In an effort to expand beyond the merchant processing services it offers small businesses, Square has now launched a suite of online marketing tools called Square Engagement that includes an email marketing service called Square Marketing.
Background: Square is the company that popularized the notion that a smartphone or tablet can become a credit card processor by simply plugging into it a little square piece of plastic. They are a well-funded venture-backed company started by one of the founders of Twitter. Currently, as we have shared, many other companies are now offering similar mobile device merchant account services, so Square has expanded its scope to include financial services that its small business customers might need. This strategy is designed to help the company expand past the razor-thin margins of payment processing and to leverage its large installed base of customers. Here is the way Square now presents the services it offers on its website :
While similar to other email marketing providers, Square’s service provides some unique twists. For example, like other email marketing services, it can track if a customer opens an email and clicks through to a link provided. Most services can even follow the journey of the customer to an online purchase. But Square is offering the ability to track the conversion of an offer in the email to offline, in-store purchases.
Also, because the service is tied to the small business’s payment system, collecting email addresses will already be attached to the service, providing Square customers a pre-populated email marketing list.
Will Square’s strategy work?
Becoming a one-stop provider of various types of services that small businesses need to run their company has been a siren’s song since the earliest days of the web. While the integration of services makes sense on paper, the devil in the details is always execution. The users of Square’s services include a wide variety of small business owners with varying degrees of understanding on how to use services such as email marketing. Email marketing companies like Emma have become large providers of email marketing services because of their hands-on approach to customer service. And MailChimp has amassed a large user-base because of the variety of services it provides using a “freemium” model—a price with a lower profit margin than even merchant processing.
No doubt, the integration of payment processing and other financial and operational services will appeal to many Square users. However, a closed platform that ties email marketing to payment processing won’t make sense to those seeking more robust features developed over the past decade by companies like MailChimp and Emma.