Cementing customer loyalty

The government's designation of Sept. 4 as National Customers Day starting this year should provide the momentum for an ongoing campaign to improve the overall performance of Indonesian businesses and, consequently, the competitiveness of the national economy.

It was, we think, this broader objective that prompted President Megawati Soekarnoputri to put in a personal appearance to lead the inaugural ceremony marking National Customers Day last Thursday.

The event may be seen as part of a much broader campaign than one designed simply to propagate the importance of satisfying customers and building up customer loyalty, because achieving customer loyalty is not a single action but is the axis of an ongoing process to develop good corporate governance practices in the broadest sense.

The event was doubly significant as it was initiated by the Office of the State Minister for State Enterprises. We as consumers are all too aware about how blase or unheeding most state companies are toward their customers due largely to the monopoly or duopoly positions they occupy in their respective fields of business.

Many may still remember how until the mid-1990s one had often to pay much more than the official rate to get a telephone line installed or to have one's home connected to the power grid. Or how officials of the national flag carrier Garuda Indonesia conspired with travel agents to sell tickets way above the published rates. Customer satisfaction, let alone customer loyalty, were concepts that were virtually unheard of among state company employees. Complaining customers were simply ignored.

The situation has improved over the past few years after the dismantling of many state monopolies, the enactment of the consumer protection law, the establishment of the consumer disputes settlement board, the enforcement of the law against monopolies and unfair business practices, as well as the broader liberalization of import policy.

But most businesses, especially state companies and private- sector oligopolies, still have a long way to go to institutionalize in their corporate cultures the vital mission of creating customer satisfaction and cementing customer loyalty.

In this context, we were encouraged by the participation of 15 state companies in the ceremony marking National Customers Day. Many of them, such as PT Telekomunikasi Indonesia, Garuda Indonesia and the State Electricity Company (PLN) were formerly monopolies in their respective business areas. Several others such as PT Pelni, an inter-island ferry company, the civil service health insurance company PT Askes, the labor insurance company PT Jamsostek, and PT Pos Indonesia are in fact still monopolies.

The campaign will go a long way toward bolstering the program to develop good governance practices in the business sector and, hopefully, in the public sector as well, because building up customer loyalty means gaining customer trust.

The drive to win customer trust must start with the development of solid trust and relationships within a company, which in turn requires transparency and accountability, two of the most important elements of good governance practices. Trust is enhanced only when everyone within the organization feels they are working under a caring, sharing environment of trust. This situation in turn builds up a sense of ownership among employees, a devotion to serving customers out of a realization that it is the customers that make their businesses thrive.

Businesses are operating in a highly competitive environment where customer trust is critical because today's customers simply want the best. Anything less is unacceptable. And only satisfied, content employees are capable of giving the best to customers.

As most state companies have for decades either operated as monopolies or duopolies, or enjoyed captive markets that were created by the government, they need more time to change their work cultures, shape up their employees and forge the sort of team work that is needed to meet the challenges of the market.

As change is never easy, the instituting of National Customers Day will hopefully help sustain the campaign, and develop it into an ongoing drive to implement good corporate governance practices in order to win customer trust.