Feel like you’re selling something your customer doesn’t really need? Ever feel like you’ve exhausted your ideal customer profiles (ICPs) and are now dipping into non-ICP prospects?

The number one issue of struggling sales orgs is this: CAPACITY > TAM.

The Importance of Balancing Capacity-to-TAM

I’ll give you a three-minute crash course: Everything goes really well as the org grows into the market size, but when capacity overtakes the TAM things become tough and can spiral quickly.

The territories are split too thin. Has your org hit that tipping point yet?

If you have the ability to run a CRM report you can probably tell.

This is why sometimes we see early stage hot startups with really high scores and quota attainment metrics. They’re still growing into their TAM.

But don’t get on board too late. Every company runs out of TAM at some point.

You can see the sales orgs with the highest quota attainment also have great product-market fit scores for that same reason.

When researching a new org — or evaluating your current one — make sure you have a detailed understanding of the TAM, including:

• How many prospect accounts are there?
• How are they distributed among the existing team?
• How do they translate into territories (geo, named, etc)?
• How big of a sales team can the current market support?
• Where is the org in growth and getting to that team size?
• What product functionality is being added to increase the TAM?

You need to ask those questions.

Stay Informed and Be Proactive

You don’t have to wait until you’re stuck pushing products to people who don’t need them. Take the initiative now—dig into your TAM, understand how it aligns with your capacity, and ask the tough questions. By staying informed and proactive, you’ll position yourself to thrive even as the market shifts. 

Ask questions. Validate. Verify.

Good luck.