DO YOU KNOW YOURTOTAL ADDRESSABLE MARKET? 3 Steps to Modernize Your Go-to-Market Approach

Table of Contents

What is Your Growth Strategy? .............................................................................................................................3

Focus on the Right Customers ...............................................................................................................................4

– ICP > TAM > ABM: Taming the Alphabet

Step 1: Define Your Market ........................................................................................................................................5

– Create Your Ideal Customer Profile (ICP)

– Clean and Enrich Your Current Data

– Determine How Many Targets Are in Your Database

Step 2: Identify Your Total Addressable Market to Maximize Your Opportunities .......9

– Use TAM to Supercharge Your Entire Business

– Tips for TAM Success

Step 3: Use Account-Based Marketing (ABM) to Engage and Win ..........................................12

Your Data Will Make or Break Your Go-to-Market Success .............................................................13

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What is Your Growth Strategy? In the quest for growth, many companies are simply selling to accounts already

in their CRM and marketing automation systems, unaware of the vast number of

relevant targets not in their data.

Sure, you advertise and sponsor events to attract unknown leads, but it’s

common for 80% to 90% or more of those leads to be totally worthless.

That’s why it is so important for every company to know its total addressable

market, or TAM.

TAM is your universe of potential customers, and it defines the size of your

target market, while helping you avoid wasting time on irrelevant leads.

If you don’t know your entire market, you’re hampering your own efforts for

growth. Targeting your TAM gives your sales and marketing teams access not

just to more of your best leads, it gives them access to all of your best leads.

The first step to finding your TAM is understanding your ideal customer or who is interested in your products. Let’s use a simple example: You open a lemonade stand and pitch your drink to kids walking by. Very quickly,

you sell lemonade to every kid in the neighborhood, then interest (and revenue!) dries up. You can try to

increase wallet share by selling more to each customer, but people can only drink so much lemonade.

Your challenge is finding new customers, but who should you target? Well, both kids and adults like lemonade. So do people outside your

neighborhood. People doing yardwork on hot days really like lemonade and might even pay more if you pitched them with a tailored message

at the right time. So, while your initial target market was “kids in your neighborhood,” it only took a little work to expand that market by thinking

about your ideal customer and to focus your efforts by targeting customers at the right time.

Without an ideal customer profile (ICP), you’re casting a net and hoping targets swim into it. But with an ICP, you’re better armed to look for and find everyone in your total addressable market.

PRO TIP:

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Total Addressable

Market (TAM)

Current Target Market

Current Customers

WHAT ARE YOU DOING TO FILL THIS

WHITE SPACE?

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IDEAL CUSTOMER PROFILE Define your targets.

Who are my perfect customers?

Where do they work?

What do they do?

What accounts fit that profile?

Where are they located?

How many are in my database?

Let’s target:

Sally Jones, VP of Sales

MegaCorp, Inc.

San Francisco

Her goals are…

Her challenges are…

My account strategy is…

TOTAL ADDRESSABLE MARKET Find every matching account.

ACCOUNT-BASED MARKETING Target them one by one.

Total Addressable

Market (TAM)

Current Target Market

Current Customers

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2

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Each of these concepts builds on the previous, so to be effective, treat it as a three-step project: Define your best targets, find the data on accounts who match that profile, then start targeting those accounts one by one.

PRO TIP:

Focus on the Right Customers

ICP tells you who to target. TAM tells you who those customers are. Then comes Account-Based Marketing (ABM),

which is how you start targeting those customers, one-by-one. Here’s how all three of these concepts fit together:

ICP > TAM > ABM: TAMING THE ALPHABET

OK

IDEAL

Questionable

Bad fit

Step 1: Define Your Market

Determining your total addressable market starts with your ideal

customer profile (ICP). It helps ensure you have every potential

customer in your sights.

Say you’re selling human resources software to “every B2B

company.” That’s a mistake because you’re not really sure who

does and doesn’t want your products. A one-person consulting

firm doesn’t need HR software, and neither does a big company

whose growth has stagnated, nor does that healthcare provider

with specialized requirements.

The first step to understanding your next customer

is to look at your existing customers.

Maybe your best customers are fast-growing companies with new

HR executives who need help recruiting and onboarding dozens

of new hires every week. Maybe you also find that customers will

devote up to 2% of revenue to HR software, and you have a typical

contract value of $5 million.

WITH THAT DATA, YOU CAN BEGIN TO DEFINE YOUR ICP AS FOLLOWS:

Employee count has grown more than 10% over last year.

HR executive has been in the role less than three years.

$250 million or more in revenue.

Not in the healthcare industry.

ICP helps you focus on the right customers. So how do you get started?

