Have you ever heard that if a company isn’t growing, it’s dying? Every business wants to achieve maximum results, but it’s necessary to measure the opportunities and direct the necessary Digital Marketing efforts — to do this, it’s worth knowing what TAM, SAM and SOM are !
These three concepts relate to the size of the market available to a business and what the potential opportunities are. By understanding greece telegram data them, you have the chance to draw up a more effective plan to increase market share .
So here I will show you how to find your company’s real market using TAM, SAM and SOM as a tool. Follow along!
What is TAM, SAM and SOM
When thinking about your company’s performance capacity, it is essential to know these three acronyms: TAM, SAM and SOM. With them, you have a clear idea of your potential to generate results and how you can use the special strategies should be built.
Total Addressable Market (TAM)
Total Addressable Market, TAM or Total Market is a concept that refers to the entire market demand for a product or service . In practice, it allows you to identify how much revenue a company can generate from its product or service.
In an analogy, it is as if the TAM represented all the fish available in a river. Fishing all the available fish, therefore, would be the equivalent of reaching the entire TAM.
To calculate TAM, you need to think about the total number of potential customers , disregarding any barriers, such as competitors or geographic limits.
In general, TAM is important business sale lead for projecting potential growth of the company . It indicates the maximum that your business can achieve, considering the existing demand.
Tip: From attraction to loyalty: examples of Inbound Marketing
Serviceable Available Market (SAM)
The Service Available Market, SAM or Addressable Market, indicates the entire market share that the business has the potential to reach over time . It is a fraction of the total market, as it takes into account some of the company’s limitations, whether geographic or specialization.
In the previous analogy, it makes sense to say that there is no way a small boat can catch all the fish in a river or lake, right? Therefore, SAM represents the amount of fish you could catch, considering issues such as your net and the space on the boat.
So, to reach this value, it is also necessary to consider the limitations and characteristics of the business, such as location, resources and distribution channels .
It is also worth knowing that SAM is very important for strategic planning because, from it, it is possible to define realistic growth goals and direct resources and efforts to achieve a specific part of the business.