Psychology of first purchase bonuses

First purchase bonuses (or first purchase rewards) are rewards offered for making a first-time purchase with a real currency in a store.

An example of a first purchase bonus in the game “CookieRun: Kingdom”.

Use case

This scheme is designed to enhance a company’s long-term profitability at the expense of lower initial profits. This goal suits well apps and services that can generate huge profits over time (such as freemium apps), assuming it hooks the client. Its role is similar to that of free trials or welcome packages.

The value of first purchase bonuses may vary depending on the type of services offered. The biggest drawback for the company is the risk that some individuals may attempt to create multiple accounts to receive the first purchase bonus multiple times. If the bonus is granted in the form of physical products, such a system can lead to significant losses for the company. This is why this bonus sometimes has additional conditions (e.g., it may require the first purchase to be expensive, or users may need to verify their identity to prevent them from creating multiple accounts).

When it comes to digital services and goods, the losses caused by multiple accounts aren’t that big, which allows companies to implement less restrictive conditions (or even skip them). The most optimistic scenario is one where bonuses are both permanent and can affect only a single account. An example of such a scenario are progression-based games, where the goal of the game is to progress the game’s state as far as possible, meaning that creating a new account would mean starting everything from scratch. This is why first purchase bonuses are often available in so-called gacha games.

Breaking the barrier

Status quo bias causes people to heavily stick to their habits. Once something becomes a stable routine, people become hesitant to make any changes. It may become a problem for freemium services. A person who does just fine without spending money won’t see any reason to become a spender. However, people may find themselves tempted by attractive offers. If the offer is tempting enough, they will break their non-spending habit, potentially opening the door for further purchases.

Aside from habits, people may have different reasons for avoiding purchases. For example, some people are hesitant to try something new if they are unsure whether they’ll be satisfied with the result. A free trial is the most effective way to persuade such individuals, but a first purchase bonus may also be effective.

Another example would be people who spend money only on necessities or things that can’t be earned for free. Many of these people won’t spend money on something that could save their time, such as ad removal. With digital products, the attempt to break that barrier won’t cost the company anything – in a pessimistic scenario, they will still not pay, and in an optimistic scenario, they may change their minds.

Consequences of temporary comfort

The primary purpose of a first purchase bonus is to enable people to experience a higher quality of life. The mere ownership effect is a phenomenon that causes people to rate things they own more favorably than they would otherwise. Providing people with a sample of your valuable product will increase their likelihood of considering it for purchase again in the future.

Additionally, loss aversion often prompts people to avoid losing privileges and goods they already possess. A desire for progression is like a meaning of life to us, and losing something is the exact opposite of it. People, once accustomed to premium services, often experience discomfort when their privileges are lost.

Subconscious connections

Technically, the first purchase bonus is a highly beneficial transaction (at least it should be). For a person who made only one purchase, the sentence “all my purchases in the shop were highly beneficial” will be true. Even though logically it doesn’t mean that future purchases will be the same, people tend to have their judgment influenced by their previous experiences. Although the effect won’t be as strong as repeated conditioning, it may alter the subconscious judgment for some users.

Every time quality of life improves, people may experience a dopamine hit. Some people crave this more than comfort and stability. Such individuals will eventually seek out the dopamine in the place where they previously obtained it, which can be the shop.

Controversies

Since the goal of this promotion is to encourage players to spend, people may perceive such offers as a form of corporate greed. Since such promotions work best with apps designed to drain wallets over time, their appearance may be an indication of significant expenses in the future. People who try to manage their money rationally may avoid games/services that have such schemes.