Total addressable market

Total addressable market (TAM), also called total available market, is a term that is typically used to reference the revenue opportunity available for a product or service. TAM helps to prioritize business opportunities by serving as a quick metric of the underlying potential of a given opportunity.

One approach is to estimate how much of the market you can gain if there were no competitors. A more encompassing variation is to estimate the market size that could theoretically be served with a specific product or service. TAM can be defined as a global total (even if a specific company could not reach some of it) or, more commonly, as a market that one specific company could serve (within realistic expansion scenarios). This focuses strategic marketing and sales efforts and addresses actual customer needs. Including competition and distribution issues then modifies frames the strategy with realistic boundaries and allows to gauge served market share (SAM), the percentage of the market that is already being served (either by that company or all providers).

See also

• Serviceable available market