by Dave Ulrich, Rensis Likert Professor, Ross School of Business, University of Michigan (Retired), Partner, The RBL Group (dou@umich.edu) and Robert David, Executive Director, CSHRP (robert@cshrp.com)
Gaining market share is a CEO top 2025 priority based on CEO research by Conference Board (see figure 1). The Profit Impact Market Strategy (PIMS) data has shown over the decades that market share highly correlates with profitability.
While we agree with the focus on market share, we believe that customer share is also an increasingly important priority. Market share is about designing and delivering products or services customers buy; customer share is gaining a larger percent of targeted customers’ purchases. Market share comes primarily from product innovation and marketing campaigns to become a product leader. Customer share comes when a firm builds a deeper relationship with targeted customers. Market and customer share both matter because they are the lead indicators of revenue growth and profitability.
Market Share and Human Capability
HR contributes to market share by helping build human capability (talent, organization, leadership, and HR function) initiatives that support the design and delivery of products customers want and need.
Talent. Attracting, incentivizing, upskilling, and retaining talented employees helps build market share as these employees create products and services customers want and need. In addition, HR can also help create a positive employee experience, which is a lead indicator of customer experience.
Organization. Our research found that building organization capabilities of strategic clarity and customer centricity leads to having a clear organization vision focused on products and services that delight customers. We also found that when the external firm brand aligns with the internal culture and employee brand, customers have a better experience. HR builds not only individual competencies (talent, workforce, skills) but also organization capabilities (teams, workplace, culture) that drive market share.
Leadership. Those responsible for leadership development can make sure that the competencies, expectations, and standards for leaders at all levels match the promises made to customers, thus creating a leadership brandand market share.
Human Resource Function. The emerging purpose of the HR function is not just to design and deliver HR practices that impact employees and help implement strategy but to create value for all “humans”. When customers, who are humans, buy more, market share increases.
When talent, organization, leadership, and HR function initiatives focus on customer value and experience, market share increases.
Customer Share and Human Capability
HR can focus on customer share by engaging customers in human capability initiatives, furthering the customer experience of targeted customers. Let us suggest five specific steps HR professionals, and Chief HR officers in particular, can take to increase customer share of targeted customers, which leads to market share and profitability.
1. Identify targeted customers. We have each been asked which of our children we love the most (in front of our children!). The obvious answer is that we love them all equally, but we may treat them differently. Likewise, all customers are equally valued, but each is treated differently. Customer segmentation helps identify which customers to target to increase customer share. We have used figure 2 to work with marketing to identify target and key customers.
The customers in cells 3 (stable key accounts) and 4 (target accounts) are those where customer share matters most. Expectations of these target and key customer accounts become the focus of not only human capability investments that build market share but engagement efforts to improve customer share of these customers.
2. Track customer share. Measuring customer share when engaging with target customers is important. Through AI and other information tools, customer engagement can be measured around specific data: “You spend $100 on the types of products and services we offer, and you spend $30 (30 percent) with us and $70 (70 percent) with our competitors. We hope to increase the percent you buy from us.”
3. Define customer connection. We have identified four ways customers may connect with a firm (figure 3). Transact is paying for product or service. Serve is offering customers support before, during, and after they buy a product or service. Partner is building a relationship where people work together. Anticipate is helping customers envision where they are going and how to get there. The further up the four connection mechanisms, the better the customer experience.
4. Engage with target customers. We have identified three traditional ways of engaging with customers: strategy (include customer centricity as part of strategy statement and goals), product (include customers in product design), and technology (access and use customer data in decisions, particularly with AI). These three engagement mechanisms enable transact, serve, and partner connections. We suggest adding human capability engagement with targeted customers to move to anticipate connection, which creates the best customer experience. This means including targeted customers to participate in:
- Talent decisions such as who is hired for what skills, how rewards are allocated, what training and development occurs, and other HR processes.
- Organization initiatives such as inviting target customers to review values and answer three questions: [1] Are these (our) values things you care about? [2] What would you need to see to know that we live them (better than competitors)? [3] When we do those things you ask for, will you buy more from us?
- Defining and developing leadership by having target customers participate in leadership assessments (720 not just 360) and training (customers co-design, attend, and present in leadership development).
- HR function by making sure that HR priorities align with what matters most to target customers and having HR professionals join sales and marketing on customer visits.
Engaging target customers in human capability efforts focuses the connection on a long-term relationship (customer share) beyond a product or service (market share).
5. Change HR conversations. When HR professionals engage in conversations with executives, they can focus on customer share by identifying overall customer share goals then target specific customers (by name or type depending on the market) and how human capability investments will increase customer share. Similar conversations can occur with investors who will have greater confidence in future earnings (intangible value), communities where the reputation for customer experience becomes widely shared, boards where the customer investment experiences can be reviewed, and with all employees whose attitude delivers customer experience.
Conclusion and Implication
Market share matters as HR professionals design and deliver human capability initiatives that support the creation of products and services customers buy. Customer share also matters: when targeted customers have a better experience by engaging in the creation and deployment of human capability initiatives, sustainable growth follows.
The CHRO role in driving market and customer share growth extends beyond traditional HR functions. By engaging customers in talent, organization, leadership, and HR function initiatives, CHROs help deliver value to all stakeholders and will be a defining factor in aiding companies to become market leaders.
