All go-to-market strategies start with a market analysis to identify the attractiveness and the dynamics of a company within a special industry. To do so, businesses often refer to Total Addressable Market (TAM), Serviceable Market (SAM) and Serviceable Obtainable Market (SOM).

Even though businesses across sectors can get access to high volume of market data, our recent survey indicated that global leaders are still making decisions based on gut feeling, rather than data. Undoubtedly, there are multiple implications when doing so, but the biggest one arises when deciding to fuel your revenue engine and expand to new territories.

Here are 4 benefits of becoming a data-driven organisation.

1. Empower financial forecasts and estimations.

The total addressable (TAM) and serviceable market (SAM) are frequently used as a baseline for financial models and projections. These insights are critical for internal stakeholders to manage the budget spent on each country or region. Once you know the total addressable market, people responsible for driving the revenue engine and increasing the revenue margin can plan their budget efficiently, either for quick wins or in the long-term.

Furthermore, in the case of scale ups and start-ups, it assists with getting funding. Investors want to know your business’s potential to calculate the entire value of the company by objectively estimating the market value, penetration, rivals and timeframe. Thus, all entrepreneurs should be aware of their TAM while making their investors pitch.

2. Empower headcount growth.

The serviceable obtainable market (SOM) is most useful for businesses to determine growth targets as well as the amount of employees in specific positions such as sales or marketing specialists. As you make financial predictions, create your benchmarks, evaluate promotions for current team members, and budget for spending, it’s critical to forecast your potential employee demands.

3. Map out your industry/region.

Data on your total addressable market can also be used to allocate your sales force and marketing tactics strategically across different verticals, regions, industries, and companies - based on size. If you know that a significant amount of your TAM derives from companies with 50 or more employees, for instance, you can allocate extra sales representatives to this specific market segment, instead of letting them focus on smaller accounts.

4. Make accountable decisions.

To understand their growth rate and growth potential, companies should always look and understand their serviceable obtainable market. How is your company performing? Is your company expanding while TAM is increasing, or are you missing a lot of opportunities for growth while the market is becoming larger and maybe more competitive? Under the perfect circumstances, these two components should grow proportionally or ideally, your business growth should outpace the TAM increase. In addition, calculating your SOM based on accurate and enough data will help you make more informed and guided decisions when it comes to allocating the majority of your resources in the segments with the biggest potential.