Serviceable Addressable Market (SAM)
The portion of the total market that your company can realistically reach and serve with your current products, distribution channels, and capabilities. It's smaller than the total market but larger than your current customer base—essentially, your realistic growth ceiling.
Full Explanation
Think of market opportunity like concentric circles. The outermost circle is the total addressable market (TAM)—every possible customer who might need what you sell. But not all of them are reachable by you. SAM is the middle circle: the segment you can actually serve given your geography, sales channels, product capabilities, and go-to-market strategy.
Here's a marketing analogy: If you sell premium B2B marketing software, your TAM might be "all companies that use marketing." But your SAM is narrower—perhaps "mid-market companies with 100-1,000 employees in North America using cloud-based tools." You've excluded enterprise (they need custom solutions), SMBs (they can't afford your price), and international markets (you lack local support).
In AI marketing specifically, SAM matters because it shapes how you evaluate AI tool vendors. A vendor claiming they serve a $100B TAM might only have a $2B SAM if they lack integrations with your martech stack, don't support your industry, or require technical expertise your team doesn't have. When evaluating AI platforms, you're really asking: "What's the SAM for this tool within our organization?"
For budget planning, SAM determines realistic revenue projections and helps you avoid overpaying for vendors with capabilities outside your serviceable market. If a vendor's roadmap focuses on features for a segment you can't reach, their SAM for you is smaller than their marketing suggests. This directly impacts ROI calculations and contract negotiations—you should only pay for the market you can actually serve.
Why It Matters
SAM is critical for AI tool ROI analysis and vendor selection. When evaluating an AI marketing platform, vendors often cite massive TAM figures, but what matters is whether their capabilities align with your serviceable market. A platform optimized for enterprise might be overkill (and overpriced) if your SAM is mid-market. Conversely, a tool built for SMBs won't scale if your SAM includes enterprise accounts.
Budget implications are significant: misunderstanding SAM leads to overspending on vendor capabilities you'll never use or underspending on tools that could dominate your actual market. When negotiating contracts, SAM clarity helps you push back on pricing—if a vendor's feature set targets a segment outside your serviceable market, you have leverage to negotiate lower rates. Competitive advantage comes from vendors who deeply understand your SAM and build specifically for it, rather than selling a one-size-fits-all platform.
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Related Terms
Customer Acquisition Cost (CAC)
The total amount of money you spend to acquire one new customer, including marketing, sales, and overhead costs. It's calculated by dividing your total acquisition spending by the number of new customers gained in a period. CMOs need to track this because it directly determines whether your marketing investments are profitable.
Total Addressable Market (TAM)
The total revenue opportunity available if a product or service captured 100% of a specific market. For marketers, it's the ceiling on how big your potential customer base could be. Understanding TAM helps you set realistic growth targets and justify marketing budgets.
Serviceable Obtainable Market (SOM)
The realistic slice of your total addressable market that you can actually capture with your current resources, team, and go-to-market strategy. It's the honest answer to 'how much revenue can we really win in the next 3-5 years?'
Go-to-Market Strategy (GTM)
Your plan for how you'll launch, position, and sell a product or service to customers. It covers who you're targeting, how you'll reach them, what message you'll use, and how you'll price it. For AI tools, a strong GTM determines whether your investment actually drives adoption and revenue.
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