When a founder starts their company, they’ve likely already estimated their TAM and found that it’s substantial. However, they may not have thought about how they can expand their TAM. Phenomenon, like the “small market bias”— where you underestimate your potential market size and ignore expansion opportunities—may have led them to miss opportunities. 

Fortunately, increasing your startup’s TAM doesn’t have to be so complicated. 

Simply adding integrations to your product allows you to expand your customer base, increase product usage, and command higher prices. 

We’ll dive into how adding product integrations improves each of these areas and, in turn, your TAM.

Related: How Causal takes their product integrations to market

Expand your customer base

Companies use more software than ever (the average SaaS company uses 130 different applications!), and want their data to sync across their applications in a way that’s seamless. In other words, they want the days of using file uploads or copying and pasting over data to be a thing of the past.

Adding integrations to your product enables you to meet this customer demand and, as a result, allows you to increase your customer base.

Let’s use an example to illustrate how this can play out in the real world.

Say you want to offer HR integrations so that employee data, such as “first name”, “last name”, and “hire date”, can easily populate in your product. Once it’s populated, your product can then automate a certain workflow, such as enrolling employees in a new hire onboarding video series. 

If you start with one HR integration, like BambooHR, you’ll be able to capture a certain percentage of your market, as many prospects may use BambooHR as their HR software. But what about the other group of potential customers who use Workday? Or the next group of potential customers who use ADP? 

Every integration you offer increases your possible customer base significantly and therefore expands your TAM. 

In addition, integrations can help you expand geographically, which also increases your TAM. For example, European companies often use CharlieHR and Personio as their HR software. If you can offer these integrations—among others that are popular in Europe—your product can become more attractive to companies in the region.

Increase product usage

Effective product integrations can keep customers in your platform because the integrations automatically sync key company data—whether it’s HR, accounting, or ticketing data. In addition, your customers can avoid the tedious task of copying and pasting in data, and your product can more easily work to its full potential (e.g. syncing specific fields in real-time can initiate automated workflows in your product). 

All of this translates to higher product adoption and, in turn, higher customer retention. 

Our research only validates this: 53% of organizations cite “a higher customer retention rate” as a benefit of building and offering integrations.

Related: How Apiday sells, markets, and supports their customer-facing integrations

Charge higher prices

Since TAM represents the maximum potential revenue you can generate, price is a key input. 

Integrations add value to your product and, as a result, help you justify charging a higher price to customers and prospects.

You can offer more premium plans that come with integrations, or alternatively, you can price integrations as add-ons or as part of a marketplace. It’s up to you to decide how you want to monetize your integrations; regardless of your approach, offering integrations gives you leverage to charge more.

Note: For guidance on generating revenue from integrations, you can refer to our guide on monetizing integrations.

Grow your TAM with Merge

Every startup needs to think about unlocking new opportunities, reaching untapped segments, and continually expanding their market presence. They can do all that and more by investing in product integrations.

But building product integrations, in and of itself, isn't enough. The way your startup builds integrations is equally important, as it can influence how much your engineers need to focus on integrations—versus your core product.

To support your engineers and your startup’s integrations, you can use Merge—a single platform that lets you offer hundreds of integrations with your product.

Merge allows you to offer integrations across key software categories, from HRIS to CRM to ATS. You’ll also receive robust management tooling for your customer-facing team and 24/7 maintenance support to ensure that you’re able to offer reliable and performant integrations.

To learn more about Merge, and our discounted pricing for startups, you can schedule a demo with one of our integration experts.