My local deli owner is a gadget lover; he's always teasing me about why I never get to review the flagship phones on The Verge. He typically has a tablet or two on his counter, and when I pay with my credit or debit card, he swipes it through an Amazon or Square reader. At some point in time I added my email to Square, so usually I choose that option and get a digital receipt instead of a paper one.
Starting today my local shop owner could pay Square to send me a promotional email, part of a new offering called Square Marketing. As the company explains in its press release, "Square gives you something no one else can offer: pre-organized lists of customers who’ve already visited your store — whether loyal, casual, or lapsed — so you can target the right audience with the right message from day one. You might invite loyal customers to a "Friends and Family" event or maybe re-engage lapsed customers with a special deal."
Fingers crossed for a deal on Junior Mints
I've got my fingers crossed for a half-off deal on Junior Mints after midnight, but in the meantime, it's worth asking what this move means for Square as a business. The company was reportedly preparing for an IPO back in November of 2013. But subsequent reports painted a darker picture, with allegations that it was running low on cash and in talks to be acquired. The company denied those rumors, and talk of an IPO quieted. Square raised $150 million in a new round of funding. Over the last year and a half, it has been busy rolling out new products.
10 cents an email
Square Marketing is part of the ever-expanding offerings the company is making to merchants. Along with their card reader and register, Square offers analytics and even loans, both backed by the data it collects on purchases. Getting analytics on customer behavior has been free so far, but this new product shows Square thinks merchants might be willing to pay for the consumer data it has amassed. The company will charge 10 cents per send for its marketing emails, or $15 to send unlimited emails to 500 customers.
"In the near term it won't add a ton of revenue but this and other future marketing services over time could become a meaningful source of revenue for the company," says Greg Sterling, vice president of strategy at the Local Search Association. "True email marketing isn't as sexy as other channels but it can be very effective and it's heavily used by small and medium businesses, so there isn't a ton of education that the company needs to do."
The company claims that "during our pilot, sellers who sent out promotions saw open and redemption rates at two times the industry average. Those numbers translate into real dollars: Square sellers generated nearly $1,000,000 in sales tied directly to promotion redemptions." There's lots of competition for the marketing dollars small and medium business owners spend. Online it's common to track someone from an offer to the actual website and see if they made a purchase. The one thing Square can offer that Facebook or Google can't is the ability to see when a customer targeted with an ad actually comes in a physical store and buys something, unless of course they're using good old-fashioned cash.