Understanding total addressable market (TAM), serviceable addressable market (SAM), and serviceable obtainable market (SOM) isn’t just useful for marketers. It’s an important tool for assessing whether a business idea is viable.
These metrics give various business stakeholders, including marketers and product teams, the clarity they need to evaluate whether a new product has the potential to succeed.
TAM, SAM, and SOM play a key role in crafting a solid go-to-market strategy, and can influence the overall business plan.
They help fine-tune marketing and sales strategies, set realistic revenue goals, and determine which markets are worth your investment of time and resources.
While these metrics are deeply interconnected and don’t always have strict boundaries, their value lies in how they evolve alongside your brand, product lines, and customer needs.
Aspect
SOM
SAM
TAM
Scope
Realistically achievable market
Addressable market based on offerings
Entire market potential
Focus
Practical goals
Market fit for your business/products/services
Maximum opportunity
Purpose
Execution and forecasting
Targeting focus
Big-picture strategy
Serviceable Obtainable Market (SOM)
SOM is a smaller part of the SAM that your business can realistically capture within a certain period of time.
How much you are able to capture depends on factors like your competition, resources, and how effectively you can execute your tactics.
As the SOM is the smallest audience size in the framework, it is often overlooked as the bigger numbers and bigger audiences are more appealing – and look better on slide decks.
To enhance SEO for your SOM, start with in-depth market research to pinpoint your ideal customer profiles (ICPs) in this reachable group.
What are their habits?
What challenges do they face?
What terms are they searching for?
Use this insight to form content that speaks directly to them.
Develop a keyword strategy that includes niche-specific terms, and support it by publishing high-value content, optimizing for local search, and building authoritative backlinks.
The goal is to meet your customers where they are while creating meaningful engagement.
This is where you can also apply the Pareto Law as outlined by Byron Sharp in the book “How Brands Grow.”
In the book, Sharp cites that 60% of Coca-Cola sales come from just 20% of the buyer base. Their SOM is responsible for 60% of sales.
Serviceable Available Market (SAM)
Your SAM is an expansion on your SOM, and represents the slice of the TAM that’s feasible for your business to target, given its unique offerings and practical reach.
It narrows the TAM by focusing on customers who align with your specific product and logistical capabilities.
For an online sports shoe store, the SAM could be fitness enthusiasts and amateur athletes who shop online and live in areas where the company offers delivery and actively markets its products.
By refining your TAM into a SAM, you’re ensuring you prioritize the most realistic opportunities for your business.
This then translates into your SEO strategy, and helps you prioritize your content and digital PR focuses by working to reach these audience profiles.
Total Addressable Market (TAM)
The TAM is the largest market opportunity. It represents the total revenue your product or service could generate if you somehow captured 100% of the market.
TAM serves as the starting point for understanding the full scale of an opportunity, offering a broad perspective before you narrow things down.