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.
In the sports shoe example, the TAM could include everyone in the world who buys sports shoes, whether they shop online or in-store.
This overall market might include professional athletes, casual gym-goers, and even occasional joggers, spanning all sales channels like ecommerce sites, retail stores, and third-party marketplaces.
You then also have the fashion and collector markets, who see sports shoes as casual everyday wear or as a monetary investment.
While TAM is more theoretical, it sets the foundation for evaluating the overall potential of your industry.
TAM Vs. SEO TAM
“TAM” represents the total revenue potential if a company captures 100% of its market. “SEO TAM” narrows this to the revenue achievable by reaching all potential customers through search engines.
It represents the potential revenue attainable by engaging all customers who could discover your product via search engines, where their intent aligns with the value of your content or product/service.
I wrote an article exploring the SEO TAM more here.
The TAM Trap
The alignment of your value proposition to what the user is looking for is important, even more so now than ever.
The “TAM trap” in calculating your potential SEO market happens when you assume that everyone who searches a specific keyword shares the same intent.
Keywords can have multiple interpretations; some you would class as having multiple common interpretations, some more dominant interpretations, and others potentially lesser common interpretations.
A number of factors can influence these interpretations, including time of the year and the searcher’s location.
Some common examples involve brands, such as Jaguar: Are people searching for the car, the animal, or the sports team?
A less common example I’ve experienced was a variation of the term “WAF.”
The dominant interpretation of this search term (globally) is Web Application Firewall, but our rank trackers picked up that on Texas IPs, for around a month, Google alternated between our CDN client and the World Apostolate of Fatima church.
This was around the time of a religious festival, so, for a short time, the most prominent interpretation of the queries in that locale changed to users wanting details for the church. This impacted our WAF rankings from the top three to lower page one.
After the two-week period, when the change in demand subsided, the SERP “reset” to reflect the regular interpretations.
This is important to note, as just classifying queries by intent isn’t always enough when estimating audience size – especially when big marquee head terms are involved – as not all 10,000 searches of the query will come from users with the same interpretation, same prior knowledge levels, or same end-intent.
More Resources:
Featured Image: Gorodenkoff/Shutterstock