#5

That’s a great start to tighten the focus of sales and

marketing on only the right prospects. No use wasting

efforts on a $75 million revenue company or one whose

employee count is declining. You know they’re either

not interested or you’re going to work harder for

a slim chance at a smaller deal.

Location

IndustryTitle

Step 1 Continued: Define Your Market

FIRST, CREATE YOUR IDEAL CUSTOMER PROFILE

At a minimum, your ICP should include a geographic region, a target contact title or

level, and an industry. It’s better yet if you can drill down to additional firmographics,

like company size.

Other criteria might include quantifiable data, like revenue change or recent

M&A activity, and qualitative data or insights, like whether the company is

innovative or has a strategic business initiative related to your offering.

Here’s how to put together your ideal customer profile:

Look at your best customers. Not every customer is a good, profitable customer. “Best” means those who are a great fit, who see value in your company and offering, and who

buy more, more often, and for longer periods of time. Determine why they needed your product, why they bought from you, and what event may

have prompted a need. Get sales and marketing together to discuss what makes a great target.

List firmographic similarities across customers. This includes size and industry to decision makers and buying departments. These might be quantifiable and easy to find, like revenue, or they

might be a bit more qualitative, like “aggressively seeking market share” or “early adopter.” Don’t discount those types of measures that require

more intelligent insights. Maybe a recent acquisition signals a good target or companies who hire lots of PhDs. A good data provider can get

you that information!

Evaluate your data to see if you have what you need. You want to be able to identify similar prospects, so if the number of employees is important, be sure every account has

that data, and that the data is current and accurate. According to sales and service performance company MHI Global,

approximately 35% of sales opportunities are bad targets, such as prospects

who you eventually lose or those who become liabilities after you’ve won. ICP helps you refocus on accounts

you’re more likely to close and those who are more likely to be good, profitable customers you can retain.

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Firmographic Criteria Ideal Customer Profile

Title CXO

Industry Technology

Geography America + Canada

Market Insights Ideal Customer Profile

Company Culture Innovative

Change in Leadership New Leader

Company Growth Rate Positive

Mergers & Acquisitions Growing/Acquiring

Use a combination of firmographics and market insights to create a well-defined profile of your ideal customer.

Step 1 Continued: Define Your Market

NEXT, CLEAN AND ENRICH YOUR CURRENT DATA

Many companies don’t realize just how bad their CRM and marketing automation data

can be. Studies have found B2B data decays at near 5% per month just through job

changes, retirements, relocations, acquisitions, and other day-to-day events. In some

cases, B2B data decay can be as high as 70% per year, according to Biznology. In

another study, SiriusDecisions also found that, at any given time, up to 25% of customer

and prospect data contains errors. In addition, many records are missing data elements

or were created quarters or years ago and contain outdated information.

If you’re looking to target more effectively, you’ll need good data to start.

That means cleaning it up and filling in the blanks so you’re not wasting time and

resources, delaying sales cycles, or stalling opportunities.

Here’s how to begin your data cleanup:

Purge irrelevant data to save time, cut costs, and focus your efforts. If a record was created a few years ago, it’s probably no longer useful or accurate. If it’s outside

of your target ICP, it’s just taking up expensive space in your CRM and marketing automation

systems. Since many of those vendors charge by data, purging irrelevant accounts and contacts

can save you thousands of dollars per month—or more!

Stay ahead of data decay by working with a service provider to automatically clean and enrich incoming leads. As new accounts and contacts are added, let a vendor fill in important missing data, while not overwhelming leads with a long web form or

questions to which they might not know the accurate answers. Good data on incoming leads also helps enable accurate lead scoring and proper

lead routing, so be sure to get it right as soon as a contact record is created.

Be bold and decisive when it comes to cleaning your data. If a contact hasn’t visited your website in the past 12 months, is he or she still a viable prospect? Eliminating irrelevant data keeps sales and

marketing teams focused on the right accounts, and prevents them from chasing those random larks that waste time and resources.

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70%PER YEAR

25% OF CUSTOMER ANDPROSPECT DATA CONTAINS ERRORS

5%PER MONTH

B2B DATA DECAYS:1

AT ANY GIVEN TIME:2

&

Sources: 1 Biznology, February 2015; 2 SiriusDecisions

UP TO

UP

TO

A service provider can make sure firmographics are correct, and critical fields are all complete and current. A good provider can also help ensure duplicates are correctly matched and quickly merged.

PRO TIP:

Step 1 Continued: Define Your Market

FINALLY, DETERMINE HOW MANY TARGETS ARE IN YOUR DATABASE

Remember, it’s all about focus. You’ve developed your ICP to focus on the right targets, so search your own CRM and

marketing automation data to see how many accounts match. It’s probably less than you expect, but it gives you

your starting point. For those accounts that don’t match your ICP, consider archiving them to get them out of the

way. For those that do match your ICP, overlay them on a map to visualize your geographic coverage. Determine

if your resources are in the right locations or if you have opportunities for expansion.

