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FEDERAL STATE EDUCATIONAL INSTITUTION

OF HIGHER EDUCATION

NATIONAL RESEARCH UNIVERSITY

HIGHER SCHOOL OF ECONOMICS

Saint Petersburg School of Economics and Management

Department of Management

Bachelor's thesis

In the field 38.03.02 `Management'

Educational programme `Management'

Innovations in customer relationship management systems and their impact on business processes

Andreev Lev Anatolievich

Galperin Maxim Lvovich

Saint Petersburg 2020

Table of contents

Abstract

1. Introduction

1.1 Overview of the field

1.2 Goals of the CRM systems

1.3 Functions of the customer relationship management

1.4 Research questions and objectives

1.5 Relevance of the Research

2. Theoretical foundation

2.1 Preamble

2.2 Methods of the literature review

2.3 The history of CRM

2.4 Artificial intelligence in the customer relationship management systems

2.5 Cloud technologies in the customer relationship management systems

2.6 Deep personalization

2.7 Chat bots integration

2.8 Integration with the Internet of things

2.9 Mobile applications

2.10 Types of the customer relationship management systems

2.11 The development of the customer relationship management systems

2.12 Conclusion

3. Statement of the research questions

4. Methodology

4.1 Research Design

4.2 Data sources

4.3 Sample

4.4 Analysis methods

4.5 Anticipated results

5. Description of findings

5.1 Analysis results

5.2 Hypotheses testing and answering the research questions

6. Conclusion

6.1 Contribution of the results

6.2 Limitations

6.3 Future research

References

Appendixes

Abstract

The customer relationship management systems (CRM systems) are evolving very dynamically, gaining more features and innovations that are designed to improve the process of analyzing the contained data and communication with the consumer at the end of the day.

The goal of this research is to find out what innovations in the sphere of customer relationship management systems have the most positive influence on business processes and if there are the ones that affect negatively on them.

The general way of data collection and analysis includes both primary and secondary data. The first stage of a primary data collection is a set of in-depth interviews with the owners or representatives of businesses in a format of free answers to the questions. The goal of this stage is to find some common theses and make conclusions based on them. The second stage of the research is quantitative: a set of questionnaires with the business owners in the format of evaluating the elements of using the customer relationship management systems from 1 to 5 and «YES» or «NO» answers. The results are analysed within SPSS.

During the process of conducting this research, the authors have identified the set of innovations that have the most positive effects on particular business processes and compared them with each other. The innovations have been divided by their efficiency in terms of different business processes.

The researchers suggest that many successful businesses are exploiting the most efficient innovations in their customer relationship management systems to ease the process of saving and analysing the data and communicating with the customers.

This research is going to help companies to apply only useful technologies and techniques and save time and money on the ones that are useless or harmful. It can be also useful to the companies that develop the third party customer relationship management systems by giving an understanding of the trends of this industry and the features that are worth implementing. Another benefit that is brought by this research is covering the gap in the scientific literature about the power of the efficiency of the customer relationship management innovations.

KEYWORDS: customer relationship management, CRM systems, innovations, business

1. Introduction

1.1 Overview of the field

It is no secret that today the world economy is going through hard times. Businesses are seriously affected by decreasing incomes and the daily changing needs of customers (Starostina U. 2020). In the current environment, organizations have to analyze customer's needs . The most important problems that businesses have already faced or may face are the decline in demand for services and goods, the departure of consumers, and the decline in profits. Customers have become more attentive to count money, save and bargain. Because of this, one of the most important tasks of the owner is to save consumers, reduce costs and increase the efficiency of the business processes. The strategy of successful further development and existence of modern companies becomes management with higher efficiency of relations with consumers (Axelus, 2020).

Organization's focus on improving customer relationships is driven by several trends, including increasing competition, increasing customer demands for service and product quality, decreasing the effectiveness of traditional tools, and the emergence of new technologies for interacting with consumers and operating branches of the organization. A good knowledge of their customers and satisfaction of the requests and needs of each of them can allow the organization to get opportunities to sell services and products and become a major factor in the development and source of competitive advantage of the company. And luckily significant progress in technologies is ready to help businesses and allows them to adapt to new customer needs faster, more correctly and cheaper. These trends prompted the authors to study and research issues related to improving CRM systems.

1.2 Goals of the CRM systems

As an instrument for increasing the business efficiency and profitability every customer relationship management system has its purposes. August S. wrote that main goals that business owner want to achieve are the following (August S. 2017):

1. Improve control over managers in order to measure the productivity of each one and decrease overdue deadlines which is very important in such business processes as sales and customer service. Also, the CRM system should control what particular manager did for the company in order to pay bonuses or point out his mistakes.

2. Make the working process easier and faster by combining functions of different applications and systems in one program. Customer relationship management should replace several programs on the managers desktop, such as Mail app, messenger, daily planner, tracking software, calls, call log.

3. Systematize the information about the clients for easier switching them between managers. There are a lot of ways how to gather and store the information about the clients, it could be either a MS Word or Excel documents but in this way the algorithm of systematizing data will be unique for every manager.

4. Systematize the sales funnel in order to measure the effectiveness of every sales manager and understand what aspects in the algorithm could be improved.

5. Facilitate learning of newcomers, because he will have to understand how to work with only one program which could also be familiar to him from the previous place of work.

