J. W. Nordstrom revolutionized the retail clothing business with a simple thought: if he treated customers better they would become better customers. As obvious as this was, few companies have tried to handle customer service as well in the decades since Nordstrom's founding, and, perhaps, no company has done it better.

If you are in an industry that has been a step removed from your customer, the advantage of great customer service may have eluded you--until now. Changes in technology are making the customer service call center one of the greatest opportunities for competitive advantage, for you or for your competitors. As technology blurs the distinctions between service, sales, and marketing, the call center is poised to become the primary touchpoint of your organization. It will be a place where your customer meets your company, and you meet the customer. If you adapt your call center correctly, your customer will benefit--and your back room will become your front line.

The change will not be easy or immediate. Moving from a traditional, telephone-based environment to one that integrates faxes, e-mail, the Web and advanced information systems will be an evolution. It will require technology work on the back end so you can capture all your customers' information, so you can instantaneously make information available to your call center agents, and so you can distribute information throughout your company. You will also need to make organizational changes to ensure that your sales, marketing, customer service, product development, and technology organizations work together.

But the effort will be worthwhile. You will retain more customers, and a study published in the September/October 1990 Harvard Business Review showed that keeping just 5% more customers will double profits. Your ability to tailor products to individual customers will also increase, attracting new customers.

At one telecommunications company where I worked, we installed a system to give agents the caller's complete records when they answer a call to the customer service hot line. The system not only lets an agent answer questions quickly, but an expert system guides the agent to offer appropriate discount plans. This approach increases sales--while helping customers.

Electronic bookstore Amazon.com contacts customers by e-mail when new titles become available by authors they like. Again, customers appreciate the service, and Amazon sells books. Lots and lots of books.

To start transforming your call center, you need to do two crucial things--augment information tools and expand access to information.

Augmenting Information Tools. Providing tools is important because call-center employees are changing the way they use information. In the past, they had access mainly to structured information--master lists of products, etc. Now, increasingly, they need also to draw on unstructured information--such as sales documents' suggestions on product configurations. Carefully combining the two types of information can: cut sales and support costs; reduce the amount of bad information provided to customers; and let a company use service to differentiate itself from the competition.

An example: A telephone-equipment manufacturer uses expert system software to help agents diagnose product problems. The software draws on knowledge collected from experienced agents, walks agents through case-based reasoning, and supplies on-line documentation. Surveys showed a 23% increase in customers' views of agents' competence. In addition, reports were automatically sent to product managers on products generating problems.

Expanding Access to Information. Companies can improve the use of information just by giving more employees access to things like production schedules. A large marketing firm saw significant benefits from offering its field sales force the option of submitting orders, checking their status, and obtaining their weekly and monthly reports through the Internet. These applications not only made the field's information more timely, but also slashed calls into the call center and eliminated express mail costs.

Companies can also relatively easily extend access all the way to customers. A maker of personal computer accessories greatly increased productivity when it let customers electronically log their own trouble tickets or troubleshoot their own problems. Within a year, 17% of the customer interactions were submitted by electronic mail, with questions answered within two business days. About 10% of customers solved their problems themselves--generally saving time in the process--by using a knowledge database the manufacturer placed on the Web.

Even if you're not inclined to use these two approaches to rethink your call center operations right now, you soon won't have a choice. Technologies such as the Internet are forcing companies to improve their handling of customers, who now have more options because they have more information on competitors' products. Technology also makes it easier to complain about problems--as Intel learned when it tried to ignore a minor problem with its Pentium chip two years ago. Mark Twain once said, "Never pick a fight with a man who buys his ink by the barrel." Well, the Internet has given every customer a bottomless well of digital ink.

The digitizing of information and the creation of public computer networks are also threatening to swamp you with information about customers. Executives say that they don't come close to gathering all available information on customers, and don't even do a very good job of using the information they do have. Now they--and you--have to deal not just with phone conversations but also with heavy volumes of faxes, e-mails, and responses from Web sites.

The tidal wave of information will keep growing and moving at you. So, even if you just want to stay in place, you'll have to paddle harder and harder.

Mr. Rappaport is a partner with Diamond Technology Partners. He can be reached at rappaportd@diamtech.com.