At a June 2007 event in New York City for senior IT and business executives hosted by the Harvard Business Review and Microsoft Corporation, Gulati explained that although companies have a strong incentive to enable their employees to become more customer-facing, many organizations have yet to make any significant moves in that direction.

Despite their claims to the contrary, he said, most companies' employees "are not customer-centric but rather are looking at the customer through the lens of their product."

In nearly every market, even those typically dominated by a single, strong product, companies have seen their market share—and their profits—slip as copycats emerge to slash prices and offer customers more choices, Gulati contended. "Pharmaceuticals, for instance, used to be a wide open space that you could own," he said at the event. "Now, you have four or five comparable products, and with looming threats of regulatory reforms, customers are in the future likely to choose on price."

As a result, companies cannot afford to differentiate themselves on product specifications alone. "How many more blades can you put in a razor?" asked Gulati, as an example. Instead, companies must more closely bind themselves to their customers by better understanding their customer base. Once organizations have determined what their customers want, employees can implement programs and campaigns designed to foster strong relationships with those customers.

Unfortunately, much of the expertise and knowledge about customers and products reside within the minds and PCs of employees, contractors, consultants, and other third parties both within and outside of the organization. Companies typically have not enabled their employees in different departments to easily share information or even to know what other information is available about their customers. Therefore, one of the biggest impediments to employees becoming customer centric is these internal silos. Companies must provide their employees with tools and techniques that enable people in different departments to easily collaborate and share information, so that they can truly align themselves around customers.

Marketers, Gulati contended, are in a unique position as catalysts, and they have the technological tools at their disposal to serve as innovators, strategists, and ultimately integrators. These employees usually have enough clout within the organization to penetrate the barriers that prevent information sharing and to turn their companies toward the customer.

The first commandment, however, is "know thy customer." Casinos in Las Vegas frenetically added theme parks, volcanoes, and top-name entertainers to attract customers, because, as Gulati noted, "there is an extremely high correlation between where they stay and where they gamble." One casino took a different approach and won big, though.

Harrah's Entertainment Inc. says it is the world's largest provider of branded casino entertainment. Gulati said the Las Vegas-based gaming corporation started to gather detailed data about customers' gaming habits to build a database of information that could be mined for differentiating insights. "The traditional idea in Vegas is that customers do not want you to know anything about them," Gulati explained. Harrah's ignored that conventional wisdom, he said.

Instead, it studied customer data from various departmental systems and, with analytics tools, identified a midmarket of customers who gamble as a hobby and have no interest in theme parks or Jacuzzis in their rooms. Using analytics tools across several different data stores, the company was able to empower its employees to successfully build relationships with this profitable customer group. Harrah's employees were able to create and recruit members for a frequent gamblers program that includes customized offers and events.

Harley-Davidson, Starbucks, and Best Buy, too, have seen their businesses thrive by putting a premium on helping their employees understand customers and developing programs that empower employees to build relationships with these customers, according to Gulati.

"Harley-Davidson Motor Company, the Milwaukee, Wisconsin, motorcycle manufacturer, portrays itself as a lifestyle company that sells customized bikes and accessories to enthusiasts," Gulati said. Seattle, Washington–based Starbucks Corporation insists that it is more than a global purveyor of coffee. It offers a coffee-house experience, Gulati added, that includes music, videos, and other forms of entertainment based on an understanding of customers' interests.

Richfield, Minnesota–based Best Buy Company Inc. says it is North America's number-one specialty retailer of consumer electronics, personal computers, entertainment software, and appliances. The retail chain's initial marketing strategy was aimed at the male shopper, but surveys and the analytics showed that "about half of its customers are women," Gulati explained.

In addition, marketers were able to identify several other customer segments that were not being adequately served by Best Buy or its competitors (see the following text table, "Data in, Segments out"). The marketing and sales teams' data and analysis indicated that these customers have different buying habits and shopping needs.

In response to the compiled information, Best Buy changed the shopping experience at those stores where, for example, a preponderance of women visited. Gulati said that at these locations the company quickly added personal shoppers and regrouped products into clusters reflecting the target market's shopping habits. Kitchen and laundry equipment were placed next to each other, because the marketers discovered that such groupings would sell more products. For more details about Best Buy's new tactics, see the following text table, "Best Buy's Six Strategies Based on Data Insights."

Best Buy's analysts also discovered another market the company was not serving effectively. Gulati explained that the retailer attracts small business owners who need help setting up and troubleshooting their computer purchases. In response, Best Buy purchased the Geek Squad, which offers computer-related services and accessories, and made a major push into installation services.

Although Harrah's, Harley-Davidson, Starbucks, and Best Buy differ widely in the products and services they offer, Gulati noted that these four companies have armed their marketers with the technology they need to obtain information from a variety of departments and systems and to build meaningful relationships with their customers.

"There is a wealth of tools available," Gulati said. Customer-focused tools include data warehouses and analytics. Internally, he adds, collaborative solutions let disparate teams communicate with each other and metrics let marketers track how well their innovative programs are working.

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