Enter the total number of accounts in the industry and the annual contract value into the calculator to determine the total addressable market value.

Total Addressable Market Formula

The following formula is used to calculate a total addressable market. 

TAM = ACC * ACV
  • Where TAM is the total addressable market ($)
  • ACC is the total number of accounts in the entire industry
  • ACV is the annual contract value

To calculate the total addressable market, multiply the number of accounts in the entire industry by the average annual contract value.

Total Addressable Market Definition

A total addressable market is a term used to describe the market size of a certain industry. This calculator uses a bottom-up approach that uses industry and internal company data to determine the TAM.

Total Addressable Market Example

How to calculate a total addressable market?

  1. First, determine the total number of accounts.

    This is the total number of accounts in the entire industry.

  2. Next, determine the annual contract value.

    Determine the annual contract value of each account.

  3. Finally, calculate the TAM.

    Calculate the total addressable market using the equation above.

FAQ

What is TAM?

TAM stands for total addressable market and is one metric used to describe the market size of an industry or segment.