How To Calculate Your Total Addressable Market (TAM) For SEO via @sejournal, @TaylorDanRW

When launching a caller product/company oregon pitching for further funding, forecasting against your TAM (total addressable market) is simply a cardinal component.

The TAM is simply a cardinal portion of a user acquisition strategy and your SEO run alike.

It tin assistance you prioritize optimization activities and forecast postulation imaginable based connected your pre-determined keyword sets.

Your full addressable marketplace differs from your full market, arsenic your full marketplace is your maximum imaginable accidental if nary contention oregon alternate products with differing USPs (unique selling proposition) exist.

Your TAM is simply a fraction of this marketplace but is much intimately tied to your personas and imaginable users whose needs are much intimately aligned with your product/service.

What Is The Total Addressable Market (TAM) Formula?

The defined look for calculating your TAM (in a wide concern sense) is:

Potential Market x Competitive Position = TAM

Your imaginable marketplace is the fig of imaginable users, e.g. the fig of email users successful the satellite is estimated to beryllium astir 4.03bn, but if your competitory presumption is to cater to U.S. users only, your TAM is astir 250 million.

Your TAM tin besides beryllium influenced by users who usage adjacent products.

For example, accidental you’re an online work that focuses connected idiosyncratic privateness arsenic a halfway USP.

In that case, users of different privacy-focused products specified arsenic Brave (browser) and DuckDuckGo whitethorn autumn into your wide TAM.

When we look astatine our SEO TAM, however, we tin usage existing tools and information to make estimations of our full TAM and past interruption it down by imaginable idiosyncratic needs (matching your personas).

Establishing Your TAM

Establishing your SEO TAM, for me, is simply a three-step process:

• Fully place and place merchandise USPs and capabilities (current, and forecast).
• Comprehensive keyword research astir your product/service/offering.
• Traffic estimations (click curves and accidental spread analysis).

For the archetypal step, you tin execute this by gathering with merchandise owners and managers, and asking them astir merchandise details, functionality, features, and the merchandise roadmap.

This accusation tin past beryllium utilized to pass your keyword probe to create amended content, but besides a much valid idiosyncratic experience.

It allows the idiosyncratic to forecast their acquisition of the merchandise much accurately, reducing some churn and redundancy successful the pipeline of unqualified leads.

From experience, these meetings tin besides assistance place immoderate imaginable angles and messaging that tin beryllium included successful contented that competitors overlook.

The 2nd measurement is to execute comprehensive keyword research and categorization. As good arsenic categorizing by intent, this is besides a bully accidental to categorize by funnel stage.

The 3rd measurement is to make traffic estimations – and you tin bash this from your keyword research, the existent ranking positions of your people website (if any), and whether oregon not the SERPs (search motor results pages) for the keywords incorporate SERP features.

To amusement this process, I’m going to usage the institution Narmi arsenic an illustration (using publically disposable information done SEO tools).

The Narmi website presently ranks for astir 800 keywords successful the U.S. and based connected estimated SERP CTR information the presumption are producing astir 500 sessions a month.

If the domain ranked successful presumption 1 for each 800 hunt terms, the full imaginable integrated postulation is astir 81,000.

Now, this is taking the earthy information set. To get a much realistic TAM estimation, you volition besides request to:

• Add successful further hunt presumption that you don’t presently fertile for, but privation to.
• Remove irrelevant hunt presumption from the information set, e.g. random brands you fertile successful presumption 81 for that person been picked up due to the fact that you mentioned them erstwhile successful a blog post.

Ranking for presumption 1 for each imaginable hunt presumption isn’t realistic.

But with your data, you tin make a stepped attack to amusement what improvements tin beryllium made if things were 10% better, 20% better, and truthful on.

From this, you tin show to different stakeholders and imaginable investors what betterment is required to deed circumstantial integrated postulation goals – and past necktie effort values backmost to resources required.

Utilizing Your TAM

As good arsenic postulation forecasting, your TAM information tin beryllium utilized further to forecast leads and transactions.

Lead Forecasting

For astir SaaS and lead generation exemplary companies, the pipeline is the astir important metric that the bulk of C-level and different stakeholders constituent to.

This tin beryllium calculated successful a akin manner to the imaginable postulation accidental and tin beryllium modeled utilizing your existing pb data.

Using the Narmi estimations, and assuming they presently get 11 SQLs (sales qualified leads) each month, we tin exemplary that it takes connected mean 38 sessions for each SQL.

Based connected that conversion rate, the imaginable pb accidental connected the keyword acceptable is estimated to beryllium 2,116 a month.

Again, this is modeled astatine 100% archetypal presumption ranking, but similar with postulation estimations we tin exemplary this based connected incremental show increase:

This tin beryllium expanded further if the forecasted pb fig is multiplied against the pb worth and utilized to forecast longer-term based connected churn rates and LTV (lifetime value).

This tin besides place if determination are retention issues.

If the pipeline is showing capable numbers for the escaped proceedings sign-up, but past not capable are converting to paid users, past absorption tin beryllium turned to either product, oregon lawsuit service/SDRs (sales improvement representatives), and imaginable uncover issues with onsite contented and merchandise messaging.

Transaction Forecasting

If you’re an ecommerce store past you tin bash akin forecasting for the fig of transactions you whitethorn attain, and full gross (based connected your existent oregon forecast AOV).

If your information fluctuates a batch seasonally oregon owed to the quality of the products you sell, you tin interruption this down by a merchandise category, oregon adjacent a seasonal class and blend the forecasts together.

Again, you tin comparison your full integrated transaction and gross imaginable information to incremental gains:

Screenshot taken by author, June 2022

For example, is the existent idiosyncratic travel and tract conversion complaint capable to make the leads/transactions required to make an ROI (return connected investment) and growth?

Forecasting transactions oregon leads connected existing tin assistance successful identifying some opportunities and problems that different whitethorn not travel to airy until they are either missed oregon being experienced.

More resources:

• How to Calculate the ROI of Influencer Marketing Campaigns
• State of SEO Client Insights: Budgets, Traffic & SEO Tactics
• SEO Strategy: A Full Year Blueprint (+Template)

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