Podcast Title: TikTok Shop Insiders
Host: Ivan
Guest: Pat
Episode Title: Are You Missing Out on TikTok Shop’s Biggest Growth Hack?
Release Date: November 22, 2024

Introduction

In this episode of TikTok Shop Insiders, hosts Ivan and his colleague Pat delve into the latest strategies, updates, and growth hacks essential for brands navigating the TikTok commerce landscape. They kick off the discussion by updating listeners on recent milestones and shifting the focus to some vital TikTok Shop features and policies.

1. Milestones and Updates

Podcast Growth and Rewards

Ivan and Pat celebrate reaching nearly 17,000 downloads, surpassing their initial 10,000-download milestone. To commemorate this achievement, they rewarded themselves and their spouses with a dinner at an Italian restaurant in downtown San Diego. Pat humorously suggests future rewards for hitting 100,000 downloads, indicating plans for more substantial celebrations such as a camping trip or a getaway to Palm Springs ([01:01]).

URL Change Due to TikTok's Cease and Desist

The hosts announce a significant change due to a cease and desist notice from TikTok, prompting them to shift their website URL from tiktokshopinsiders.com to socialcommerceinsiders.com. They reassure listeners that the podcast name will remain TikTok Shop Insiders for recognizability and SEO purposes until TikTok mandates otherwise. Ivan emphasizes the importance of including a disclaimer to clarify their unofficial status with TikTok ([03:26]).

2. Key Updates and Features

a. Refundable Samples

Introduction of Refundable Samples

Pat introduces the concept of refundable samples, a new feature in TikTok’s open collaborations. This system allows brands to offer samples that affiliates can purchase initially but get refunded upon meeting specific criteria, such as generating a sale through a video. This initiative aims to enhance the quality of affiliate-generated content by mitigating the risk associated with distributing free samples.

Pat: "This takes away the risk of giving out samples for videos that don't result in anything." ([05:02])

Benefits and Implementation Strategy

Ivan and Pat discuss how refundable samples encourage affiliates to create higher-quality videos, ensuring that only those who can generate sales are incentivized to produce content. They outline a tiered approach where top-performing affiliates receive free samples, while others can opt for refundable samples, thereby maintaining a balance between cost and quality.

Ivan: "This helps us have that second step now before we were kind of like ghosting, you know, creators that might do that." ([06:25])

b. Dispatch SLA Policy Adjustments

Policy Changes During Holiday Season

Pat explains adjustments to TikTok Shop’s Service Level Agreement (SLA) for dispatches, especially pertinent during peak seasons like the holidays. Previously, sellers were penalized for delays in shipping due to carrier issues (e.g., USPS not scanning packages promptly). The new policy allows sellers to count shipments as meeting the two-day SLA once a proper tracking code is inputted, regardless of carrier delays.

Pat: "Despite doing everything right now, the change is if you have a proper tracking code and you input it into the system, that counts as your two day SLA." ([08:10])

Impact on Sellers

This adjustment is hailed as a positive move, easing the burden on sellers who previously faced penalties despite adhering to shipping protocols. It reflects TikTok’s responsiveness to seller challenges during high-volume periods.

c. Customer Messages: A New CRM System

Introduction to Customer Messages

Ivan introduces TikTok Shop’s new Customer Messages feature, a CRM tool designed to help sellers manage interactions with potential and existing customers. This tool allows for targeted communications, such as promoting sales during events like Black Friday or sending automated messages to recover abandoned carts.

Ivan: "There’s an automated message... you can include a coupon with that messaging as well to close the trying to get that account." ([10:26])

Eligibility and Usage

To access Customer Messages, sellers must meet specific criteria:

• Response Rate: Over 80% within 24 hours.
• Shop Violation Points: Fewer than 12.
• Gross Merchandise Value (GMV): Any amount over $1.

This ensures that only reliable and active sellers can leverage the CRM features to engage effectively with their audience.

Pat: "It has rolled out to everyone but you have to meet certain criteria for it to be available to you." ([09:34])

d. Messaging Limitations and Strategies

New Messaging Caps Based on GMV

A year ago, sellers enjoyed unlimited messaging capabilities. However, recent changes have introduced restrictions based on GMV:

• 0-2,000 GMV: Up to 2,000 messages per week.
• 2,000-50,000 GMV: Up to 7,000 messages per week.
• Above 50,000 GMV: Unlimited messaging.

Strategic Responses to Messaging Caps

Pat and Ivan share strategies to navigate these limitations:

• Boosting GMV: Utilizing high-ticket items or encouraging affiliate-driven sales to quickly increase GMV.
• Leveraging Affiliates: Ensuring that sales are attributed to affiliates to qualify for higher messaging tiers.
• Category Managers: Assigning category managers to unlock higher messaging limits for clients.

