Cementing customer loyalty

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.