Serviceable Available Market
What is serviceable available market (SAM)?
Serviceable available market definition
Serviceable available market (SAM), sometimes called “serviceable addressable market,” refers to the portion of the total addressable market (TAM) that a company can realistically capture with its present business model. The SAM is the full size of your target audience, including its potential revenue.
For virtually every company, it’s impossible to claim the TAM — you would never be serving every conceivable location with no competition. But calculating SAM can help you understand the audience available for your product, its size, and how you could grow it in the future.
SAM vs. TAM vs. SOM
Companies need to know the difference between SAM, TAM, and SOM for effective market analysis and strategy planning. Here’s what each one means:
SAM (serviceable available market) - The portion of the market you can acquire based on your current business model (otherwise known as your targets.)
TAM (total addressable market) - The total market for your product. TAM represents full growth potential, which can help you plan for future expansion.
SOM (serviceable obtainable market) - The percentage of the SAM you can realistically capture. Calculating SOM can prove valuable when defining goals for short-term growth.
How to do the SAM calculation
There’s a straightforward formula to follow when calculating SAM:
SAM = target segment of your TAM X annual value per customer
Ultimately, the serviceable available market is the percentage of the TAM that suits the products specified in your business model.
SAM examples in product management
One example of SAM in product management would be if your company developed a platform that allowed businesses to boost their productivity to unprecedented levels and generate more revenue than ever. But regulations may prevent you from offering it outside of your current country.
In that case, while the TAM might apply to millions of businesses worldwide, your SAM would represent the companies in your country that would likely use your platform.
Another example would be if you ran a local offline business that provided bespoke games unavailable elsewhere, installed directly onto a customer’s computer. If you were the only company in town offering this service, you could easily calculate your SAM.
General FAQ
Glossary categories
Experience the new way of doing product management
Experience the new way of doing product management