Square's Early Testing Program Connects With Merchants
Payments company Square is different from many consumer technology startups in that many businesses use the service all day for retail transactions in brick-and-mortar locations.
The transactions are critical to these businesses and have to work in many different situations in the “real world.” So Square’s multi-tiered testing program is a key part of its development process for its hardware and software.
The quickly growing payments company, headed by Twitter cofounder Jack Dorsey, last year announced a major deal with Starbucks and raised a major funding round valuing the company at $3.25 billion. Behind that growth is an in-depth testing program with small businesses to not only get feedback on new products but to keep Square connected with its merchants and learn about their most pressing business needs. While Square is ultimately used by consumers, Square’s essential customers are its merchants and the testing is an important part of its relationship with them.
Square's Coffee Bar
In one example, Square last year was working on a Discounts feature for merchants. Square’s merchants in its testing program told the company that they wanted that feature badly, so Square moved it to the top of its feature list and released it last June.
The merchants also impacted the make-up of the feature, which gives percentage or dollar discounts on items. While merchants could simply lower the price of items, that wasn’t what enough. They wanted to emphasize to customers how much they saved, so that every discount a customer gets would show up on receipts and on Square Wallet transactions. It’s a way for businesses to connect with their customers. That’s eventually how Square released it. It’s one example of the things Square learns from its merchants through testing.
“Small businesses want people to know they got a discount,” says Mike Thole, merchant engineering lead at Square. “They want you to see the French fries are complementary (on the receipt). That’s very powerful. They all have a close relationship with their customers.”
For every new release or update, Square first does automated testing, which catches the major bugs. But that doesn’t catch everything. So the company tests internally at its two in-house meal spots, its Coffee Bar and Square Kitchen. They’re are set up to run like real-world businesses, with employees conducting all their transactions using Square Wallet. (Employees get reimbursed for some of their meals transactions.) Weekly company-wide meetings also have pizza purchases available during its Square Tavern.
For more focused testing of new releases, Square organizes “testing parties,” which pull in employees, some of whom are not working on the release, such as engineers, designers and product managers. The parties are held weekly or even multiple times per day just before a launch, with releases that are almost ready for the public but still running on test servers. Corey Lambert, Square’s internal testing lead, started the testing parties when he joined in May 2011 and now they’re a normal part of the release cycle. The internal testing catches bugs. For example, when Square changed how it calculated tips, the tips didn’t show up correctly. Square’s barista Kat Forck notified the testing team. “We can fix that in an hour instead of several hours. Because we’re testing internally, we never get to the point of pushing things like that in the real world,” Lambert says.
Merchants are the key part of the testing process through Square’s preview program. Square brings certain merchants in to the office, such as local favorites Devil’s Teeth Baking Company and Pinkie’s Bakery, to sell their products on certain Fridays—and to test new builds.
For more in-depth testing, Square has a preview program with up to 50 merchants, in which it gives the merchants early access to new releases. Square asks the merchants for feedback before the releases are publicly launched. “They get to preview everything before (launch),” says Andy Santamaria, small business research lead at Square.
Alex Goretsky, co-owner of Caffè La Stazione in San Francisco, has been testing Square’s products since just after the launch of Square’s initial iPhone credit card reader. About once a quarter, Square sends him a new version to try out. Goretsky, who now uses the Square Register on the iPad, has given suggestions to the company, such as a loyalty program or gift cards. When Square introduced tipping, Goretsky made suggestions he thought would improve it.
For the loyalty program, Goretsky suggested a pre-paid loyalty card, which locks customers in to coming back to merchants they have paid for. Square eventually launched a more traditional loyalty program like a punch card in which customers could, say, buy ten and get one free.
Some of the feedback Santamaria gets is about specific features, such as adding discounts within the Square app or receipt printing. That helps with prioritization of new features. But often Santamaria seeks out merchants to talk more generally about their businesses and find out what challenges they face. It’s also a form of customer service, and a way of staying on top of the pulse of its customers’ needs. “It’s (asking them) what’s keeping them up at night, and less of, ‘If I just had this one feature,’” Santamaria says. “Then we can develop features around that.”
Those more general conversations can still result in specific products. For example, Square’s dashboard for merchants lets them quickly see a visual graph of activity in their business over time. “They don’t want to pound an Excel spreadsheet,” Santamaria says. “The merchant dashboard came from talking to a lot of businesses in every vertical…. They’ll say, I just need to find out when is the busiest time of day. That influences staffing decisions. What items are selling? What is the best time of day or the most popular items?”
Santamaria and his team develop close relationships with these merchants. He’ll travel around the country visiting different merchants, learning everything about how their business works. He once spent two weeks straight just visiting hair salons.
Square’s testing philosophy is: don’t ever call it beta testing, Thole says. Unlike other companies, Square doesn’t believe a product should be put out in the public when unfinished, which the “beta” tag implies. The products should work perfectly, he says. To make that possible, a lot of testing is required.