Pat: "It has to be GMV generated by an affiliate... you can still have unlimited outreach if you have the right category manager." ([15:35])

3. Deep Dive: GMV Max

Understanding GMV Max

Overview of GMV Max

GMV Max is TikTok Shop’s automated advertising solution that leverages the platform’s algorithm to optimize ad placements across various TikTok channels, including the feed, search, and shop tabs. It utilizes brand-provided content and affiliate-generated Spark codes to create a dynamic advertising strategy.

Pat: "With GMV Max, it's a lot of automation... it takes advantage of all the shoppable placements that are on available on TikTok." ([17:10])

Content Integration

Brands input their content—videos with tagged products and Spark codes—into GMV Max via the TikTok Ads Manager. The system then selects and places these videos in optimal locations to maximize visibility and sales.

Pat: "So GMV Max will pick up any of those videos into its own." ([18:04])

Setting Up and Managing GMV Max

Campaign Creation and Budgeting

To set up GMV Max, brands:

1. Upload Creative Content: Add Spark codes and videos to the Creative Library.
2. Create Campaigns: Assign a daily budget and set a Return on Ad Spend (ROAS) target.
3. Product Selection: Choose specific products to advertise, creating separate campaigns for each.

Pat: "The only two things you can really see at the creative level are product impressions, product clicks, sales..." ([20:08])

Optimizing ROAS Targets

Setting effective ROAS targets is crucial. Pat recommends starting with a ROAS of at least 2, adjusting higher based on product price points and brand objectives.

Pat: "I would start at least a 2 ROI on the more aggressive side... if you have a lower priced product, it's going to be harder to achieve that target ROI." ([24:46])

Attribution Challenges and Measurement

Differentiating Organic and Paid Sales

A significant challenge with GMV Max is attribution, as it combines both organic and paid sales within its GMV metrics. This makes it difficult to discern the direct impact of ad spend on sales.

Pat: "If you were formally making only, you know, $1,000 a day, and since you started GMV max, It's jumped to $5,000 a day... That’s your ROI." ([28:26])

Measuring Effectiveness

To gauge GMV Max’s effectiveness, Pat suggests:

• A/B Testing: Running periods with and without GMV Max to compare sales performance.
• Overall GMV Analysis: Monitoring total sales relative to ad spend to infer GMV Max’s contribution.

Pat: "The only way to know is turn on GMV max for a week and then turn it off for a week and then see what the delta is between the two." ([28:27])

Best Practices and Recommendations

Creative Volume and Freshness

Maintaining a large pool of high-quality creatives (Spark codes) is essential to prevent creative fatigue and ensure continuous ad performance. Brands should regularly refresh their content and maintain a diverse set of videos to keep the audience engaged.

Pat: "If you don't have enough content... it becomes less effective over time because people tune it out the more they see it." ([30:34])

Budget Allocation

Starting with a substantial daily budget (e.g., $500-$1,000) allows TikTok’s algorithm to optimize effectively. Brands should scale their budgets as they gather more data and refine their ROAS targets.

Ivan: "If you don't have enough budget and enough creative, it doesn't allow TikTok to spend enough to optimize the campaign." ([29:56])

Early Adoption Benefits

Early adopters of GMV Max can capitalize on less crowded advertising spaces before competition intensifies, especially during peak shopping seasons when ad costs rise.

Pat: "It's becoming more necessary per se in this TikTok shop world... it's important to get on there sooner than later." ([30:21])

4. Conclusion and Wrap-Up

Ivan and Pat conclude the episode by emphasizing the importance of leveraging GMV Max for established brands looking to maximize their TikTok Shop presence. They encourage listeners to engage with their new Slack group at socialcommerceinsiders.com for ongoing support and to provide feedback through reviews.

Ivan: "Any other questions, please kind of let us know in our Slack group... that wraps up for today's episode." ([32:01])

They express gratitude to Pat for his insights and reiterate their commitment to helping brands navigate TikTok Shop’s evolving landscape.

Key Takeaways

• Refundable Samples: A strategic tool to enhance affiliate content quality by mitigating risks associated with free samples.
• Dispatch SLA Adjustments: Positive policy changes that benefit sellers during high-volume periods by simplifying delivery tracking requirements.
• Customer Messages CRM: A valuable feature for targeted customer engagement, provided sellers meet specific criteria.
• Messaging Limitations: New caps based on GMV require strategic planning to maximize outreach within limitations.
• GMV Max: An essential automated advertising solution for established brands, offering significant benefits but posing attribution challenges. Success depends on creative volume, budget allocation, and strategic optimization.

Notable Quotes

• Pat on Refundable Samples:
  "This takes away the risk of giving out samples for videos that don't result in anything." ([05:02])

• Ivan on Messaging:
  "It has rolled out to everyone but you have to meet certain criteria for it to be available to you." ([09:34])

• Pat on GMV Max Benefits:
  "It's becoming more necessary per se in this TikTok shop world... it's important to get on there sooner than later." ([30:21])

Thank you for tuning into TikTok Shop Insiders! Stay updated with the latest TikTok Shop strategies by joining our Slack group and visiting our new website at socialcommerceinsiders.com. Don’t forget to leave a review and share your feedback with us.