During latest webinar with Fractional CRO, Paul Albert, we explored some important business terms for designers - Total Addressable Market and Customer Acquisition Cost.
Designers who understand concepts like TAM and CAC can transform conversations with executives — instead of just presenting "good design," you can show how your work grows market potential or reduces acquisition costs by 50%, saving $100,000 in marketing spend.
This shift in communication immediately shows your strategic value and helps overcome the frustration of "design not being taken seriously".
TAM is all possible clients in the world. Understanding TAM helps you demonstrate how your feature or product could tap into billion-dollar opportunities—something executives can't ignore.
Example how you can use TAM in conversation with the executives:
"Based on our research, the total addressable market for this feature is 4.2 million users who both own fitness devices and have pets. With our average revenue per user at $15 monthly, this represents a potential $756 million annual opportunity."
CAC (Customer Acquisition Cost) measures how much a company spends to gain each new customer.
As designers, we have the power to reduce this cost through effective landing pages, intuitive user flows, and compelling visuals. When you can say "my design reduced CAC by 50%, saving $100,000 in marketing costs," you'll have everyone's attention.
"Our redesigned signup form reduced the customer acquisition cost from $61 to $49 per user. With our target of 50,000 new customers this quarter, that's $600,000 in marketing savings from this design improvement alone. We could reinvest some of these savings into testing the new feature we discussed last week."
You can learn more from experts at Deel, Uber, Cleo about business and finance for designers in our Mini-MBA for Designers.
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