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Unlocking Potential
Reinvention Key to Lock America's Strength as Supplier

The LAI Group Team - Lock America Last May, as he walked the National Hardware Show, Frank Minnella, CEO and cofounder of Lock America, realized "in another six months, we'll be a new company." He also could have made that discovery at a recent gun show or a loss prevention conference. Lock America's roots began in 1981 as a lock supplier to the vending industry, a small company focused on delivering solutions to security problems for their customers. Security is their foundation, and that foundation impacts all of their decisions. Frank entered the security lock business as market development manager for Abloy Security Locks in the mid 1970s just when the vending and amusement business was ready to boom with the first blockbuster videogame, PacMan. Pong and some primitive videogames had made a splash, but once Pac-Man hit, as many as 20,000 units a month were being placed all over North America, and they all needed locks. Frank saw the opportunity to provide maximum security for those machines after he saw what the ordinary level of security was. "You couldn't use shipper locks," Frank said. "They were weak and unreliable, and there was no key control. These amusement machines were making a lot of money, and every operator wanted to protect his coin box. I told them that shipper locks were all keyed the same. They realized that they had to replace these locks with high security locks. Our business took off, and vending and amusement began to replace laundry as our major market." And that's how Lock America's marketing philosophy was born: look at a market, find a need and meet it.Frank noted, "I thought, if I can do this well in a corporation, why not go out on my own?"

The LAI Group Team - Lock America In 1981, that's what Frank did. He set up an independent security business with Steve Shiao, currently LockAmerica's president, and became the exclusive North American distribution and assembly facility for a Taiwan-based security products manufacturer. Working with Steve, who warehoused and assembled the product in his garage, Frank would go out each day and sell locks while Steve would go to his day job as a "plant pathologist." Each night they would assemble locks from 6 to 10 p.m. in Steve's garage. Eventually, they rented a small warehouse and became a real business with Steve in the office and Frank out on the road. From that point, what would become Lock America took off. In those days, Frank would go out on five-week road trips, recognizing the critical importance of actually visiting customers and prospects to learn the security problems of operators and come up with solutions. Nowadays, the road trip can get pretty expensive,but Lock America's sales reps still hit the road between tradeshows to maintain close touch with their market. "We still need to see first hand what is going on out there and if we are going to design products that will improve the level of security our products provide," Frank affirmed. "Even with all the shows, and we make most of them, I don't want to stop visiting customers. I'm old school. To me, selling in the security business is more like consulting, and that type of relationship still needs to be person to person." In 1984, Frank and Steve bought their first computer, becoming one of the first companies of their size to recognize the value of customer data. The system was so well designed that much of it is still the basis for Lock America's present customer service program. "All of our customers have registered keys, and that is what separates us from other companies in the lock business," Frank noted. "We never forget about a customer. We listen to them and give them what they need. That's the philosophy we started with, and that's the only one we'll ever have." What Frank never forgot was the value of learning from the road. "At Abloy, I learned how to prospect a territory, and in the early years I'd hit the road in a car and make 25 calls a day," he recalled. "No cell phone, no Blackberry, no MapQuest, not even a lead list. I'd get to a city, buy a map, get a hotel room and map out every company that I thought could use high security locks. For the next five days, I would try to see everyone on that list. We still supply locks to a lot of those original customers." As the vending security business grew, Frank noticed more businesses that couldbenefit from a well-managed key control system. When you're on the road, there's always something new and profitable to see. Customer service further drove Lock America's market reach.

The LAI Group Team - Lock America Frank added: "We listen to our customers. It's their feedback that helps us to redesign and refine our products. It is important that our customer service people stay with us. It takes a long time for them to learn how to counsel a customer who has a security problem. Our people are not taught to take orders. They are taught how to solve the many different security problems that our clients will run into over the years." Moreover, many employees have been with Lock America for 10 years or more in manufacturing and customer service areas. "We try to be fair to our employees and to our customers by giving them the tools they need to do their jobs," Frank declared. Treating customers and employees with respect and courtesy is a key to Lock America's success, and so is knowing the customer. Supplying locks to these various types of clients has taught Lock America that every client is unique. That knowledge is built on a database of over 58,000 accounts, not simply of names but of sales history and key code registration. Key control is essential for a lock company that services the vending, coin-op, gaming and newspaper industries in addition to self-storage. Key control based on that database gives Lock America's customer service reps the tools they need to service customers. "I didn't get into this business to make money," Frank said. "I got into this business to build a business. We built Lock America one customer at a time, and every one of them is important to us. Sometimes we don't hear from them for a few years, but when we do, there they are, right in the database. We never forget about a customer. We listen to them and give them what they need. That's the philosophy we started with, and that's the only one we'll ever have." Change or die. Darwin probably didn't say that, but that's the message of natural selection, and all would agree that the business landscape evolves a lot like a jungle. The way to survive as a business is to make the right changes: find new markets for products, and more importantly, always be looking for new applications that you can grow for products.

Meeting the Challenge of a Tough Marketplace

The LAI Group Team - Lock America As many businesses have seen dramatic drops in customer orders and profits, Lock America, supplier to the coin-op, gaming, self-storage and vending industries, has taken a number of steps to cope with tough economic times:
  • Diversify and think outside of the box: One advantage a small company has is flexibility. Lock America has successfully positioned its hand-assembled security products for new markets that have an increased need for lock security.
  • Accelerate the timeline: Without expanding its advertising and marketing budget, Lock America has shifted marketing dollars from its traditional markets to maximize its new visibility in these growing markets.
  • Reduce overhead: Lock America has cut hours for some of its administrative staff and closed one regional office, allowing it to invest money saved into the new markets campaign.
  • Take advantage of what you have: The company accelerated sales of its slow moving inventory by reducing prices while developing new higher margin products for new and existing markets.
As CEO Frank Minnella says, "You have to take a short and long look. We put our marketing efforts and money where we can find the best return now. We'll keep looking for new markets and developing new products, particularly products that meet high security needs of our current and new customers while continuing to be ready to respond when our old markets begin to turn around."

Reprinted from RePlay, July 2010.
Vendors Purchasing Council, Inc. AAMA - American Amusement Machine Association AMOA - Amusement and Music Operators Association NAMA - National Automatic Mechandising Association NAID Vendor Self Storage Association Member Self Service - A Kiosk Association