SiriusDecisions Analytics: Total Addressable Market Overview Project

Objective

This project quantifies and segments the total addressable market (TAM) for a company’s products and services. It estimates market size and growth by detailed segment, assesses a company’s position in each segment, and prioritizes the best target markets for the near future. Armed with this information, marketing leaders target their marketing and sales activities to the largest, fastest growing, and/or newly emerging segments. Stakeholders in Marketing, Sales, Product Management, and Finance make better, informed decisions using a consistent set of assumptions throughout the organization.

Problem

CMOs, CSOs, and other marketing and sales leaders in most organizations share a common problem – how to allocate scarce resources to many market segments. To achieve optimal results, go-to-market plans and activities must be aligned with top-down corporate goals, focused marketing activities, and bottom-up sales assignments. Understanding market size and growth by detailed segment – defined by industry, function, business size, geographic area – clarifies market distribution, highlights the best opportunities, identifies lurking risks, and provides a common set of assumptions to align and guide executives, planners, and managers at all levels of the company. Understanding the company’s position in each segment refines and enhances resource allocations and target marketing efforts. If generated and implemented properly, detailed market estimates improve the company’s position in the market – at the expense of its competitors.

Solution

SiriusDecisions Consulting uses large-scale database integration and insightful analytics to combine a company’s internal data with comprehensive, consistent, and detailed market metrics by industry, company size, function, and geographic area. All of the data are cast to reflect the client’s unique view of the market segments in which they operate. This analysis brings market characteristics into focus to support successful go-to-market activities. Using analytics and combining internal customer data with these detailed TAM estimates enables an objective view of a company’s strengths and weaknesses in the market.

This project will answer the following questions:

• How big is the market, and how is it segmented?
• How big is each market segment, and how fast is each segment expected to grow?
• Does the corporate plan align with expected market activity? If so, how do we allocate top-line totals to segments and geographic areas? If not, what opportunities have been overlooked, or what risks have been ignored?
• What is the company’s market share in total and by segment, and what does this indicate about the company’s strengths and weaknesses in the market?
• Which segments represent the best targets for the next 12 months?
• Which customers are in segments that are expected to do well over the next 12 months?

Who Should Participate?

Many executives, managers, and planners can benefit from the detailed estimates and insights that this analysis can provide including:

• CMOs
• CSOs
• Marketing Executives and Managers
• Marketing and Sales Analytics Teams
• Sales Executives and Managers
• Sales Analytics Teams,
• Product Marketing Leaders and Analysts

Typical Prerequisite Work

To prepare for this project, SiriusDecisions will work with the client’s project team to collect and review base line data such as the following:

• Documentation of current company strategy, challenges, targets, and growth plans
• Existing segment definitions
• Existing territory definitions
• Current and historical customer data by segment, geographic area, and account with firmographics, products and/or services purchased, value of bookings, number of units purchased, number of users, etc. for several years at a monthly or quarterly frequency
• Current and historical external data for several years at a monthly or quarterly frequency including
  • Economic and market conditions for specific industries and countries
  • Business size distributions for every segment
  • Occupation distributions for every segment
  • Relative prices for specific products/services and groups of products/services
  • Underlying trend and seasonal factors
• Relevant content from the SiriusDecisions repository for team members to review

Typical Project Deliverables

Key deliverables from this project will include:

• Complete top-down, bottom-up estimates of market size and growth based on agreed to segments – industries, business sizes, functions, geographic areas – using mutually agreed to database formats
• Detailed description of the segmentation methods using mutually agreed report formats
• Review of company and/or business unit goals relative to detailed market analysis
• Project related SiriusDecisions research materials
• Ongoing support to answer questions, discuss methods, make recommendations, provide guidance on next steps

Sample Timelines

Weekly or bi-weekly status meetings ensure open communications with the client and keeps the project on track for timely completion.

Consulting Process and Data-driven Methodology

Projects begin with a kickoff that includes clear outline of the detailed approach, schedule of status updates, next steps and deliverables. The SiriusDecisions Consulting process outlined below guides clients through a set of coordinated steps and milestones to a successful outcome. One of the most important steps is the “review and revise” phase, which allows initial feedback to be incorporated into the development of a final set of prioritized recommendations and deliverables. All process steps and milestones are designed to work in concert to apply operational intelligence, SiriusDecisions frameworks, models and best practices to create actionable plans and results.

SiriusDecisions Consulting leverages a unique methodology for collecting insights about the current state of an organization and then comparing these findings to similar organizations. The SiriusIndex is used to compare best practices achieved by a peer group (organization size, industry, go to market approach, etc.), relative to the current CMO results as well as best in class organizations. These comparisons provide context and inform recommendations in both an interim review and final report. Final reports are typically presented in an onsite working session followed by a final PowerPoint report and relevant SiriusDecisions research.

Scalable Solutions to Help B2B Leaders Grow Their Business

SiriusDecisions provides research-informed consulting services that operationalize our market-leading models, frameworks, best practices, benchmark data and research to address business problems or opportunities and drive profitable growth. With SiriusDecisions Consulting, you will broaden understanding, adoption, application, utilization and impact of SiriusDecisions methodologies within and across teams and go-to-market ecosystems.