Why You Need To Calculate TAM Before Starting ABM

TAM, Total Addressable Mark, and ABM, Account-Based Marketing, are both complex aspects of marketing and sales. If you are using an ABM funnel approach to single out your best targets, you also need to understand the full board of options you have.

Without fully understanding your market, you can’t figure out the best accounts. If you’ve been struggling to see ABM results, reevaluating your TAM could be a helpful option.

Let us look more in-depth into these terms and their interconnection.

TAM

Total addressable market refers to the maximum market reach that a potential product/ service can have. For example, with a webinar tool, the TAM may be all companies doing online presentations. But it is not possible for any business, even for the largest transnational corporations, to capture their entire TAM.

Using TAM as a starting point, companies can make more nuanced calculations of the market potential of any business.

ABM

An account-based marketing strategy provides a precise approach to targeting customers. In an ABM funnel, a company identifies its ideal customer profile within its TAM and then runs targeted outreach for these accounts. The ABM audience is a more practical and realistic view of a company’s growth potential.

TAM before ABM

But what is the need to calculate TAM at all then? TAM is the starting point of all market research for any commercial proof of concept.
TAM helps business owners understand if their business has commercial feasibility. A company cannot function if only a handful of people use the product produced by the company. The cost of production and the available market must be commensurate with each other.

TAM is also the first step to convincing initial investors to put their funds into developing a product/service. It proves that there is a market demand for the solution that the company aims to supply.

TAM is also essential for the calculation of an ABM audience. A company cannot decide its ideal customers without understanding who uses its products, i.e., its total addressable market. Demographic data, Buyer Intent data, technographic data, and the company’s lead generation should be used to identify the ABM targets and expectations.

Access 95% accurate human-verified data to find your ideal target companies and decision-makers to close more deals.

Application of the ABM funnel

When using ABM, once you’ve identified your target customers, you need to attract their attention. This can be done through sales outreach and marketing campaigns. The ABM funnel can also be categorized into separate segments. A popular strategy is to use segregated email lists for different types of customers. These lists can be created based on differences in product interests, age, gender, buying behavior, etc.

By using segmentation, you can personalize the outreach and address specific problems for different prospects. This level of personalization requires an automated CRM and marketing system. Once the lead data is inserted into the company’s CRM, leads can be sorted into the appropriate segments and added to the necessary campaigns.

Another crucial aspect to keep in mind while devising an ABM strategy is studying Buyer Intent data. Buyer Intent data shows how much recent interest an account has shown in topics relevant to your product and shows their likelihood of wanting to buy. Intent data helps with lead scoring so that different accounts can be classified according to their progress in the buying journey.

Leads that have progressed further in their buying journey should be prioritized for sales to ensure faster-assured conversions.
SalesIntel helps identify accounts with high buying intent based on topics related to your offering and helps prioritize hot leads in real-time.

Data requirements for TAM and ABM

Account-based marketing begins by first conducting a TAM analysis of the business and then refining that market to find the customers who could be potentially interested in a particular companies product/service.

For the account-based marketing system to work, it requires a huge amount of prospect targeting data. Unlike TAM, which only requires quantitative data for broad estimates, the data required for ABM is more specific.
Account-based marketing requires having contact data and other analytics for people who show interest in the company’s products or fit into the ideal customer profile of that company.

A simple method of generating these contact details is through information collected through direct research on the company. But finding accurate, detailed information is difficult and time-consuming. Finding a data provider can save time and money and help your ABM campaigns find success.
At SalesIntel, we have over 1400 human researchers who regularly review and update our contact data every 90 days to maintain our 95% accuracy.

Using TAM and ABM together

TAM is essential to extrapolate the ABM audience. Your target audience’s importance in improving sales, marketing, and CRM is self-evident. But the ABM subsection of your TAM audience also plays a significant role in assessing the overall performance of a company.

A comparison between a company’s estimated ABM audience with TAM and actual active ABM results can show how much of your ideal market you have been able to capture. If there is a huge difference between the two figures, you need to reassess your lead generation strategies.

The ABM success of a company is also important for investors. TAM is the starting point for making an investor pitch deck to get investment in a project and procure funds for product/service development But a company that needs funds to grow will have to show investors its progress in reaching the full estimated ABM audience. Investors will be able to calculate the number of funds needed to fully reach the estimated target market and the profit margins that they can expect from that investment.

The last few decades have proven to the business world that the focus of data is here to stay. No decision can be taken without proper data. There and now many advanced data analytics tools and services are also available in the market.
If you are looking for a good market research style that can help your company beat competitors, then an ABM funnel approach is your best friend, and your TAM analysis can help guarantee you’re looking over all your options.

Use SalesIntel, the best data source for accurate B2B lead generation, so that your conversion rates can reflect the time and effort put in by your team.