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Service contract pricing calculator for alarm dealers
To price a security service contract, add up what one customer costs you in a year — tech hours at your loaded labor rate, a parts reserve, and office time — then add your markup, and that total is the plan price. Divide by twelve for the monthly number, and check it against nearby dealers only after your own costs have set the floor.
It opens on the worked example from our post on pricing service contracts — $300 of cost becomes a $420 plan, or $35 a month. Those are round numbers to show the shape of it, not market rates. Put your own in.
Your numbers
1What a tech hour costs you
2Hours one customer uses in a year
Total 4 hours a year
3Everything else, per customer per year
What to charge
Updates as you type. Nothing is sent anywhere.
Per year
$420
Per month
$35
What if the phone solved the easy calls?
Some share of your service calls never needed a truck. Put in your own estimate and watch the cost side move.
Only the service-call hours move here. Drive time is left alone, so this is the low end of what an easy call really costs you.
That is the case for answering the easy calls without sending anybody. Our AI 24/7 Support Line does exactly that — she picks up day or night, walks the customer through it, and books the truck only when it is real hardware. From $297 a month.
Call and try it: (737) 339-5541. Tell her your keypad is beeping.
See how the support line worksThis is one of the 12 tools Inside Edge members get, along with a monthly marketing review. See what's inside
How to price a security service contract
- 1
Work out your loaded labor cost per hour
Take the tech's wage and add payroll burden, the truck and fuel, insurance, phone and tools. That total, not the wage, is what an hour on a customer's system costs you.
- 2
Count the hours one customer uses in a year
Add the scheduled maintenance visits, the service calls they actually place, and the drive time to get there.
- 3
Add a parts reserve and office time
Set aside what you expect to replace in a year, backup batteries first, and put a dollar figure on scheduling, billing and answering the phone.
- 4
Add your markup
Labor plus parts plus office time is your cost per customer per year. Add the markup you need on top, and that total is the plan price.
- 5
Divide by twelve and check it
The yearly price divided by twelve is the monthly plan price. Then compare it with nearby dealers. If your number lands well above theirs, the gap is usually in hours, so look at how many of those trips could have been solved on the phone.
The contract checklist
A customer can’t judge a price until they know what they’re buying. Put these in writing before you quote a number.
What to put in the agreement
Most fights over a service agreement start with a vague scope, not a high number. Write down five things.
- Response time. How fast you answer, and how fast a tech arrives. “Next business day” and “same day when the system won’t arm” are two different promises with two different costs.
- Remote support. Whether remote fixes are included, and during what hours.
- Scheduled maintenance. How many visits a year, and what gets checked on each one: sensors, sirens, backup battery, communicator signal, cameras.
- Parts and labor. Which parts are covered, which are not, and whether labor is included on covered repairs.
- Exclusions. Damage from storms, pets, remodeling, or the customer’s own changes. Spelling these out up front saves an argument later.
Covered
- Failed sensors and door contacts
- Keypads and sirens
- Backup batteries on schedule
- Communicator swaps
- Programming changes
- Remote support
Not covered
- Damage from weather, power surges, pets, or construction
- Adding new devices
- Moving equipment during a remodel
- Equipment another company installed, unless you inspected it and accepted it onto the plan
Two clauses worth writing in on day one
- A yearly price review. Review your costs in the same month every year, and let the plan follow. Without the clause, every increase turns into a negotiation. Check your contract and your state’s rules for how much notice you owe.
- Separate line items for monitoring and service. Many dealers sell both as one monthly line. Keep the contract clear about which part is which, so a cancellation or a price change on one doesn’t confuse the other.
When they push back on the monthly number
Often it’s the words, not the number. Three changes help.
- Call it a service plan or a protection plan. Never a payment, never a fee.
- Show what’s inside before the price: response time, visits per year, remote help, covered parts. Then the number.
- Put it on the bill they already pay. Most monitored customers already pay you every month, so service is one more line, not one more bill.
Commercial fire alarm work has a floor under it. NFPA 72, the national fire alarm code, sets inspection and testing intervals, and your local fire authority enforces them. Price the required visits first, then build the service plan on top of them.
Read the full post this came fromQuestions dealers ask
- Should I price a service plan by the number of devices?
- For homes, one plan with a device limit is simpler to sell. For commercial accounts, pricing by device count or by site makes more sense, because a building with hundreds of devices and a small shop with a dozen are not the same job.
- Can I include monitoring in the service plan?
- Yes. Many dealers sell monitoring and service together as one monthly line. Keep the contract clear about which part is monitoring and which part is service, so a cancellation or a price change on one doesn’t confuse the other.
- What if a competitor charges less for service?
- Ask what their plan includes. A cheaper plan with no response time and no parts coverage isn’t the same product. Put your scope next to theirs and let the customer compare line by line.
- Do I need a lawyer to write the contract?
- Have one review it. Auto-renewal, cancellation, and notice rules vary by state, and a template borrowed from another state can miss the rules in yours.
A good service plan keeps the customers you already have.
Getting new ones is the other half of the job, and more buyers now ask Google and ChatGPT which alarm company to call. Many independent dealers never get named in those answers. See where your company stands.
While you are here: check whether your website is blocking ChatGPT. A lot of sites turn the AI readers away without the owner ever deciding to, and it takes about fifteen seconds to find out.