What is a SOM? (What is Serviceable Obtainable Market?)

Imagine you have a fantastic idea for a new toy, game, or maybe even a super cool snack. You think everyone will love it! But when you start a business, you can’t just hope to sell to everyone in the whole wide world right away. That would be like trying to water every plant in a giant forest with a tiny watering can! It’s too big a job.

This is where an important idea called SOM comes in. SOM stands for Serviceable Obtainable Market. It’s a fancy way of saying: “Out of all the people who might want what I’m selling, who can I actually reach and realistically sell to right now?” Thinking about your SOM helps a business focus its energy and make smart plans.

What is a Market, Anyway?

Before we dive deep into SOM, let’s quickly talk about what a “market” means in business. When grownups talk about a “market,” they usually mean all the people or other businesses who might want to buy a certain product or service. Think of it like this:

• The “toy market” includes all kids (and some adults!) who want to buy toys.
• The “snack market” includes everyone who gets hungry and wants a yummy treat.
• The “bike market” includes people who want to ride bikes, whether for fun or getting around.

Understanding your market is the very first step for any business. It helps you figure out who you’re trying to help or make happy with your product.

Big Market, Smaller Markets: TAM, SAM, and SOM

To really understand SOM, it’s helpful to see how it fits into the bigger picture of markets. Think of it like three different-sized circles, one inside the other:

1. The Biggest Circle: TAM (Total Available Market)

This is the biggest possible market for your product or service. It’s everyone in the world who *could* ever use or want what you’re selling. It doesn’t matter if they can actually buy it from you or if you can even reach them. It’s just the total number of potential customers out there.

• Example: If you make a new type of healthy juice, your TAM might be everyone on Earth who drinks juice. That’s a huge number!

The TAM is a fun number to think about, but it’s not very helpful for everyday business planning because it’s just too big.

2. The Middle Circle: SAM (Serviceable Available Market)

The SAM is a smaller, more realistic slice of the TAM. This includes all the people in the TAM that you can actually reach with your business model and resources. It’s the market you *could* serve if everything went perfectly and you had all the money and people you needed.

• Example: Sticking with the healthy juice. Your TAM is everyone on Earth. But maybe your business only sells juice in your country or even just in your state. So, your SAM would be all the people in your state who drink juice and who you could theoretically deliver juice to. This is still a big number, but it’s much smaller than the TAM.

The SAM helps a business see its potential for growth. It shows them how big they *could* get if they work hard and expand.

3. The Smallest Circle: SOM (Serviceable Obtainable Market)

And now, we get to the star of our show: the SOM! The SOM is the smallest, most practical circle. It’s the part of the SAM that you can realistically capture and serve right now with your current business, your current team, and your current way of doing things. It’s the customers you can actually get and make happy today, or in the very near future.

• Example: Back to the juice. Your TAM is everyone on Earth, your SAM is everyone in your state. But your SOM? That might be the people in your town who drink juice, live close enough for you to deliver, and who you have enough ingredients to make juice for. It’s the customers you can serve and delight today.

The SOM is super important because it tells a business where to focus its marketing and selling efforts right now. It helps them set achievable goals and measure their success.

Why is Knowing Your SOM So Important?

You might be thinking, “Why bother with all these circles? Can’t I just try to sell to everyone?” Well, no, not really. Knowing your SOM is like having a map and a compass for your business journey. Here’s why it’s so important:

1. Focuses Your Energy: Instead of trying to please everyone (which is impossible!), you know exactly who your most important customers are right now. This means you can spend your time and money more wisely.
2. Sets Realistic Goals: You can make plans you can actually achieve. If your SOM is 100 customers, you won’t plan to sell to a million. This helps avoid disappointment and keeps your team motivated.
3. Helps You Grow Smartly: Once you’ve successfully served your current SOM, you can think about how to expand. Maybe you open another store, offer shipping to a new area, or add new features to your product. Your SOM can grow over time!
4. Makes Better Products: When you know who your immediate customers are, you can ask them what they like and don’t like. You can make your product even better for them. For example, gathering customer reviews is a super helpful way to understand what your SOM loves and what could be improved.
5. Attracts Help (Like Investors): If a business needs money to grow, people who lend money (investors) want to see that the business has a clear plan and realistic goals. Showing them you understand your SOM helps them trust your business.

In short, understanding your SOM is crucial for a business to start strong, stay focused, and plan for smart growth.

How Do Businesses Figure Out Their SOM?

Figuring out your SOM isn’t just a wild guess. Businesses do some detective work! Here’s a simplified look at how they might do it:

Step 1: Understand Your Customers

First, a business needs to really know who its current and ideal customers are. They ask questions like:

• Who buys our product now?
• How old are they? Where do they live?
• What problems does our product solve for them?
• What do they like to do? What are their hobbies?

Gathering feedback from customers is a fantastic way to learn more. When customers share their thoughts through reviews, it gives businesses valuable information about who they are making happy.

Step 2: Look at Your Resources

Next, the business looks at what it has available right now:

• How many products can we make? (Do we have enough ingredients, machines, and workers?)
• Where can we sell our product? (Only online? In a local store? Can we ship far away?)
• How many customers can our team handle? (Can they answer everyone’s questions and help them properly?)
• How much money do we have to spend on telling people about our product? (This is called marketing!)

Step 3: Check Out the Competition

No business operates alone! There are usually other businesses selling similar things. Companies look at:

• Who are our rivals?
• How many customers do they have?
• What makes our product special or different?

Step 4: Do the Math (Simply!)

