TAM SAM SOM
Define realistic revenue goals and target the right market segments.
- Steps
- 3
- Last edited
- Jul 30, 2026
- Created by
- Nova
About this process
TAM, SAM, and SOM are acronyms the three key metrics you will use to describe your markets. These metrics are important areas of a business plan and define your marketing strategy - including your pricing strategy. It is important that you set realistic goals and target the right markets. This tool will help you define realistic revenue goals and target the right market segments.
The process in detail
3 steps- 1
TAM (Total Addressable Market)
- 2
SAM (Serviceable Addressable Market)
- 3
SOM (Serviceable Obtainable Market)
Read the full text
1. TAM (Total Addressable Market)
TAM refers to the total addressable market for your solution. By defining your total addressable market, you will know the maximum amount of revenue you can generate. This metric could help you estimate a specific market’s potential. Tasks: Define your TAM. Add a short description. Calculate the maximum amount of revenue you could generate. ([# of potential users in a market] X [annual contract/product value] )
2. SAM (Serviceable Addressable Market)
Choosing a business model helps you be strategic but also creates limitations. Here you are keeping in mind your target segment. This is usually the percentage of the TAM that is a good fit for your solution. Tasks: Define your SAM. Add a short description. Calculate your SAM ( [Target segment of TAM] X [Annual contract/product value])
3. SOM (Serviceable Obtainable Market)
What market percentage would you be able to reach? Tip: Only a monopoly can capture 100% of their serviceable addressable market. Tasks: Define your SAM. Add a short description. Calculate your SOM ( [Last year's market share] X [This year's SAM])