- By: Mark Jakobsen
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Understanding your serviceable obtainable market
Good news! If you’ve worked your way through the total addressable market, and the serviceable addressable market, the service obtainable market is the only thing left to do!
This is the final segment of your market sizing and will give you as accurate figure as possible on who you can realistically attract and convert as new business. It incorporates the previous steps, along with additional factors such as market share, competition, and your company’s ability to penetrate and capture a meaningful portion of the identified market.
How do you calculate your serviceable obtainable market?
To get to your final figure you need to look at both external and internal factors. External factors will be your competition. Unless you operate as a monopoly you will have competitors within the market who will already have a portion of your customer base, and who will also be looking to acquire more at the same time as you. You will need to understand the competitor landscape and judge the relative size, merits, and dangers each competitor poses. But once you know how you feature in the competitor landscape, and if you uncover that you hold 40% of the market, then you can apply that to the service addressable market to see the opportunities that would be out there for you.
But as well as the external factors you need to consider the internal factors too. For example, if you see your serviceable addressable market has 10,000 customers in it, but your current sales and account management team only have the resources to convert 2,000 in the year, then there is a strategic decision to make on whether to, or when to scale your operations up.
Evolving over time
Due to its nature, serviceable obtainable market is a dynamic metric that will evolve over time. This will be based on the effectiveness of your business strategies and the changing competitor landscape. What it does do is give you as close an estimate as possible to the potential customer base waiting for you to convert in the coming year, and targets for your company to work to.
If you need a hand understanding your serviceable obtainable market, get in touch and we would be happy to talk it through.