to cut a key,


When a customer rings up for you to go and cut a key its just pure laziness on the customers side as if its slightly over the price of the local hardware store they will go there anyway,

[RodVT]

Racoon, if I remember correctly, you don't have a store front so my answers are based on that assumption, excuse me if I am wrong on that.

As a rule of thumb, I think your lockout price should also be your minimum call out price, for anything you do that included your transporting yourself there. Gas, insurance, advertising, etc. all these overhead items reasonably go into a minimum invoice amount. The lockouts themselves usually take so little time that it's not practical to base your charges on that short block of time.

$15 per hour for a self employed person seems unrealistically low to me, considering overhead and taxes. It is reasonable to plan for 30% of income to be eaten by federal income and self employment taxes.

Reasonable markup on items costing under a buck, especially if you aren't selling hundreds of them a day, can be somewhere between 3 and 5 times cost.

If someone comes to your store and asks you to cut a key, you can reasonably charge them for your equipment and expertise. The five minutes you spend is very reasonably translated into $50 or $100 per hour (but still might be only $5). If someone calls you, you spend phone time and then face time, and tech time, that's a lot more effort on your part. If you then deliver the key, in your service vehicle?..., sure seems like it's worth a "lockout" to me.

I don't make keys (yet) so I don't have firsthand experience with your full question, beyond my own lockout work (primarily auto, for 6 years now). But these are just my personal basic business thoughts, and practices.

Rod

[2octops]

Our service call is $75.

If we have to fit a key to a car, it's $125 if the car had one key that fit everything and $60 more if they require a second key to fit doors or whatever else. They get one key.

If they have the key code, we will cut a key by code for $35 plus the $75 service call ($110 total). They get one key.

If they are only locked out of their car, it's service call ($75) and that's all.

To rekey a house, it's service call ($75) and $20 per cylinder if they have a working key and $35 per cylinder if they do not have a working key. This does not include any keys.

Keys are $2.50 each and I don't care if you want 1 or 1,000. Actually, I would probably charge more if I had to cut 1,000 keys in one sitting

[ponsaloti]

Before I leave my shop, whether its an emergency call-out or to change /fresh fit a lock, I first quote my hourly rates and tell them if I`m in the house/car within 5mins, its still my quoted first hours price. Depending on the customers attitude, age , financial cercumstance and time I have spent to complete the job, I regulary knock a bit off of the quoted price I fist gave them ( if its a quicky). Also if they ask for another key, I will genarally cut one for no extra charge ( above rules apply).
I intend on trading in the same town and from the same premises for many years, I get repeat business and i believe most people find it hard to trust locksmiths. If you let customers think that there getting something for nothing , they will tell there friends and come back.

[ArrogantLockie]

I received calls to make an automotive key by code for a customer. . . didn't have the code and it turns out they had locked their keys in their car and wanted a new key to simply regain entry.

So that's a lockout call, what's the problem? It's up to you to communicate properly with your caller, ascertain their problem or requirement and give your knowledgeable recommendation and pricing before setting off.

lockout re-entry ($45.00). . . I'm charging the customer for my 24 hour emergency availability.

plus the knowledge and skills to overcome any lock problem also the equipment and ongoing training and multiple overheads of running a business. , looks like you're way too cheap!

What if the customer asks if they can pick up the key? How do I still charge them a service fee?

Why? If they have the code and all you do is cut a key to code what is the issue? Are you that desperate for every service fee? If you go there then charge your regular trip fee/service charge. If they come to you at YOUR convenience they pay for a cut key only.
If they have no code you charge for the specialist vehicle entry (with no damage and under your indemnity etc) and also for generating a key, either by code or to lock - of course this should be more.
If a customer walks into a shop for several keys to pattern and some to code they don't pay a service charge, just a little more for code cutting.

This same scenerio applies to homes. I'll charge $15/hr (2 hr minimum) service fee, and $7.50 per cylinder for rekeying (w/ key present) or $10 per cylinder for rekeying or decoding (no key present).

