Square released a new marketing tool today designed to help local businesses that use Square Register run targeted email advertising campaigns. The new service, Square Marketing, is designed to let merchants reach previous customers with online promotions and then track how those emails convert into sales. Basically, it's a way for businesses to get customers to come back again. It's a nice tool, but what's maybe more interesting is where it indicates Square is going.
The marketing service itself, part of a suite of new customer engagement tools, is pretty straightforward. Because Square can associate email addresses with specific cards and customers, it is able not only to know how often someone comes in, but also how to contact them. Which means a business can run a promotion aimed at frequent customers or to customers who have not returned in a long time — the former might get an invitation to a special event while the latter might get a coupon, for example.
It has also created a series of templates that businesses can use to build and send these targeted campaigns. And finally, it can generate reports to show campaigns efficacy — not only can it tell whether or not someone opened the email, but because it has that database of email tied to cards, it can track actual conversions.
What's really interesting, however, is that Square is continuing to use the data it has built up around transactions to develop new products and services. This has been a push for the company for some time now. It has long offered analytic tools to do things such as helping merchants find the best time of day to make sales. Last year it rolled out Square Capital, another data-driven service. Square Capital lets merchants take out small loans and then repay them as a percentage of sales — and because Square already knows what kind of sales volume its merchants are doing, there's no application process, and the loans are made almost immediately.
When Square started out, its big idea was that anyone, anywhere could accept a credit card. While that was revolutionary at the time, today it seems almost a given — there are lots of services vying to process transactions now. It isn't enough to simply take credit cards anymore. It now seems clear that Square's big challenge is to build a robust ecosystem of business services around all those payments.