Total Addressable Market Calculator: AI-Powered TAM Analysis Framework
Market ResearchadvancedClaude 3.5 Sonnet or GPT-4o. Claude excels at structured analysis and multi-phase frameworks, handling the complexity of TAM calculations with clear reasoning. GPT-4o provides faster processing for large market datasets. Both can synthesize market data effectively, but Claude's superior reasoning makes it ideal for validating assumptions and identifying logical gaps in TAM logic.
When to Use This Prompt
Use this prompt when you need to build a credible TAM analysis for board presentations, investor pitches, or strategic planning. It's especially valuable when you're entering a new market, repositioning your product, or need to validate whether your growth targets are realistic relative to market opportunity.
The Prompt
You are a strategic market research analyst helping a B2B/B2C company calculate and validate their Total Addressable Market (TAM). Use a structured three-phase approach: insights → strategy → execution.
## PHASE 1: MARKET INSIGHTS
Analyze the market opportunity for [PRODUCT/SERVICE] targeting [TARGET CUSTOMER SEGMENT].
Provide:
1. **Market Definition**: Define the total addressable market by geography, industry vertical, company size, and use case
2. **Sizing Methodology**: Use at least two approaches:
- Top-down: Industry reports, analyst data, market growth rates
- Bottom-up: Addressable customer count × average contract value
3. **Market Drivers**: Identify 3-5 macro trends accelerating demand (digital transformation, regulatory changes, cost pressures, etc.)
4. **Competitive Landscape**: Map 4-6 direct and indirect competitors and their market share estimates
5. **Customer Pain Points**: List the primary business problems your solution solves and their financial impact
## PHASE 2: STRATEGIC POSITIONING
Translate insights into market strategy:
1. **Serviceable Addressable Market (SAM)**: Calculate the portion of TAM your company can realistically capture given product capabilities, go-to-market resources, and competitive positioning
2. **Serviceable Obtainable Market (SOM)**: Project realistic market capture for Year 1, Year 3, and Year 5 based on sales capacity, marketing reach, and customer acquisition costs
3. **Market Segmentation**: Identify your highest-potential customer segments by revenue opportunity and acquisition ease
4. **Growth Assumptions**: Document key assumptions about market growth rate, adoption curves, and competitive dynamics
## PHASE 3: EXECUTION FRAMEWORK
Provide actionable next steps:
1. **Validation Tactics**: Recommend 3-4 specific research activities to validate TAM assumptions (customer interviews, surveys, pilot programs)
2. **Risk Factors**: Identify 4-5 risks that could shrink TAM (market saturation, new competitors, regulatory changes, technology shifts)
3. **Monitoring Metrics**: Define quarterly KPIs to track actual vs. projected market opportunity
4. **Resource Implications**: Estimate sales, marketing, and product resources needed to capture your SOM target
## CONTEXT
Product/Service: [BRIEF DESCRIPTION]
Target Customer: [INDUSTRY, COMPANY SIZE, GEOGRAPHY]
Current Market Position: [STARTUP/GROWTH/MATURE]
Key Differentiator: [PRIMARY VALUE PROP]
Provide specific numbers, percentages, and dollar figures where possible. Use realistic market data and clearly flag assumptions. Format output with clear headers and bullet points for easy executive presentation.
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Tips for Best Results
- 1.Provide specific company/product context in brackets. Generic TAM analyses lack credibility—include your actual target customer profile, geography, and competitive positioning for more accurate calculations.
- 2.Request the AI to show its work on calculations. Ask for both top-down and bottom-up approaches, then ask it to explain why numbers converge or diverge. This surfaces hidden assumptions you can validate.
- 3.Use this prompt iteratively. Run it once for baseline TAM, then re-run with updated assumptions (e.g., 'What if we expand to SMB segment?' or 'What if churn is 10% instead of 5%?') to stress-test your strategy.
