Square Growth Hacking
San Francisco-based Square is a mobile payments and merchant services aggregator. It allows individuals and businesses in the U.S., Canada, and Japan to accept debit and credit cards on iOS and Android smartphones and tablets.
The cardholder’s information can be captured either by swiping the cards through an attachment that connects to the earphone jack of the device or by manually entering the data. The company was founded in 2009 and launched its first app the following year.
Perhaps nothing has done more to drive the growth of Square than the fact that it fills a real need in a simple and elegant way. The company has completely reimagined how small businesses accept payments.
Before Square appeared on the scene, only registered merchants could accept credit card payments, which was an expensive and difficult process. It required a complicated application and the acquisition of specialized equipment.
In addition, the fee structure associated with different types of transactions often made accepting cards too expensive or forced merchants to set minimum purchase limits that customers found off putting.
“The idea for Square was born of a personal experience by the company’s co-founder, Jim McKelvey. He was unable to sell a $2,000 piece of glass at an art fair because he couldn’t accept a credit card.
McKelvey immediately saw the need for a new solution for merchants to accept payments in all kinds of venues”.
Square’s growth was certainly not hampered in any way by the high profile of McKelvey’s partner, Jack Dorsey, co-founder of Twitter. Not only did Dorsey bring personal influence to the Square project, he aggressively sought early customers and investors with an audaciously entitled list of, “140 Reasons Why Square Will Fail.”
Each time Dorsey put the list in front of potential investors, he neatly offered a counterpoint for every objection raised. That piqued the interest of investors, cultivated a “can do” reputation for Square as a company, and gained a lot of attention in the tech press.
Coupled with product demonstrations that highlighted the integrated hardware / software solution’s ease of use, the “in your face” approach immediately communicated Square’s high value propositions.
Setup and configuration of the point of sales systems was only the beginning, however. Once in place, Square offered participating merchants insights mined from the collected data and delivered the material via a gorgeous reporting package.
For instance, Square can pinpoint the most popular menu items for restaurant owners and target their busiest days of the week and month.
Small businesses can then implement big business strategies that enhance customer loyalty and satisfaction — all while reducing the friction in purchases. With Square, they could make intelligent “big” business decisions for a fraction of the price those metrics would otherwise cost.
The growth team at Square could have stopped there and likely still have had a winning product, but they insisted that the hardware (the plug-in reader), be as eye-catching as possible. Paying for an item through the Square system always generates conversation.
“What is that thing?” customers ask, as they experience signing with their fingers on an iPad or iPhone and promptly receiving their receipt via email. Simply put, Square makes it fun to pay by credit card, and that generates word of mouth. Consumers like novel experiences, and they like to be surprised.
Early on, Square established a close relationship with Apple, which stocked and sold the readers for $10 in every store after the company launched, and made the app available for download in the iTunes store. When Square then received a strategic investment from Visa, it gained a boost in perceived credibility that led to even higher rates of adoption.
All of these elements combined to create a passionate user base. Square customers are more than willing to rave about the product, which only generates more growth. When a user pays for an item for the first time on Square it is almost impossible not to tell the “story.”
Square’s success at developing its product and growing its user base is a perfect example of filling a real need with a beautifully designed solution that is the focus of consistent improvement all targeted toward enhancing the user experience.