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Total TAM - Business Segment Total TAM - Total Companies

13,853 36,308250-499

500-749

<250 9,255

Total TAM - Industry

% of TAM Captured

Total TAM Map - (State)

9,041Retail

Insurance

Media 7,780

7,609

4,318

9.9%

Here’s how to evaluate your data:

Look for gaps to see how many accounts are missing

critical information, such as addresses, industry codes or

employee counts. Whatever is important to your ICP,

you’ll want to be sure every account has that data.

Look at recency by setting a maximum age for your

data. If some data is stale, build a plan to refresh the data

and bring it up to date.

Eliminate duplicate records so you’re not inflating

your potential or annoying prospects with too many

redundant touches. When you find duplicates, merge

them into one.

TAM DATA VISUALIZATION

Step 2: Identify Your TAM to Maximize Your Opportunities

To identify your TAM, you’re going to need a third-party service

provider, one that you’re sure has access to current, accurate,

and complete data. We’ve found that companies have as little

as 10% of their TAM in their current systems. You can’t rely on

advertising or lead generation to find your entire TAM, so cut

to the chase and work with a reputable provider to get the

complete picture instantly.

You can then compare your data and ICP to their market

intelligence and find what’s missing. That missing data is called

your white space.

It’s all of the target accounts that aren’t in your database and

all of the individual data elements not populated for accounts

you already have. But it’s not just missing accounts; it’s the

thousands of missing contacts within those accounts, and the

missing attributes (email address, phone number, etc.) of

those individual contacts.

Quantify the size of the white space opportunity by multiplying your average contract value by the number of

new white space accounts. You might only win a percentage

of those accounts, but you can quickly see the huge potential

opportunity hiding in the white space.

Get support for new initiatives using your focused

approach, and show executives where budget is needed

based on potential opportunity.

Better allocate your resources to achieve faster growth

by planning more events where targets reside or by focusing

more campaigns on more targeted channels.

Here’s what else you can do once you know your white space:

Once you identify your white space, import those net new prospects into your marketing automation and CRM systems. Now you’re ready to get to work on growth… and educating your company on the opportunities in front of you!

PRO TIP:

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Step 2 Continued: Identify Your TAM to Maximize Your Opportunities

USE TAM TO SUPERCHARGE YOUR ENTIRE BUSINESS

On one hand, TAM is just a number (e.g., you have 2,389 potential targets).

On the other hand, TAM is a list of accounts and contacts giving you access to

your entire market. But what else can you do with this windfall of data?

Build Smarter Go-to-Market Strategies

This is where TAM really helps supercharge other initiatives, such as sales

planning and allocation. It helps focus every go-to-market program on

precisely the accounts that fit your targeting criteria. TAM can help you assign

sales quotas with more accuracy. Once you know your TAM, you know where

accounts reside, and can assign potential values to accounts and regions.

TAM can also help align sales and marketing on the right targets, bringing

both teams together with more focus and more agreement on programs,

campaigns, and budget allocations. Being able to visualize your market is

a bonus that helps with defining and assigning territories, allocating field

resources, and focusing marketing efforts.

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Make Better Business Decisions As you look to expand and grow, TAM can also be used to gauge the size of

new markets, justify investments in a current market, or evaluate new product

opportunities. In every case, having an accurate TAM is critical to making the

best business decisions. A good example comes from HgCapital, a private

equity investor based in London and Munich, who says that “being able to tell

a clear story of what truly defines a company’s addressable market is a great

starting point for thinking creatively about where to invest for growth.”

If, for example, your average contract value is expected to be $25,000 and the

TAM is 1,237, then simply multiplying those two values puts the total potential

market opportunity at $31 million. If your TAM is inaccurate, even by a small

margin, you might make the wrong decision.

Step 2 Continued: Identify Your TAM to Maximize Your Opportunities

TIPS FOR TAM SUCCESS

Now that you’re fully briefed on TAM, here are some extra tips to help along the way:

Don’t skimp on data cleansing. Data is the key to informed growth, and if it’s bad, you’ll make bad decisions,

marketing will target the wrong leads, and sales will waste time.

TAM is not a one-and-done project. It’s an ongoing initiative and evolves as your business grows.

Reevaluate your ICP, and target accounts at least annually.

Keep your data current. Remember that every target account’s data changes (up to 70% per year!) as contacts

transition roles, organizations adjust strategies, and overall markets shift.

Use TAM to get sales and marketing aligned around the markets and customers you’re pursuing. Get your

teams working together early in the TAM project.