- 4.Cross-reference AI output against published analyst reports (Gartner, Forrester, IDC). Ask the AI to cite sources and flag where its estimates differ from industry benchmarks—this builds credibility for investor presentations.
Example Output
## TOTAL ADDRESSABLE MARKET ANALYSIS: AI-Powered Compliance Software for Mid-Market Financial Services
### PHASE 1: MARKET INSIGHTS
**Market Definition**
US mid-market financial services firms (100-5,000 employees) requiring regulatory compliance automation across AML, KYC, and transaction monitoring. Geographic focus: North America initially.
**Sizing Methodology**
- **Top-Down**: Global RegTech market valued at $8.2B (2024), growing 15% CAGR. Compliance automation represents 35% of RegTech spend = $2.87B addressable market
- **Bottom-Up**: ~12,000 mid-market financial institutions in North America × $150K-$400K average annual software spend = $1.8B-$4.8B TAM
- **Convergence**: Conservative estimate = $2.5B TAM
**Market Drivers**
1. Regulatory complexity: 47% increase in compliance violations (2022-2024)
2. Labor shortage: Compliance analyst salaries up 22% YoY
3. Digital transformation: 68% of financial institutions prioritizing automation
4. Fraud sophistication: Transaction volumes up 35% post-pandemic
**Competitive Landscape**
- Tier 1: Salesforce (Financial Services Cloud), Oracle, IBM – 40% combined share
- Tier 2: Nymbus, Actimize, FICO – 25% share
- Tier 3: Emerging players (your potential position) – 35% fragmented share
**Customer Pain Points**
- Manual compliance processes cost $2M-$5M annually per institution
- False positive rates in transaction monitoring: 85-95% (creates analyst burnout)
- Regulatory fines averaging $1.2M per violation
### PHASE 2: STRATEGIC POSITIONING
**Serviceable Addressable Market (SAM)**: $650M
Focusing on transaction monitoring for banks with $5B-$50B in assets (1,200 institutions), where your AI-native approach provides 40% cost advantage.
**Serviceable Obtainable Market (SOM)**
- Year 1: $8M (12 customers × $650K ACV)
- Year 3: $45M (65 customers × $690K ACV)
- Year 5: $120M (170 customers × $710K ACV)
**Top Customer Segments**
1. Regional banks (highest pain, fastest buying cycle) – 45% of opportunity
2. Credit unions (cost-sensitive, high compliance burden) – 35% of opportunity
3. Fintech platforms (scaling rapidly, need automation) – 20% of opportunity
**Key Assumptions**
- 15% annual market growth
- 18-month sales cycle
- 85% net retention rate
- 25% CAC payback period
### PHASE 3: EXECUTION FRAMEWORK
**Validation Tactics**
1. Conduct 20 customer discovery interviews with compliance officers (target: confirm $2M-$5M pain point quantification)
2. Run pilot program with 2-3 regional banks (3-month, limited scope)
3. Commission independent analyst report on ROI vs. legacy solutions
4. Survey 100+ compliance professionals on feature priorities
**Risk Factors**
1. Regulatory changes could reduce compliance automation demand (15% probability)
2. Tier 1 vendors could bundle compliance features (40% probability, medium impact)
3. Market consolidation could reduce addressable customer count (25% probability)
4. AI model accuracy concerns could slow adoption (30% probability)
**Monitoring Metrics (Quarterly)**
- Win rate vs. Tier 1 competitors
- Average contract value trend
- Customer acquisition cost vs. projection
- Market share in target segments
**Resource Requirements**
- Sales team: 8-10 enterprise AEs (Year 1), scaling to 25 by Year 3
- Marketing budget: $1.2M annually for thought leadership and demand gen
- Product: 2 compliance domain experts + 4 engineers for regulatory updates
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Courses, workshops, frameworks, daily intelligence, and 6 proprietary tools — built for marketing leaders adopting AI.
Trusted by 10,000+ Directors and CMOs.