Every company wants to get close to its customers, but wishing doesn't make it so.

New research identifies four stages of customer focus and maps the organizational changes necessary to navigate from one stage to the next.

The Quest for

ustomer Focus by Rahjay Gulati and James B. Oldroyd
For Continental Airlines, the joumey began when the company was emerging from bankruptcy and needed to know more about the profitability of its individual customers. One ofthe first things it uncovered was a service mess that was costing the airline millions of dollars every year. Continental took a systematic look at how passengers were treated when a plane was significantly delayed, when they were bumped from a flight, or during some other unfortunate event. What it found was that compensation was offered on an arbitrary basis by the gate agent, and, somehow, the lowest value customers were, on average, receiving the highest compensation. Worse, some passengers were finding ways to be doubly compensated; a customer who was bumped from a fiight might first approach a gate agent, pick up a voucher for a free fiight, and then minutes later telephone the airline and ask for
HARVARD BUSINESS REVIEW

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|ORE AND MORE CEOs are hoping a stronger customer focus will be the antidote to escalating commoditization pressures. But as the frustrations of myriad companies can attest, getting closer to customers is not just a matter of installing a better CRM system or of finding a more effective way to measure and increase customer satisfaction levels. Tools and technology are important. But they're not enough. That's because getting close to customers is not so much a problem the IT or marketing department needs to solve as a journey that the whole organization needs to make. The companies that do it well follow a surprisingly similar path, passing the same milestones and, in