Knowing your TAM is a critical step in kicking off an account-based sales or marketing (ABM) program. Take this foundational step to be better equipped for ABM success.

At InsideView, many of our customers discovered they were targeting as little as 10% of their total addressable market!

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ABM is about finding those companies, the right ones that fit your Ideal Customer Profile (ICP) in your total addressable market. ICP tells you what’s important to potential customers. TAM tells you who to target. ABM tells you when they’re ready.

PRO TIP:

Step 3: Use ABM to Engage and Win

Knowing your TAM opens up new avenues of growth by focusing on account-based

techniques. In traditional sales and marketing, you’re targeting a broad swath of

accounts with the same message. But with ABM, you’re targeting a company with

a message specifically tailored to it, and you’re looking collectively at how every

contact from that company engages with you.

ABM takes your sales and marketing efforts to a deeper level, and having

accurate and complete data makes it possible.

HERE’S HOW IT WORKS:

TAM helps in the account selection process, pinpointing which accounts are ripe

for targeting. Then, based on business events or changing firmographics, you can

focus on which accounts are the best targets right now.

Once the accounts are selected, you can get to work identifying the right

contacts and develop your messaging and engagement methods. Using current,

relevant business insights on accounts—such as the new partnership or recent

acquisition—is the best way to engage.

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Select the accounts to target based on recent events or other

purchasing drivers identified in your ICP.

Analyze each account individually to hone in on the specific

challenges or business events relevant to it.

Measure success at the account level based on awareness,

engagement, and influence.

This is where data providers and other data

technologies can help by enriching your

existing data, increasing its accuracy, and

alerting you to important business events.1

ABM Needs Great Data

Clean, accurate account and contact data

is required to make ABM work at all, let alone

work well. Think of it step by step:

If you don’t have good account data,

you won’t know which accounts to target.

If you don’t have good contact data,

you won’t know which people work at the

same accounts, if they’re the right personas,

or how to contact them.

If you don’t have timely intelligence and

insights, you won’t be able to engage with

relevancy and urgency.

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Source: 1 chiefmarketer.com

Your Data Will Make or Break Your Go-to-Market Success With ICP, TAM, and ABM, the whole is vastly more valuable than the sum of its parts. Determining your ideal

customer is enlightening, but not if you don’t figure out who he or she is. Getting clarity on your total addressable

market opens new opportunities, but not if you’re using ineffective methods to engage with them. And trying to target

individual accounts won’t be effective if you’re not targeting the right accounts at the right time.

Laura Ramos, Vice President, Principal Analyst at Forrester Research, authored a September 2016 report titled,

“Retro Yet Revolutionary: Demystifying Account-Based Marketing.” In it, she presented “four key steps to setting up

ABM for success,” which are shown in the image below.

ICP and TAM, while important and valuable on their own, are critical prerequisites for a successful ABM program, according to Ramos. ICP defines your target selection, while TAM pinpoints who those targets are and gives you the detailed insights required to engage effectively.

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2

3

4

SELECT AND TARGET Set strategy, prioritize accounts,

and identify and target contacts.

GATHER INSIGHTS Identify key issues, develop insights,

and set the communication plan.

DESIGN ENGAGEMENT Create assets, messages, or plays to

engage accounts.

ORCHESTRATE INTERACTION Execute aligned activity, capture

interactions, and track progress.

ASSESS, REVISE, REPEATSource: Forrester Research, 2016

Bad Data = Bad Results While truly game-changing results can be achieved when combining all three steps in this eBook, it can only happen

if your underlying data is clean, current, and complete.

SiriusDecisions’ Consulting Director Mike Raimondi, recently wrote that, when it comes to market size and segmentation,

“using the correct data to gauge and prioritize each segment and each prospective account is critical.”

“With a little effort, you can combine external market data with your company’s internal data to yield comprehensive, consistent and detailed market metrics by industry, company size,

function and geographic area. This type of analysis brings market characteristics into focus and supports successful go-to-market activities and resource management.”

~ Mike Raimondi, Consulting Director, SiriusDecisions

About InsideViewInsideView powers the world’s business conversations. Its leading targeting intelligence platform helps sales and marketing teams

quickly identify new opportunities, and effectively connect with prospects and customers. InsideView is the only company that

begins with the industry’s most accurate company and contact data, and enhances it with relevant, real-time business insights

and authentic connections. More than 20,000 companies use InsideView data to find and qualify the best targets, engage

with more relevancy, close more deals, and retain and expand accounts. InsideView’s headquarters are in San Francisco.

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Want to learn more about how ICP, TAM, and clean data can impact your business? Visit www.insideview.com/total-addressable-market-tam to find, target, and engage with your

total addressable market. Contact Sales at (415) 728-9340, or email sales@insideview.com.

insideview.com @insideview