Hartford Business Journal

24 Hartford Business Journal • April 29, 2019 • www.HartfordBusiness.com EDITOR'S TAKE Is Hartford becoming a tech center? A nother week has passed and another new innovation center has been announced in downtown Hartford. Hartford HealthCare, Trinity College and the UConn School of Business re- cently unveiled plans to launch this fall a medical technology and digital health accelerator in Constitution Plaza, with hopes of attracting promising startups to the city, where experts will help them develop and implement their strategy and potentially stick around for future growth. If you're keeping score at home, this is at least the fourth startup incubator to launch in Hartford in just the last few years. There are also business accelera- tors for the advanced-manufacturing and insurance indus- tries as well as socially conscious startups. Meantime, MakerSpace CT recently opened its doors to would-be tinkerers and entrepreneurs, while Upward Hartford is launching its Upward Labs project, which aims to develop companies in the smart-building and aged-care technology industries. Of course, Infosys also opened its tech hub in Goodwin Square earlier this year, where it plans to hire 1,000 people for IT and other jobs. If this all seems like new and foreign territory for Hart- ford, you're right. It's been generations since the city has been considered a hub of innovation and entrepreneurship. The conservative nature of the insurance industry, which still dominates here, may have contributed to the risk-averse culture that has taken root in the city for many decades. Ironically, the insurance industry is now helping lead the push for Hartford to break from its reputation as a city steeped in declining or traditional industries. Travelers Cos., Cigna Corp. and The Hartford have each donated time and money to support the Hartford InsurTech Hub, which has attracted 20 or so insurance- technology startups from around the world to join its accelerator program. Some of those companies have even established a small presence here. So, what does this all mean for the Capital City? It's unclear what the long-term implications are. There has been lots of hype around the launch of each of these new tech centers with flashy press conferences featuring movers and shakers from the public and private sector — all championing the city as a place for innovation. The state has also invested in a number of these endeavors. Certainly, this is a positive start in the city's effort to reinvent itself and com- pete for technology companies and talent. But that's all it is right now — a start. The real challenge will be getting more startups that participate in these various incubators to actually grow jobs here. We may never land the next Apple or Amazon, but a dozen or so companies growing workforces of 20 or more em- ployees in the city can begin to move the needle. To do that, the city and state need to build a business climate fertile for startup growth. Significant challenges remain in that regard. For example, the city's ex- orbitant 74.29 mill rate serves as a major drag on economic growth, and must be made more competitive if Hartford wants to attract more private investment. The day when government subsidies or tax breaks are no longer needed to do business in Hartford will be a milestone. We are all familiar with the state's challenges by now, but it's not only the major issues like paid family medical leave or the minimum wage that impact businesses. There are also nuisance taxes like the capital base tax, which is a levy on a com- pany's net worth or capital holdings, something particularly annoying to bioscience startups that have raised a bunch of cash but aren't yet making any money. Connecticut has many of the attributes to build a vibrant, tech-savvy Capital City. In fact, Bloomberg recently ranked Connecticut as the nation's fourth most innovative economy, based on its presence of STEM workers, density of tech companies, and research and development capabilities. Hartford and the state also offer a lower-cost alternative to nearby tech cen- ters in Boston and New York City. But this is no time for Hartford to pat itself on the back for its recent developments. Infrastructure is now in place for tech growth, but we need to continue to build up the city as a place that is attractive for entrepreneurs and young talent. EXPERTS CORNER Tips for retaining your top customers By Roy Filkoff Y our largest customer just called to tell you they are changing vendors. Your price was too high, service no good, they no longer buy this prod- uct, whatever the reason, this is not the start of a good day. Now what? Well, the answer depends a lot on how well you have prepared for this possibility. Strong roots are vital to a tree in the face of a storm, but you can't grow new roots in time when the dark clouds are in the sky. Prepa- ration is the key to protecting your company from this type of phone call. The first rule of customer retention is to know your customer. Your business may have 10, or thou- sands of cus- tomers, so how do you focus? I recommend keeping close to the customers gen- erating 80 percent of your revenues, or at least the top 20 percent of your customers. If that is still too many, focus on your top 25 customers. Creating a key account file for each of these top customers is a great tool. Here are some things you should keep track of: Who are the customer's main contacts? Who is the main point of contact and what is their contact infor- mation? If this person is not the decision- maker, identify that person as well. Similarly, it is important to identify those people to whom the buyer and decision-maker report. I have had clients who deal with low-level people at large companies and when there is a problem, they are unable to reach higher-level decision-makers to discuss an issue. Finally, it is important to have more than one contact from your business that has met these key people. These are your top custom- ers and being prepared to handle personnel turnover is critical. Know your customer's business How does your customer use your product or service in their business? Is your product critical? What other options do they have as an alterna- tive to your product? What is hap- pening in your customer's world? Make note of the general trend in their industry, like whether or not it is growing or shrinking. Who are your customers' customers? How financially strong is your custom- er? Do you have a complete credit file? Knowledge is power and the more you understand your customer's business, the better prepared you will be to support them. Know your competitors Why was your company selected as the supplier to this customer? Were you the low-price supplier, or high service? Is your product unique? Do you know your main competitors and what the key selling points of their products are? Your competitors are speaking to your top customers, so always be prepared to defend your position. Have an action plan Outline your goals for the relation- ship and how you plan to reach them. Who will be visiting the customer and how often during the year? When will the president go out to meet these top customers to let them know how important they are to your business? If this customer doesn't provide a "supplier scorecard" think about cre- ating your own to present to them. Let them know what you have done for them this year and how you rate your service on some objective scale. For instance, were your deliv- eries 100 percent on? If so, rein- force this. Also, take the time to identify social ac- tivities that you may enjoy with your client. Take them out to dinner or a sporting event. Put this in the plan so it doesn't get lost in the shuffle. Top-performing companies will maintain a key customer file, which also includes profitability analy- sis on the items purchased by the customer. At a minimum, it should be updated annually, but quarterly updates for the largest customers will reduce surprises at the executive level of your business. Roy Filkoff is a CPA and partner with Altman and Company LLC, a turnaround, restructuring and crisis- management services business. Opinion & Commentary Greg Bordonaro Editor Roy Filkoff I recommend keeping close to the customers generating 80 percent of your revenues.

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