Framework library
TAM, SAM and SOM
How to use it
Estimate total relevant demand, the portion your model can serve, and the share realistically obtainable within a stated period. Reconcile top-down and bottom-up estimates.
Worked example
Count industrial buyers and annual orders, then restrict to reachable service windows and stock availability.
Common pitfall
Avoid arbitrary share percentages. Derive the obtainable estimate from reach, conversion and capacity.
- Frame the questionWhich part of the growth forecast depends on behaviour the business has yet to observe?
- Apply the frameworkUse TAM, SAM and SOM on the worked example above.
- Produce an answerBuild a reach, conversion and capacity estimate. State which factor you would verify first.