The Department 3 Blog
Direct Marketing Data and the Square Success Story
August 29 2018, Michael Concannon
There are companies driving entire sectors forward, due to their focus on innovation and optimizing growth. Direct marketing data is one facet of their success, but they just do everything right. We’ve been lucky to work with one of them over the years: Square.
The Motley Fool took note of Square recently, shining a spotlight on the company’s outstanding increase in share price over the past year:
Up 110% year to date and 192% over the past 12 months, expectations for the company are sky-high. Can Square keep investors happy?
What’s propelling that success? Two products that have had breakout success: Its peer-to-peer payment service, Cash App, has been a huge hit, and has even overtaken the previous 800-pound gorilla in the segment, Paypal’s Venmo. Meanwhile, its restaurant delivery app, Caviar, has more than doubled revenue year over year as of Q2 2018.
In both cases, these products are succeeding because Square has an inspired understanding of how their customers use these apps. In the case of Cash App, they know the value of not just an easy-to-use app, but of making it part of a convenient “ecosystem of consumer services,” as Motley Fool puts it. So far, that includes a debit card, its Cash Boost rewards system, and Instant Deposit.
Caviar’s success is built on Square’s established success servicing its restaurant customers, and how that performance has opened the doors to other products, too, like Square Payroll, Square Capital, their Square for Restaurants point-of-sale platform, and more.
Square’s success stems from an even deeper ethos, however. Jack Dorsey may get more public press for being a founder and CEO of Twitter, but in that same role at Square, he’s applied nearly identical thinking to a different set of challenges.
As he put it? My goal is to simplify complexity. I just want to build stuff that really simplifies our base human interaction.
If ever a segment needed simplification and ease of interaction, it was certainly the consumer payments space. The simplicity Square brings to mobile payments is, over course, only the visible skin overlaying a serious amount of sophistication and complexity.
Companies like Square look to extract every advantage, every possible efficiency, from every facet of their business. Whether they’re looking for new growth surfaces within existing products or entering entirely new sectors, aggressive optimization of each detail – of product design and development, marketing, customer support and community-building – is what sets them apart from the rest of the pack. It’s an approach that enables these companies to overcome first movers and industry giants alike.
Hows does direct marketing data figure in?
It’s not so much the data itself, but how these companies extend that focus on optimization we just mentioned. They apply it to how they capture, filter, and apply prospect and customer data to extract maximum results.
Growth-focused companies in SaaS and beyond attach enormous value to quality data and actionable insights. Why? Because data drives not just marketing but the feedback-focused, iterative, testing-driven “design thinking” process that’s a cornerstone of their product development process.
The same obviously translates into the direct marketing efforts of technology companies on a number of fronts that we can observe:
- Campaign optimization allows them to extract maximum business value and ROI from every direct marketing campaign, which is vital if you’re in a hotly contested segment. It’s also just good business for a lean startup or any company that embraces efficiency.
- Personalization is crucial with customers, as they expect to be recognized and rewarded as individuals, no matter where they are in the buying process or user lifecycle. Only proper data optimization can allow this to happen.
- Empathy is a tentpole of the iterative, continuous process of improvement that drives modern organizations in SaaS, and developing it depends on deeper understanding of customers – an understanding that’s aided by quality data.
- Analytics are central to the test-and-refine methodology underpinning product design, prototyping, and updating, and analytics are only as good as the data that go into them. The same philosophy that applies to SaaS product development applies to direct marketing: The data you mine for insights you base key decisions upon has to be of the highest possible quality.
That approach to direct marketing data gives greater precision, relevance, and impact to every campaign executed by one of these leaders. It’s only one factor, part of an entire mission and business strategy. Yet that devotion to optimizing every opportunity, product, and marketing touchpoint is a key reason why the Squares of the world are ahead of the game.
For those of us who get the chance to work with companies like that, it’s a lesson we’re privileged to learn.
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