TAM, SAM, SOM Explained: A Simple Framework for Market Sizing
Emily Sullivan is an experienced marketing professional with over a decade of expertise in content creation, communications, and digital strategy. She thrives on translating complex, technical subject matter into content that is approachable, insightful, and genuinely useful to marketing professionals navigating a fast-evolving landscape.
Every successful GTM strategy starts with knowing the size of your opportunity. It’s not enough to say your market potential is “huge” — you need a structured way to define it, communicate it to investors, and turn it into a realistic goal for growth. That’s where the TAM, SAM, SOM model comes in.
This framework breaks the total market into three levels of opportunity, helping companies connect big-picture vision with market reality.
What Is TAM, SAM, SOM?
TAM (Total Addressable Market):
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The entire market demand for your product or service if you had 100% market share.
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Shows the total number of potential customers globally or within a defined category.
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Use it to illustrate maximum market potential and attract potential investors.
SAM (Serviceable Available Market):
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The portion of TAM that fits your specific market, geography, or business model.
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Also called the served available market, it narrows TAM into a target market you can realistically reach.
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Guides marketing efforts and helps prioritize where to allocate spend.
SOM (Serviceable Obtainable Market):
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The slice of SAM you can actually win in the short term, based on market conditions, competition, and resources.
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Defines achievable market share and revenue targets.
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SOM is where ambition meets execution — the benchmark for your first phase of market penetration.
Why TAM, SAM, SOM Matters
Many startups and small businesses overinflate projections by only talking about TAM. But without SAM and SOM, you’re pitching ambition without a plan. This three-tier model gives:
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Investors: confidence that you’ve sized the market opportunity correctly.
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Marketers: clarity on where to focus campaigns and segmentation.
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Sales teams: achievable SOM targets tied to revenue forecasts.
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Executives: a tool for strategic planning that avoids chasing the wrong audience.
How to Calculate TAM, SAM, SOM
TAM Calculation
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Top-down approach: Start with analyst reports (Statista, Gartner) for the total available market TAM, then narrow by geography (e.g., North America, United States, or New York) and category.
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Bottom-up: Estimate potential customers × average spend × lifetime value.
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Value theory: Ask how much value your product unlocks if it reduces costs, improves productivity, or unlocks new demand.
SAM Calculation
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Narrow TAM into the specific market you can serve.
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Apply filters like geography, demographics, or market segmentation.
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Example: A B2B SaaS company may target only U.S.-based mid-market companies in specific industries.
SOM Calculation
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Grounded in market reality — what you can capture now.
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Consider competitor benchmarks, market saturation, and your sales model.
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Formula: Leads × conversion rate × ARPU = achievable revenue.
TAM SAM SOM Example
We have a marketing strategy case study where a bedding brand came to us before a product launch with inflated TAM numbers and vague customer personas. Their marketing efforts missed the mark, and investors questioned the assumptions.
By reframing with the TAM SAM SOM model:
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TAM: Defined the total addressable market for home goods.
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SAM: Narrowed to a specific market of e-commerce bedding buyers.
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SOM: Identified three high-value audience segments for near-term growth.
With a sharper focus, the brand messaging was refined, wasted ad spend was cut, and a bigger market opportunity was uncovered than expected — leading to a successful launch and sustained growth.
Best Practices for Using TAM, SAM, SOM in GTM Strategy
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Validate assumptions: Don’t rely on outdated reports — pair analyst data with surveys and real customer feedback.
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Revisit often: Market dynamics evolve quickly, especially in categories like B2B SaaS.
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Tie to execution: Use TAM for the vision, SAM for marketing strategy, and SOM for sales and revenue targets.
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Align teams: TAM excites investors, SAM directs the marketing team, and SOM grounds sales representatives in achievable KPIs.
fusepoint: From Market Sizing to Market Penetration
At fusepoint, we use TAM, SAM, SOM as more than pitch-deck numbers. Our experts combine market research, behavioral data, and proven inbound strategies to deliver valuable insights that support informed decisions. Then, we connect sizing with execution—tying market models into a phased GTM rollout that ensures opportunity turns into performance.
If you’re ready to size your market opportunity and build a comprehensive plan for a successful product launch, we’ll help you align strategy, sharpen focus, and capture the market share that fuels long-term success through our go-to-market strategy consulting.
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Emily Sullivan is an experienced marketing professional with over a decade of expertise in content creation, communications, and digital strategy. She thrives on translating complex, technical subject matter into content that is approachable, insightful, and genuinely useful to marketing professionals navigating a fast-evolving landscape.
