Square's heavy focus on merchant services now includes introductory marketing tools aimed at small businesses already using the mobile point of sale company to email coupons to customers based on how often they visit a store.

The marketing program offers three pre-configured groups of a merchant's customers, dumped into buckets labeled loyal, casual and lax. Square spokesperson Faryl Ury said the categories rely on multiple datapoints, including frequency of visits and how recently a customer has visited. But she wouldn't specify the other factors, such as marketing based on purchase revenue.

Square already offered various data analytics services—such as Square Insights, which deals with anonymized and aggregated sales analysis—but "we've now made it actionable," Ury said.

The new marketing program offers little customizability, though the program is desgined for small merchants that have no marketing program or a perform marketing that's entirely manual. For example, the Square appears to allow no action based on level of spend, which would enable different campaigns for a store's top customers. It also does not enable marketing based on the type of spend, which would allow a mechanic, for example, to send one promotion to people with older cars and a very different one to those with new cars.

One of the marketing program's pilot merchants, Newport Beach, Calif.-based Baking Betty, is using Square Marketing to improve its ability to track redemption. A Square user since 2009, Osterberg—whose store has nine employees and sells about 200,000 cookies a year, in 28 flavors—had been using two e-mail distribution services (ConstantContact and then MailChimp) before using Square's marketing program.

Emily Osterberg, the owner of Baking Betty's, had been using these services to send newsletters and other content, but not coupons and direct promotions.  With Square, she sends to all customers and the system—which is tied into Square's POS—gives detailed reports about how many customers redeemed the coupons and when they redeemed. The system also prompts shoppers to comment through the receipt and Osterberg said many of those comments have been helpful, including one that flagged a bad customer service experience.

"I would like to be able to customize things individually, but I am still seeing great results," Osterberg said.

Ury said that the system does allow for more customization, but it's entirely manual, which undercuts the main value for small businesses that tend to strongly prefer preconfigured options. "At the moment, you can only do that with the customer lists you put in yourself," said one Square official.

The analytical tools are free, but the part of the program to send e-mails costs 10 cents per message sent. There's also a $15/month option for sending an unlimited number of e-mails to as many as 500 customers, Ury said, along with a $30/month option for sending e-mail to as many as 1,000 customers.

Although this is only an initial barebones effort, the potential for small businesses to heavily leverage POS data for CRM and marketing purposes is huge. Beyond far greater customization and a more sophisticated use of that store's data, one thus-far-untapped option is for aggregated universal data from Square, something that most POS players are reluctant to do. Many of Square's customers use that app at a wide range of local merchants, meaning that Square knows much more about those customers than their activity in any one store.

This data could reveal information or services such as flagging merchants when groups of their customers are sharply increasing their spending at other merchants. Quickly sending tailored e-mails to those customers could have huge value.

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