Payment company Square is straying outside the payments sphere into the world of marketing. The company has changed the way small businesses accept payments and now wants to transform the way they advertise with Square Marketing.

Square Marketing is a set of tools that lets brick-and-mortar businesses act more like online retailers when it comes to setting up and tracking the effectiveness of marketing campaigns. The tool is looking to set itself apart from competitors like Salesforce, Marketo and MailChimp by using the data collected from Square's payment devices to create targeted email campaigns.

Existing Square customers already have  access to a data dashboard which gives them an overview of their current business but it will now come with an "engage your customers" link which will launch the new marketing tools.

Retailers regularly ask customers for email addresses by hand to entice return business, but often the supplied addresses are faked or defunct. Square payment users get email receipts and if people want a record of their payments they are likely to provide authentic email addresses. Having access to this data puts Square in a unique position to launch effective email campaigns for its brands.

"The first big step is to empower these small businesses with tools that help them deepen their relationships with their customers," said Kevin Burke, head of customer acquisition at Square. "For the first time, small businesses can now deliver a message to the right person at the right time with the right context, which will increase the likelihood for that customer to value that engagement and also act on it." Burke left Visa, where he was chief marketing officer, just last December to become head of customer acquisition for Square.

The tool sorts customers into three groups based on the number of visits over the past six month period: loyal customers (3+ visits), casual customers (1-2 visits) and lapsed customers (no visits). This allows businesses to send targeted emails to different types of customers, and Square Marketing compares email recipients with credit card swipes to show marketers how it drove actual sales.

Square claims the marketing tool doubled merchant's email open rates and redemptions during the tool's pilot program, resulting in an extra $1 million in sales. Baking Betty's in Newport Beach, Calif., uses TV and print to target existing customers, but the bakery's president, Emily Osterberg, said she found the Square emails were much more effective in attracting return business.

Square Marketing charges 10 cents per email on an "as you go" basis or $15 a month for unlimited emails to 500 customers. If the tools can produce the results that Square is promising that seems a good deal, but the problem might be convincing Square customers, many of whom are very small merchants not versed in the intricacies of online marketing, that they need email campaigns. Though given Burke's title as head of customer acquisition it could be that Square is targeting a new type of customer with more sophisticated marketing needs. Either way, it's potentially a very lucrative move for Square, whose white terminals having become commonplace in coffee shops around America since being launched by Twitter co-founder Jack Dorsey in 2010. 

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