Many eukaryotic cells chemotax, sensing and following chemical gradients. However, experiments show that even under conditions when single cells cannot chemotax, small clusters may still follow a gradient. This behavior is observed in neural crest cells, in lymphocytes, and during border cell migration in Drosophila, but its origin remains puzzling. Here, we propose a new mechanism underlying this "collective guidance," and study a model based on this mechanism both analytically and computationally. Our approach posits that contact inhibition of locomotion, where cells polarize away from cell-cell contact, is regulated by the chemoattractant. Individual cells must measure the mean attractant value, but need not measure its gradient, to give rise to directional motility for a cell cluster. We present analytic formulas for how the cluster velocity and chemotactic index depend on the number and organization of cells in the cluster. The presence of strong orientation effects provides a simple test for our theory of collective guidance.