I charge more for one rekey than you do for one hour! That's on top of a service charge.

Have you ever done a proper costing of your business? Do you live with your Mom?

I agree with octops and Rod.

[toomush2drink]

Charge what you charge and thats it If you start knocking money off they just think your playing at it and all you attract long term is other customers who want something cheaper too. It doesnt matter if they have the code you are still going to them. I dont get a discount at the hairdressers because i know what style of haircut i want.If they have the code why should they get it cheaper ?

If you charge too little you lose the respect of the customer as they think you are desperate or worse still not that busy. Who would you want to do work on your house, the tradesman who is busy or the one who isnt ? The one who is busy is busy for a reason, hes good at his job.

If you gain entry quickly why do a job cheaper ? It doesnt make sense, you get good at your job so it takes you less time so you take money off ? If ive taken the time to get good at my job they should pay more for my services not less. Since ive put my prices up ive had better quality customers and also less aggro over how much it costs. Think of it this way, which car do you want the cheap one or the dearer one ? its all about human psychology . If they are worrying about the price then you havent got across why your such good value and how good your service is.Thats why certain car manufacturers can charge more, they have got across how good their cars are so therefore they are worth the extra you pay.

Its basic marketing and something worth looking into.

[zeke79]

Have you ever done a proper costing of your business? Do you live with your Mom?

I agree with octops and Rod.

Stop trolling the topic. He was simply asking for an opinion. Just because you charge what you charge doesnt mean it is economically viable in all areas of the United States. Keep that in mind.

[Raccoon]

Thanks for all the input. I know it seems all straight forward on paper (er, post) and you guys make a lot of sense. But then speaking with locksmiths in my state, they all have similar difficulties.

I live on my own, in the broke desert state of New Mexico (not as smelly as Old Mexico). My rates are actually quite comparable to other locksmiths through-out the state, and sadly, $10 higher than the Tow-N-Blow down the street who is taking all my business from the Sheriffs' calls. I guess one of my customers was referred to me by the Sheriff's police and complained to them that I charged $45. :S

[Raccoon]

Incidentally, it seems that most locksmiths also charge the same hourly rate as I do. And will charge differently for commercial contract jobs. I do the same and it seems to keep things going. I get away with $30/hr doing construction jobs, and $15/hr with residential and small local business. I tried $30/hr with average customers and got lots of hang-ups.

[RodVT]

If you are having customer resistance at the very reasonable rate of $30/hr., try going to a flat rate instead. You may look better to the customer if they know how much the job is going to cost up front, versus who knows how much for the hourly guys. Also, $15 per hour is so low, you might want to see if you can increase your mark-up on parts, keys, etc. and increase your profitability there.

To me it's almost as if the $15/hr. rate is (should be) used as a loss leader to get you in the door and then SELL, SELL, SELL! This sounds slimey, but in this day and age customers deserve to get what they ask for. If you want the cheapest guy in town to do your work, you have to expect that he is going to make it up somewhere.

On the other hand, you can add a sales pitch to your telephone responses, "Yes, I charge more per hour, but I won't sell you parts you don't need, and my keys and parts are reasonably priced. So In the end, I doubt you will pay more with me." Or something like that.

The other avenue is the: Quality, Service, Price: Choose Two, argument. You are unlikely willing to compromise on the quality of your work, so that means if you give good service (get there fast) then they pay the long price. If they are willing to wait until it's convenient for you, then you can take a little less money because you can schedule more efficiently.

I know rural New Mexico runs on a pretty stark economy, but the idea that any independent trades person works for that low of a rate in this day and age is kind of shocking to me. I hope you can nudge the prices up in your area. You will be doing everyone a favor.

Rod

[raimundo]

As I read it, Coon got the legit call first, so then the customer happened to talk to a friend and said, hey this guy will cut a key and deliver it cheaper than a lockout call, so the next guy was all ready for him when he got there.