Total Addressable Market (TAM)

The theoretical maximum sales opportunity if you were to sell products/services to every customer, current and potential.

0

The theoretical maximum sales opportunity if you were to sell products/services to every customer, current and potential.

Total sales of all companies in your industry plus potential sales from any qualified customer who hasn't yet purchased in the category,

Use the following formula:

Total Industry Sales / TAM = Marketing Penetration or % Total Market Reached (Low number is good)

A lower number is good because it means there is lots of potential growth.

Then, take

[Company x] Total Industry Sales / Total Market Sales = Revenue Market Share (Low number is good)

Again, a low number here means you have lots of upside potential.

Your TAM Groups

  1. Qualified customers not buying anything
  2. Current loyal exclusive customers
  3. Customers buying from you and competitors
  4. Customers exclusively buying from competitors

Last updated: 2021/04/13