A CRM system is to some extent a groupware application for managing your business. Groupware is a term used to describe computer software designed to help a group of people work together cooperatively. As such, a CRM helps everyone in the business (especially all those in direct contact with customers) to know the historical and planned activities of the business that involve a specific customer. This is clearly very useful to avoid miscommunications with the client resulting from lack of communication within the business. Everyone in the business can record all of their interactions with a client, helping all their co-workers understand the current state of any issues, sales opportunities, and so on.

Even more importantly, a CRM records all new business leads, and keeps track of promising qualified leads as specific opportunities. These opportunities are recorded with an expected date on which the business will be closed, the current stage of the sales cycle for this opportunity, and the percentage likelihood of closing the business currently assigned to this opportunity.

This information, aggregated across the business, provides a clear view of the organization’s sales pipeline. Visual charts of this information are typically live-linked, making it easy to drill down to view the individual data items that were aggregated to build the chart. Classification of opportunities by sales person, by lead source, or by expected close date is a simple activity, easily performed and fantastically informative.

A properly implemented CRM used by all customer-facing staff will help you track the sales performance of your business more closely with less work. It will also help you see the future more clearly, and plan more effectively.

Just as the customer is the focus that ties all business activities together, your CRM can be the business tool that ties together all your business information, particularly with custom integration into other business systems such as your public website, and the creation of new customer self‑service websites for building orders, creating and reviewing service cases, and managing their own information profile.

Another key area in which a CRM can help greatly is in customer communication. After all, a CRM knows who all your customers are, is connected to the Internet, holds all your key marketing documents in it, and can send (and often receive) email. There are very few tools that are as useful as a CRM when it comes to sending out customer newsletters on a monthly or quarterly basis, selecting only those customers who have purchased specific products, or keeping track of any customers who have indicated they do not want to receive marketing emails.

These powerful capabilities add up to make big changes at most businesses where they are adopted: