Do you know your TAM and SAM?

TAM stands for Total Addressable Market. It refers to the entire revenue opportunity available for your product or service. Imagine it as the total size of the pie if you were the only company selling that product or service.

TAM helps businesses understand the overall potential of a market and is often used to make decisions about resource allocation and investment. It’s important to remember TAM is a theoretical maximum, and most companies will only be able to capture a portion of it (known as SAM – Serviceable Available Market).

How to use Google’s keyword research as a starting point for estimating your TAM. Here’s how:

  1. Identify relevant keywords for your product/service.
  2. Use a tool like Google Keyword Planner to estimate their average monthly search volume.
  3. Consider conversion rates: How many searchers would actually become customers? This is a complex metric, but industry benchmarks or educated guesses can help.
  4. Adjust for duplicates: Some users might search multiple variations of the same keyword. You might need to de-duplicate your search volume data.

At Mills, we practice this all the time. Feel free to contact us for a thorough TAM and SAM research 🙂