When launching a new product/company or seek additional fundingforecasting against your TAM (total target market) is a key component.
TAM is a key part user acquisition The strategy is the same as your SEO campaign.
It helps you prioritize optimization campaigns and predict traffic potential based on a pre-determined set of keywords.
Your total addressable market is different from your total addressable market because your total addressable market is your greatest potential opportunity if there is no competing or alternative product with a different USP (Unique Selling Proposition).
Your TAM is only a small part of this market, but Roles and Potential Users Their needs are closer to your product/service.
What is the Total Addressable Market (TAM) formula?
The defining formula for calculating TAM (in the general business sense) is:
Addressable Market x Competitive Position = TAM
Your addressable market is the number of potential users, eg the number of global email users is estimated to be around 4.03 billion, but if your competitive position is only catering to US users, your TAM is around 250 million.
Your TAM is also affected by users of adjacent products.
For example, let’s say you are an online service focused on user privacy as a core USP.
In this case, users of other privacy-focused products such as brave (browser) and Duck Duck Go May fall into your overall TAM.
However, when we look at our SEO TAM, we can use existing tools and data to estimate our total TAM and then break it down by potential user needs (matching your personas).
Build your TAM
For me, building your SEO TAM is a three-step process:
- Comprehensive identification and identification of product USP and capabilities (current and forecast).
- Comprehensive Keyword Research around your product/service/product.
- Traffic Estimation (Click on Curve and Opportunity Gap Analysis).
As a first step, you can do this by meeting with product owners and managers and asking them about product details, features, features, and a product roadmap.
This information can then be used to inform your keyword research create better contentbut also a more efficient user experience.
It allows users to more accurately predict their experience with a product, thereby reducing churn and redundancies in the pipeline of unqualified leads.
As a rule of thumb, these meetings can also help identify some potential angles and information that may be contained in content that competitors overlook.
The second step is to execute Comprehensive Keyword Research and classification. In addition to categorizing by intent, this is also a good opportunity to categorize by funnel stage.
The third step, create Traffic Estimation – You can do this through keyword research, the current ranking position of the target website (if any), and whether the keyword’s SERPs (Search Engine Results Pages) include SERP features.
To demonstrate the process, I’ll use the Narmi company as an example (using publicly available data through an SEO tool).
The Narmi website currently ranks for about 800 keywords in the US and is based on Estimated SERP CTR Data terms generate about 500 sessions per month.
If the domain ranks first for all 800 search terms, the potential total organic traffic is around 81,000.
Now, this is getting the original dataset. To get a more realistic TAM estimate, you also need:
- Add other search terms that you don’t currently rank for but would like to rank for.
- Remove irrelevant search terms from the dataset, such as your 81st rank random brand because you mentioned it once in a blog post.
Ranking #1 for all potential search terms is unrealistic.
But using your data, you can create a stepped method that shows what improvements could be made if things were 10% better, 20% better, and so on.
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Screenshot by author, June 2022
From this, you can show other stakeholders and potential investors what improvements are needed to achieve a specific organic traffic goal, and then link the effort value to the required resources.
Leverage your TAM
In addition to traffic forecasting, your TAM data can be further used to forecast leads and deals.
prospect forecast
For most SaaS and lead generation Model companies, pipelines are the most important metrics pointed to by most C-levels and other stakeholders.
This can be calculated in a similar way to potential traffic opportunities and can be modeled using your existing lead data.
Using Narmi estimates, and assuming they are currently getting 11 SQLs per month (sales qualified leads), we can simulate that each SQL will require an average of 38 sessions.
Based on this conversion rate, lead generation opportunities for the keyword set are estimated at 2,116 per month.
Again, this is modeled on a 100% first position ranking, but like traffic estimation, we can model it in terms of incremental performance gains:
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Screenshot by author, June 2022
This can be extended further if the forecasted number of leads is multiplied by the lead value and used to forecast the long term based on the following factors Churn rate and lifetime value (Lifetime Value).
This can also identify if there are retention issues.
If the pipeline shows enough free trial signups, but not enough conversions to paying users, the focus can turn to product or customer service/SDR (Sales Development Representative) and possibly find on-site content and product information.
Transaction forecast
If you’re an e-commerce store, then you can make a similar forecast for the number of transactions and total revenue you’re likely to get (based on your current or forecast AOV).
If your data fluctuates highly seasonally or due to the nature of the products you sell, you can segment it by product category or even seasonal category and mix forecasts together.
Likewise, you can compare your total organic deals and potential revenue figures with incremental gains:
Screenshot by author, June 2022For example, are current user journeys and website conversion rates sufficient to generate the leads/deals needed to generate ROI (return on investment) and growth?
Anticipating existing deals or prospects can help identify opportunities and problems that might not otherwise be exposed until they are missed or experienced.
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Featured image: as-artmedia/Shutterstock
