Understanding Serviceable Obtainable Market (SOM)
If you’re involved in the business world, particularly in areas such as marketing, sales, or product development, you’ve probably come across terms like Total Addressable Market (TAM), Serviceable Available Market (SAM), and Serviceable Obtainable Market (SOM). Of these, the Serviceable Obtainable Market often tends to perplex or intrigue the most. With a special focus on LinkedIn, this article aims to get to the bottom of what SOM really is, how it works, and why it matters.
SOM Defined
SOM, or Serviceable Obtainable Market, is basically the portion of the SAM, Serviceable Available Market, that you can realistically capture. It considers your resources, capabilities, and limitations, as well as the presence of competition.
Let’s take the context of LinkedIn. LinkedIn is a leading professional networking platform with several diverse services, but for the sake of simplicity, let’s just consider one – LinkedIn Jobs. Here, the SAM would be all the companies on LinkedIn that are looking to advertise their job vacancies. The tool helps companies to pinpoint the best talent while giving job seekers a platform where they can easily discover and apply for jobs.
But can LinkedIn Jobs realistically serve all companies on its platform? Probably not, due to various factors like limited resources, competition from other job advertising platforms, and the fact that not all companies on LinkedIn might be interested in or able to use this particular service.
This is where the SOM comes in. It’s a more specific, realistic estimate of the market share that LinkedIn Jobs can acquire within the SAM. Estimating the SOM helps LinkedIn Jobs to potentially create more targeted strategies focusing on the companies they are more likely to convert to customers.
The Importance of SOM
SOM is more than just a business buzzword. It’s an essential component of your business planning and strategy. Without a clear idea of your SOM, you’re essentially moving with a blindfold on. This could lead to overstated forecasts, unrealistic goals, or wasted resources.
By identifying your SOM, you get a clearer picture of what success could look like for your business within a specific timeframe. It enables you to make better-informed decisions, strategize more effectively, and refine your business offerings to match the real-world demand.
For example, if LinkedIn Jobs identifies their SOM – the companies they are more likely to convert – they can tailor their marketing efforts more effectively. They could potentially target these companies with personalized advertisements, improve their offerings based on their needs, or even design pricing strategies that appeal more to these companies.
Bottom line, SOM brings your grand visions and plans into a more realistic, achievable frame of reference. This doesn’t mean you’re downsizing your goals. It means you’re setting more achievable targets based on a deep understanding of your market, competition, and capabilities. And this can be an essential step towards long-term, sustainable success.
Finally, SOM is not a fixed figure or a one-time estimation. Just as your business and the market environment evolve, so does your SOM. Regularly revisiting and recalibrating your SOM can ensure that you stay connected with the realities of the market. And, staying connected with the reality of the market is what propels a business forward.
In a nutshell, in the context of LinkedIn or any other business, understanding and utilizing SOM is a key to create effective strategies and to synchronize your business realities with market realities. It’s all about being ambitious while staying realistic and clued into the ever-changing market dynamics.