Once they have all this information, they put it together. It might look something like this:

1. Start with the SAM (everyone you *could* reach).
2. Subtract the people you can’t serve because you don’t have enough product.
3. Subtract the people you can’t reach because they live too far away or you don’t have a delivery service there.
4. Consider how many customers your competitors are likely to keep.
5. Think about how many customers you can realistically convince to buy from you with your current marketing efforts.

The number you’re left with is your SOM! It’s the most practical target for your business right now.

Making Your SOM Bigger: Growing Your Business Slice

Your SOM isn’t set in stone; it can grow! Once a business successfully serves its current SOM, it naturally looks for ways to expand. Here are some common ways businesses try to make their SOM bigger:

• Adding More Products or Features: If your juice business only sells apple juice, adding orange juice or mixed berry juice can attract more customers who might not have wanted apple juice.
• Expanding Where You Sell: Maybe you start selling online if you only had a physical store, or you begin shipping to more towns or states.
• Increasing Production: If you get more machines or hire more people, you can make more products and serve more customers.
• Improving Your Marketing: Telling more people about your amazing product, or telling them in new and exciting ways, can help you reach more customers within your SAM.
• Building Strong Customer Relationships: When customers are happy, they tell their friends and family. This is called word-of-mouth marketing, and it’s super powerful! Happy customers also tend to buy again and again, which is great for your business. Businesses often use loyalty programs to keep customers coming back.

This idea of growing your SOM over time is a big part of why businesses plan and strategize. They start small, prove they can make customers happy, and then slowly expand their reach.

How Yotpo Helps Businesses Win Their SOM

So, where does a company like Yotpo fit into all of this? Yotpo works with businesses that sell things online (eCommerce). These businesses are always trying to understand and grow their SOM. Yotpo provides powerful tools that help them do just that by making sure they connect with customers and keep them happy. Let’s look at two key ways:

1. Reviews: Listening to Your Customers, Building Trust

Imagine you’re looking for a new game. You see two games, but one has lots of positive comments from kids who’ve played it, saying how fun it is. Which one are you more likely to pick? The one with the good reviews, right?

For online businesses, reviews are incredibly important. They are like personal recommendations from real people. Yotpo’s Reviews product helps businesses easily collect and display these comments from their customers. This is super helpful for winning over their SOM because:

• It Builds Trust: When new customers see lots of positive reviews, they trust the business more. This makes them more likely to become part of the business’s SOM.
• It Provides Feedback: Reviews tell businesses what people love about their products and what could be better. This helps businesses improve, making their products even more appealing to their target SOM. It’s like having hundreds of mini-surveys! Learning from customer experience feedback is key to staying relevant.
• It Helps Other Customers Decide: Reviews act like guides for other potential customers within the SOM, helping them feel confident in their purchase. Businesses can learn how reviews influence consumer decisions and use them effectively.

By using a top-notch reviews platform like Yotpo’s, businesses can more effectively capture their SOM by showing potential customers that they are reliable and offer great products that others love.

2. Loyalty Programs: Keeping Customers Coming Back

Once a business gets a customer, the goal isn’t just to sell to them once and say goodbye! It’s much better for a business if customers keep coming back again and again. Think about your favorite store or snack – you probably buy from them lots of times! Keeping customers happy and loyal is a big part of securing and even growing your SOM.

Yotpo’s Loyalty product helps businesses create fun and rewarding programs that encourage customers to stick around. These programs often involve:

• Earning Points: Customers get points for buying things, which they can then use for discounts or special items later.
• VIP Tiers: The more customers buy, the higher their “level” becomes, unlocking special perks like early access to new products or free shipping.
• Referral Rewards: Customers get a reward for telling their friends about the business, and their friends get a discount too! This helps bring in new customers who are likely part of the business’s SOM. Businesses can even learn about what a referral code is to implement this.

Why are loyalty programs so good for a business’s SOM?

• Increased Customer Retention: Happy, loyal customers buy more often and stay with the business longer. This means a more stable and reliable SOM. Find out more about how to improve customer retention.
• Stronger Relationships: Loyalty programs make customers feel special and valued, building a stronger connection to the brand.
• Word-of-Mouth Marketing: Loyal customers are often the best advertisers! They share their positive experiences, which helps attract more people within the SOM.

With a leading loyalty program, businesses can ensure they not only obtain customers within their SOM but also retain them, turning one-time buyers into lifelong fans. The synergy between collecting reviews and building loyalty means that customers feel heard, valued, and encouraged to continue their journey with the brand. This creates a strong foundation for a business to thrive within its SOM and beyond.

Conclusion: Focusing on Your Achievable Slice

So, what have we learned about SOM? It’s all about being smart and realistic when you start and grow a business. Instead of trying to be everything to everyone, a business figures out its Serviceable Obtainable Market – the specific group of people it can actually reach and make happy right now.

By understanding their SOM, businesses can:

• Focus their efforts like a laser beam.
• Set goals they can actually achieve.
• Plan for smart growth that allows their “slice” of the market to get bigger over time.
• Build strong relationships with customers, making sure they not only find them but also keep them happy with excellent products and services.

Tools like Yotpo’s Reviews and Loyalty programs are super helpful for businesses in this journey. They help businesses listen to their customers, build trust, and encourage repeat purchases, all of which are vital for capturing and growing their SOM. It’s like having the right tools to build the best lemonade stand on the block, ensuring everyone nearby knows about it and keeps coming back for more!

Understanding SOM is a fundamental concept for any business, big or small, helping them navigate the market with focus and achieve sustainable success. It’s about knowing your limits today so you can break them tomorrow.