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  • 10.09.15

Square Says Its Super-Simple Email Marketing Tools Are Paying Off For Small Businesses

Six months after introducing Square Marketing, the company has data that shows its digital coupons increase sales.

Square Says Its Super-Simple Email Marketing Tools Are Paying Off For Small Businesses

If you pay attention to news coming from Square, you know that it’s been a long time since all it did was process credit-card payments using its itty-bitty swiper. The expansion of its small-business services began in earnest back in 2012, with an app that transformed an iPad into a cash register. In May 2014, it turned receipts into miniature customer surveys and started fronting money to small businesses that they could repay a little bit at a time from their Square transactions. In April of this year, it launched Square Marketing, a service that lets businesses send digital offers such as discounts to their customers. And in August, it started to help businesses schedule appointments.

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These new services get plenty of attention when they’re announced–and less so from then on. That’s made it tough to tell how much of an impact they’ve had once they’re rolling. But the company recently shared some data with me, aggregated from all businesses that use Square Marketing. It shows ways in which the service–which has a basic free tier, but costs $15 per month per 500 contacts for full functionality–is paying back the merchants that use it.

Because Square handles both the offer and the payment processing, the company is able to anonymously aggregate transactions and determine how effective an offer was. “When we were looking back over some of the activity since it launched, we saw that in food-related categories, for every dollar that was spent on a promotion, [merchants] got about $20 back in terms of sales,” says Kevin Burke, the former Visa CMO who heads up marketing for Square. “That’s pretty compelling to our sellers when they see this easy-to-use tool driving such tangible results.”

Example of Square Marketing offers

“We also saw, just on average, that for buyers who were redeeming an offer, they tended to spend about 25% more on that transaction than on an average transaction,” Burke says. “Again, a really nice lift.”

Another tidbit: Square Marketing auto-sorts a business’s customers into buckets including regulars, casual, and lapsed. It says that email recipients are almost twice as likely to open email offers targeted this way than ones which a business has selected manually, and are more than 10 times more likely to redeem them.

A Little More Functionality (But Not A Lot)

Since Square introduced Square Marketing in April, it’s beefed up the features in some respects, most notably by adding Facebook integration. Besides pushing offers out to existing customers via email, a business can publish them to one or more Facebook pages, where they become shareable by visitors to those pages, giving them the potential to reach new customers as well as existing ones. (At the moment, there’s no equivalent feature for marketing via Twitter–maybe Square’s CEO could negotiate a partnership with Twitter’s CEO–but it’s possible to manually tweet a link to an online offer.)

But Square Marketing still isn’t trying to be a full-strength alternative to an email-marketing powerhouse like MailChimp or Constant Contact. Rather than offering limitless flexibility, Square Marketing provides very simple templates for offers–such as a Fourth of July special–that merchants can customize and fill in with their own specifics, such as a discount on a particular product. It then ties them into the Square Register point-of-sale system, so they’re trackable. The idea is to make things easy for mall businesspeople who want to give incentives to customers to come back–and who don’t have a whole lot of time to devote to marketing.

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I was reminded of that when Square put me in touch with Derek Tittle, the owner of Smoothie D’s, a nutritional supplement store in Temple, Texas. “I’ve got some customers right now,” Tittle politely said after answering our call. “I’m going to put the phone down for a little while, and I’ll get right back to you.”

The dashboard that lets Square Marketing merchants track sales

Once Tittle had a few minutes to chat, he raved about Square Marketing, which he began to use about two months ago along with Square Register. In the past, he’s tried advertising in newspapers and on radio and TV, as well as promoting his shops using a coupon booklet distributed locally. “They probably print 10,000 books,” he says. “Each year, I may only receive five or six of those coupons back. It’s free, but I’d rather pay 15 bucks a month and make a few thousand bucks then pay nothing and only get five or six people.”

“Sending out coupons to people in emails is far better, because I know I’m reaching nobody but my customers. I had to get their emails from them coming here.”

Burke says that Square Marketing will continue to be aimed at folks like Tittle. “What I’ve found when I talk to sellers is that they may not be classically trained as marketers, but they really understand the importance of acquiring new customers, or getting existing customers to come back for more. That’s very much how this product hits the sweet spot for them, in terms of helping them do that.”

When I asked Burke about new features, he didn’t tell me about ones that are definitely in the works–but he also didn’t resort to the typical we-do-not-comment-on-unreleased-products boilerplate. “We just launched Appointments,” he said by way of example, “and you can only imagine how that could integrate or be connected to Marketing in terms of reminding people of something that’s coming up, or offering them if we want them to come at a different time, maybe when we have more capacity.” He also says that it would be nifty to let sellers think of customers in terms of a spectrum of loyalty, so they could offer special deals to the most faithful of the bunch, and nudge less frequent visitors to return.

It will be interesting to watch Square try to rise to the challenge of making this service more sophisticated over time–without demanding more time from busy people like Tittle.

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About the author

Harry McCracken is the technology editor for Fast Company, based in San Francisco. In past lives, he was editor at large for Time magazine, founder and editor of Technologizer, and editor of PC World.

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