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Addressable Market versus Attainable Market

Posted on Oct 25, 2013 by in Sales and Marketing | 0 comments

Addressable market is a word that is often used to ask a simple question: who is your ideal client profile (ICP) and how are you going to go get them?  Many executives discuss total addressable market or TAM, and this structure has become very common place within the hallways of marketing departments, sales organizations, and board rooms.  It is also found its way clearly into the entrepreneurial eco-system, even though most startups are terrible at it, the idea is to focus in on a customer problem and perform “customer discovery” around an opportunity.  Simply stated, freaking call them and talk to them.  Good advice right, yes and no.

TAM-SAM-Market

I found an interesting read, actually from an Atlanta-company, I don’t know them (GeoStrategy Partners):

– “demand determinant market” or the market of overall demand that will dictate the size of the “addressable” target market

– Within the addressable market, we then need to be realistic about where our client can realistically compete today in terms of existing capabilities and capacity

– Finally, we get to a full competitive analysis to estimate the market share that can be captured in the near term or the “winnable” market opportunity

The “addressable market” is further defined by gaining perspective on market size and potential through the eyes of customers and competitors and suppliers of adjacent product and solutions. It is also calibrated by looking at alternative as well as substitute solutions. When this process if fully vetted, we can say we have defined the “addressable” market or the total market opportunity for our company.

This whole post is really running through my mind as I look at the broader marketing technology space.  As I have shared before I continue to be amazed at how many people are chasing email, social, mobile, web, and the various flavors of marketing automation.  Is the market that big?  Maybe, I haven’t really ever done the detailed work that this post talks about – however – I know this – technology has forever changed the marketing landscape.  I have started playing with this model and thinking about “attainable market” not “addressable market”.  What part of the market for any given company can they get?  Is that attainable market?  Does attainable market take into account a broader set of ideas: competition, demand, velocity, execution capability, as well as capital?

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