Understanding the role of loyalty in a world of sanctions
Twenty five years ago, I was one of a handful of journalists invited to Moscow for the opening of the very first Mastercard ATM in Russia.
The experience was eye-opening. I was prepared for shops with nothing to sell; queues for goods we take for granted. I didn’t expect the boss of Most Bank, (at the time one of the most powerful men in the country before he was thrown into prison) to arrive with Kalashnikov carrying outriders, driving over obstacles to get him as close to the shopping centre entrance as possible. I didn’t expect airline passengers to drop revolvers and pick them up to put back into their pockets while waiting to check in, or to be told by Richard Tischler (where are you now Richard?), head of comms then for Europay (now part of Mastercard) that he was relieved the press conference had ended without someone throwing a grenade as had been feared. Really? Thanks for warning us! Payments explanation: At that time there was an ongoing battle between two rival payments networks – literally!
I also didn’t expect the opulence, although there was definitely the sense that Russia was emerging after a long and cold winter of tough communism.
We were greeted with vast quantities of expensive food, champagne and vodka at every bank we visited during that dreamlike afternoon (while craving just a cup of tea!). Then given lobster, and strawberries dipped in chocolate for dinner, even though it was the middle of the Russian winter. The surprise when turning a corner in the magnificently restored hotel in Red Square, to find not canned music, but a girl in exquisite ballgown playing a harp, or a violin quartet on another floor was completely surreal.
We dropped in by mistake to see the artists restoring paintings in a tiny, chilly room at the back of that iconic church in Red Square that is always used in photos to illustrate a story about Moscow, and the alarm of my press minders when I went up to the Red Square guards to ask for directions. “You could have got yourself shot!” yelled Richard in panic (losing one of the journos on a press trip was considered bad practice).
Now, with Mastercard, Visa and American Express closing their networks as part of the sanctions against a warmongering Putin, all of this comes back to me. The ordinary people of Russia, like those of most Eastern European countries have a history of suffering because of the political ambitions of their leaders. Most would prefer to live in peace. It is the ordinary people that will suffer most from the closing of their payment methods. There is a Russian alternative payments network, but the international networks are used the most. Most sanctions will hurt the ordinary people, but it is difficult to know what else to do.
At the moment our loyalties are changing for most of us in the west. The supermarkets are removing Russian vodka from their shelves and Better Naked and Sainsbury’s have already changed the name of their chicken escalopes from Chicken Kiev to Chicken Kyiv. It is a small change, but significant.
Closures
Agency WPP is closing Russian operations with the loss of 1200 jobs. That is 1200 Russians and their families who will now struggle, and WPP bosses are aware of the implications, saying they feel they have no choice.
Shell on the other hand has just bought Russian crude, arguing that it couldn’t meet its European commitments otherwise. It is a reasonable argument, but will our loyalty to Ukraine and its suffering people, lead us to shun Shell petrol stations and sell our shares in a show of solidarity? It is an undeniable fact that sanctions will hurt us in the west as well as those who live in Russia – and innocent citizens as well as politicians and oligarchs. But there is no alternative.
So in the coming days and weeks, our loyalty will change based on what we know about the companies with which we do business and their shareholders.
In the UK we learned this weekend that health food chain Holland and Barrett is 50% owned by two Russian oligarchs. This will be enough to stop many people shopping there anymore.
And there will have to be sacrifices for us too.
Today we learned that it is not just Russian gas and oil on which we are reliant, but Russian artificial fertilizers too. Without this supply, there will be a shortage, and food costs will go up. Brent crude oil is already double the price it was a year ago. Companies are urgently divesting themselves of Russian investments, which will harm pension funds. The list goes on.
In the last 18 months, everything about our comfortable, certain life has been thrown into confusion. We fear covid infection from others; we now have an uncertain world peace and the cost of everyday essentials is rocketing. Unbelievably, there is a threat of the Russia/Ukrainian problem escalating into Europe and beyond. We probably can’t be certain that the utilities in our homes that we take for granted will maintain their uninterrupted supplies.
Businesses will have to think very carefully what image they project, who they support and how they maintain customer loyalty in a very difficult economic environment where anything can happen next. We will all be making choices we wouldn’t have imagined possible just a few months ago – and preparations. Do you know where the matches and candles are for example?
To finish on a positive note, all of this turmoil will have to mean a faster route to green alternatives for power, for farming and for the way we run our lives. The record number of entries for the International Loyalty Awards demonstrate consideration for the environment and an understanding of what customers consider is important. As always it is the customer who has the power. And as always, that means there is hope.
The International Loyalty Award 2022 list of Finalists will be published soon, and will be appearing here at www.loyaltymagazine.com.