Market Size Is in the Eyes of the Beholder

I recently took on a new client who was offering an educational product. The client told me that their target audience was “all the students who are being homeschooled right now.” My role was to help the client reach their target audience. With about 50 million students being homeschooled during the early days of the pandemic, that made my job rather easy.

Defining your target audience is critical to the success of any marketing campaign. If you are talking to everyone, you are talking to no one. Share on X

But here’s what I knew: If I helped the client reach these homeschooled students, they would say that I woefully failed.

Not your investor’s target audience

Startups and investors refer to market size as

  • Total Available Market (TAM),
  • Serviceable Available Market (SAM), and
  • Serviceable Obtainable Market (SOM)

My goal was to help the client refine their target market so that we both could be successful. In order to calculate the client’s SOM, we had to know who would want, need and buy the client’s product. My interviews with the client suggested that their product was most often used by students who struggled to read and those with ADHD, ADD or dyslexia. A clearly defined niche within the homeschooled market! Armed with this info, we were ready to refine the client’s marketing plan to reach the target audience.

Defining your target audience is critical to the success of any marketing campaign. If you are talking to everyone, you are talking to no one. When you talk to an investor, you want to emphasize the size of your TAM and SAM. When you create a marketing message, you want to speak to your niche audience, which may be even smaller than your SOM.

The New England (Boston) Red Sox

Sam Kennedy, the CEO of the Boston Red Sox, understands the power of identifying the right target audience. While the Red Sox play in Fenway Park in Boston, Kennedy often refers to the team’s “New England fan base”. The Boston metro area has a population of 4.6 million. New England, which includes six states, has a population of 14.8 million people. Kennedy does not just claim New England for the Red Sox, he declares the Red Sox the Major League Baseball team of New England. This inclusion of the broader market defines the target market for television viewership, corporate sponsorships, ticket sales and team licensing and merchandise. It also demonstrates the importance of identifying the right audience based on the your strategic goals.