seo

How To Calculate Your Total Addressable Market (TAM) For SEO

Total addressable market (TAM) projection is essential when introducing a new product/service or seeking more finance.
The TAM plays an essential role in your user acquisition strategy and SEO effort. Using your collection of keywords as a basis may help you prioritize optimization efforts and predict traffic possibilities.

Your entire market is the most significant opportunity if there is no competition or if there are no other items with a different USP (unique selling proposition).

Your Target Account Market (TAM) is a subset of this total market, consisting of customers whose demands are a good fit for your product or service.

How Is The TAM Calculated?

To determine your TAM (from a business perspective), use the following formula:

Market Size x Industry Share / Total Available Market Size

For example, the total addressable market (TAM) for email services worldwide is 4.03 billion people, but if your company’s competitive advantage is solely serving customers in the United States, your TAM is only around 250 million.

The customers who buy your complimentary items may also shape your TAM. For the sake of argument, assume that you own an online business whose main selling point is its commitment to user anonymity.

Potential customers may include those who use Brave (browser) or DuckDuckGo (search engine) because of their emphasis on privacy.

However, when we examine our SEO TAM, we may make estimates of our whole TAM using current methods and data and then divide it down further by likely user demands (matching your personas).

Creating a Target Audience Machine

I recommend the following three-step method for identifying your SEO TAM:

  • Clearly define the product’s unique selling proposition (USP) and distinguishing features (current and forecast).
  • It would help if you did an in-depth keyword analysis for your product, service, or offer.
  • Forecasts of Traffic Flow (click curves and opportunity gap analysis).

Start by meeting with product owners and managers to inquire about the product’s specifications, features, and development plans.

To improve your content and the quality of your users’ experience, you may utilize this data to guide your keyword research.

The user can more precisely anticipate their experience with the product, which decreases churn and eliminates unnecessary repetition in the pipeline of unqualified leads.

Meetings like this have the added benefit of shedding light on content-related opportunities that rivals may be missing.

Step two entails organizing your findings from step one’s keyword research. This is a great chance to not only classify by goal but also by funnel stage.

Third, you’ll need to estimate how many people will visit your site using a combination of your keyword research, where your target website already ranks (if at all), and whether or not those keywords have unique attributes in the SERPs.

I will use the firm Narmi to illustrate this procedure (using publicly available data through SEO tools).

On average, the Narmi website receives around 500 unique visitors from the United States each month.

This is based on the website’s high rankings for roughly 800 keywords in the country’s search engine results pages (SERPs).

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Estimated potential organic visitors would amount to about 81,000 if the domain achieved first-place results for all 800 keywords.

Now we’re starting with the raw data. Additionally, you will need to:

  • Include extra keywords for which you would want to improve your search engine ranking.
  • Eliminate extraneous search keywords from the data collection, such as unrelated brands for which you rank 81st because you mentioned them once in a blog post.

It’s unrealistic to expect to be at the top of search results for every possible keyword.

Nonetheless, you may use your data to develop a phased strategy that illustrates incremental benefits if the situation were improved by 10%, 20%, etc.

This will help you show other stakeholders and possible investors what has to be done to achieve specific organic traffic objectives, as well as how the value of your efforts relates to the time and money invested in making those changes.

Put Your TAM to Use!

Your TAM data may be used for even more accurate lead and sales forecasting.

Forecasting of lead

Most chief executive officers and other stakeholders in SaaS and lead generation model businesses see the pipeline as their most critical performance indicator.

This may be estimated by modeling your current lead data, much like the future traffic opportunity.
If we use the Narmi estimates and assume they continue to get 11 SQLs (sales qualified leads) every month, we may estimate that it takes 38 sessions to generate one SQL.

At that pace, we can project a monthly lead volume of 2,116 for this particular keyword set. Again, this is modeled at a perfect first-place finish, but much as with traffic estimates, we can adjust for incremental performance gains if necessary.

Long-term projections may be made based on churn rates and LTV if the predicted lead volume is multiplied by the lead value (lifetime value).

Problems with employee retention may also be revealed.

The emphasis may shift to either the product or the customer service/SDRs (sales development representatives) and perhaps find flaws with the onsite content and product messaging; if the pipeline shows adequate numbers for the free trial sign-up, then not enough are converting to paying customers.

Transaction Prediction

If you own an online business, you can use this method to predict your potential sales volume and income (based on your current or forecast AOV).

You may divide this by-product or seasonal category and combine the projections if your data vary much throughout the year.

Again, your statistics on the potential for organic transactions and revenue may be compared to incremental improvements:

How many leads/transactions can be expected from the current user journey/site conversion rate to justify the investment/stimulate growth?

Opportunities and issues may be seen before they are missed or experienced if business transactions or leads on existing are predicted.

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