Creating Conditional Discounts for First-Time Buyers

Direct-to-consumer brands face a critical challenge: converting first-time visitors into customers. While the standard approach involves using discount codes in pop-ups or ads, this method has drawbacks. Many visitors don't want to share their email before shopping, and discount code entry creates an extra step at checkout that can lead to abandonment. A more elegant solution is an automatic first-purchase discount that applies seamlessly when the system detects a customer has no previous orders.

Standard Shopify discounts don't support customer history conditions, but with the Sway Functions Generator, you can create sophisticated conditional discount rules that identify and incentivize first-time buyers automatically.

The Business Case for First-Purchase Discounts

Step-by-Step Implementation

1. Access the Discount Functions Section

1. From your Shopify admin, open the Sway Functions Generator app
2. Click on "Functions" in the main navigation
3. Select the "Discounts" tab

2. Create a New Conditional Discount Function

1. Click "Create function"
2. From the modal, select "Conditional Discount"
3. You'll be taken to the function editor

3. Configure Basic Settings

1. Enter a descriptive campaign name (e.g., "First-Time Customer Discount")
2. Select the discount class (typically "Automatic Discount")
3. Set the qualifier behavior to "Discount if all qualify"

4. Set Up First Purchase Qualifier

This is the key to identifying new customers:

1. Under "Customer Qualifier," select "Order Count"
2. Choose the condition "equals"
3. Enter "0" as the value
4. This ensures only customers with zero previous orders will receive the discount

5. Configure Your First-Time Discount

1. Select "Percentage Discount" as the discount type
2. Enter your first-purchase discount percentage (e.g., 20%)
3. Add a message like "Welcome! Enjoy 20% off your first order"

6. Set Combination Rules

For first-purchase discounts:

1. Under "Combine with," allow combination with shipping discounts
2. Typically disable combination with other product discounts

7. Configure Discount Settings

1. For evergreen new customer acquisition, leave the end date open
2. Consider whether to set a maximum discount amount to protect against very large first orders

8. Save and Test

1. Save your function
2. Test thoroughly by creating test orders with both new and returning customer accounts

Advanced Configuration Options

Minimum Purchase Threshold

To ensure profitable first orders:

1. Add a cart total qualifier to your discount function
2. Set a minimum order value (e.g., $50) to qualify for the first-time discount
3. This helps protect margins while still incentivizing conversion

Product-Specific First-Time Offers

For strategic product adoption:

1. Add product collection or tag qualifiers to your first-time buyer function
2. Create different first-purchase discounts for different product categories
3. For example, offer a higher discount on your flagship product line for new customers

Enhanced First-Purchase Tiers

For upselling new customers:

1. Create multiple first-purchase discount functions with different order value thresholds
2. For example:
   • First order of $50-$99: 15% off
   • First order of $100+: 20% off
3. Set appropriate priority levels to ensure the most beneficial discount applies

Implementation Example: DTC Brand First-Purchase Strategy

Here's a real-world example from a direct-to-consumer beauty brand:

1. Basic First-Time Customer Strategy:

   • Qualification:
     • Customer has zero previous orders
     • Minimum cart value: $40
   • Discount Structure:
     • 20% off the entire order
     • Maximum discount amount: $100
     • Message: "Welcome! We've automatically applied a 20% new customer discount."

2. Enhanced First-Time Strategy:

   • During new product launch periods:
     • Increased discount: 25% off
     • Lowered threshold: $30 minimum
     • Added benefit: Free shipping on first orders
     • Message: "Special welcome offer: 25% off + free shipping on your first order!"

Merchandising Your First-Time Buyer Discount

To maximize the effectiveness of your automatic first-purchase discount:

1. Highlight on Homepage - Feature the automatic discount prominently for new visitors
2. Add Banner Messaging - Use site-wide banners to announce the first-purchase benefit
3. Include in Product Pages - Remind potential customers as they browse products
4. Emphasize in Cart - Show the discount automatically applied in the cart
5. Avoid Email Gates - Don't require email capture before showing the discount

Real Results: DTC Brand Case Study

A direct-to-consumer skincare brand implemented automatic first-purchase discounts with these results:

• 34% increase in new customer conversion rate
• 27% decrease in cart abandonment rate
• 40% reduction in cost per acquisition
• 22% increase in average first order value
• 12% improvement in second purchase rate

Measuring Success

To evaluate the effectiveness of your first-time buyer discount strategy, monitor these metrics:

• New Customer Conversion Rate - Are more visitors converting to first-time buyers?
• First Order AOV - Are new customers spending more on their initial purchase?
• CAC (Customer Acquisition Cost) - Has the cost of acquiring new customers decreased?
• Second Purchase Rate - Are first-time buyers returning for a second purchase?
• Customer Lifetime Value - How does the long-term value of discount-acquired customers compare?

Common Issues and Solutions

| Issue | Solution | |-------|----------| | Discount applied to returning customers using new email | Implement additional verification like IP or address matching | | First-time discount too shallow to drive conversion | Test different discount percentages to find optimal rate | | Low average order value on discounted first purchases | Add minimum cart value requirement | | Discount eroding perception of brand value | Focus messaging on exclusive welcome offer rather than discount |

Next Steps

Ready to implement automatic first-purchase discounts for your direct-to-consumer brand? Start by:

1. Analyzing your current new visitor conversion rates and abandonment patterns
2. Determining a compelling yet sustainable first-time discount percentage
3. Setting appropriate minimum thresholds based on your product pricing
4. Creating your conditional discount function
5. Developing clear marketing messaging that highlights the automatic benefit

For personalized assistance with your new customer acquisition strategy, book a consultation with our team.