Serviceable Addressable Market (SAM)
Serviceable addressable market (SAM) is the part of the total addressable market that a company can actually serve with its current product, pricing, geography and sales channels.
Also called: SAM, serviceable available market
Why it matters
SAM narrows the market to the customers the business can realistically reach and support today, which makes it a better basis for targets, territory plans and hiring. It also shows how much the market could grow if the company added a region, language or product.
SAM sits between two other figures. Total addressable market (TAM) is the whole market for the type of product. Serviceable obtainable market (SOM) is the share of SAM the company can expect to win in the near term, given competition and its own capacity. A bottom-up SAM is often built by applying the company's real limits to an account list.
Example
A company sells scheduling software to dental clinic groups. Its TAM covers 4,000 groups in the US. Its product only supports English and integrates with two practice systems used by 2,500 of those groups, so its SAM is 2,500 groups. With its current sales team, it expects to win 150 of them in the next two years, its SOM.
Questions people ask
What is the difference between addressable market and serviceable market?
The addressable market (TAM) is everyone who could use this type of product. The serviceable market (SAM) is the part of it your company can actually serve today, given your product, pricing, geography and channels.
How is SAM calculated from TAM?
Start from TAM and remove the customers you cannot serve today: regions you do not sell in, segments your product does not support, languages or integrations you lack, and price points outside your model. What remains is SAM. Bottom-up, it is the count of serviceable accounts multiplied by expected annual contract value.
Can TAM and Sam be the same?
In theory, if a company can serve every customer in its market, but it is rare. A company with limits on geography, segment, language, integrations or price has a SAM smaller than its TAM.
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