6. Collecting statistical data about a company's performance is a kind of audit option. Real numbers should be available anytime for rapid tactical and strategic changes and customer relationship management systems should be able to show it.

This is what business owners want from the customer relationship management system and to achieve these goals the developers of the customer relationship management systems implement in their software certain functions.

innovations relationship management business

1.3 Functions of the customer relationship management

During the last decade, the popularity and necessity of the customer relationship management systems among very different spheres of business has been growing very rapidly. More and more companies are implementing the CRM systems into their communications with customers in order to perform better in the conditions of the market where all the competitors are already using the customer relationship management systems.

According to Robert Heger, the customer relationship management systems allow businesses to gather, keep and analyze all the needed information about their clients (starting with their names, gender and contact info and ending with the frequency of visits, loyalty to the brand and preferences) and analyze this data in order to improve the algorithm of communication with the customers and the business process in general. The most important main functions are represented in the following list.

1. Managing contacts with clients either by automatic phone calls, e-mails or messages via social networks. This function is probably the main for B2C business because of the huge number of clients.

2. Managing sales and revenue from sales by connection with software from the accounting department.

3. Integration with other systems such as logistics and shipping services to automate counting during the negotiations which could be fully done by software.

4. Data storage is also a necessary feature of modern CRM systems which is used to easily save, find and work with databases from every computer on organisation and at the same time avoid data thefting.

5. Planning function is also important because it helps to operate with future deals and plan tactical and strategic decisions by understanding the needs of customers.

6. Creating the reports which could be available in several minutes is another feature that could surely give an advantage to modern business.

All these features and functions of customer relationship management systems have already become a basis of modern business software. The real impact of such systems on business is impossible to be measured, because now business can not be immagine without a CRM system.

1.4. Research questions and objectives

As the researchers wrote before, the impact of customer relationship management systems is almost impossible to be measured because it requires perfect conditions where similar companies differ only by the existence of a CRM system. By the way, it's already clear that such software gives an advantage for the business. But what is the difference between for example two different customer relationship management systems? Of course, features and functions. every new function that appears in the software could be called as innovation. During the process of analyzing existing literature and searching for research papers with close topics, the authors discovered that till now there is lack of information about what features and innovations give the business certain benefits. How a specific innovation in a CRM system can affect a specific business parameter is also not studied at the time of writing this work. At the same time, the authors made sure that there is enough available information about the history of CRM systems, their features and modern innovations used in them. Thanks to this, the Authors are confident that by researching existing materials and analyzing primary data, they will be able to write a work that will not only have research value but will also be useful for companies to optimize and perfect their strategies in customer relations.

The authors of this research have decided to find out, what innovations in the sphere of customer relationship management systems bring the most profitable result (in other words, what innovations in CRM systems are the most efficient), and if there are innovations that came out to affect negatively on the process of communicating with clients and the business processes in general. Therefore, the research questions of this graduate paper are the following:

1. Which innovations from the history of customer relationship management are the most important part of the modern customer relationship management systems?

As authors are conducting the in depth interviews, they are going to ask the respondents about innovation from the past that is the main part of every modern customer relationship management system.

2. What innovations are the most demanded among the users of the customer relationship management systems?

Authors are going to measure the demand both in qualitative and quantitative part by asking which innovations are implemented in the CRM system of a particular business.

3. What innovations in the customer relationship management systems have the most positive effect on business processes?

Authors are going to measure this parameter by counting respondents who answered that certain innovation helps their business.

4. What innovations can have negative effects on business processes if any?

This research question is going to be answered by measuring the negative points of the particular innovation during questionnaire answering.

All these research questions are developed by authors on their own. Previous studies did not cover these topics.

In order to answer the research questions the authors came out with the following hypothesis on this question:

1. The innovation from the history of the customer relationship management systems that forms a basis of modern customer relationship management systems is computerization.
Computerization which also could be called as innovation of a certain period in CRM system development forms a basis of the modern customer relationship management system, and it could not be immagine without computers.

2. An implementation of artificial intelligence and chatbots into the customer relationship management systems has the most positive effect on the process of communication with the customers.

As a modern innovation, artificial intelligence has the biggest impact on arranging the business processes especially in the process of direct communication with customers.. At the same time chatbots are also an innovation that certainly helps the business to increase effectiveness on the stage of texting and mail correspondence.

3. The most demanded innovation in customer relationship management is artificial intelligence based on machine learning.

Business owners are ready to pay money to have an artificial intelligence in their customer relationship management systems and already have such functions implemented.

4. There are innovations in the customer relationship management systems that have negative effects on business processes.

business owners as well as CRM systems users are sure that some new features have a negative effect on their business effectiveness and could be improved.

5. Integration of a mobile version of a customer relationship management system has the most negative impact on costs of using the system among all researched innovations.

The price of having and using a mobile version of the CRM system is high and this feature is more expensive than other innovations which the authors are talking about.

All these hypotheses would be proved or disproved by authors later in the research. At first in anticipated results researchers are going to answer research questions by their own thoughts based on analysed literature. Secondly, in the module findings they will write about real output of their research.

1.5 Relevance of the Research

The CRM systems are getting better and more accurate as the technical progress and management techniques improve. Therefore, the companies struggle to implement more useful innovations in their customer relationship management systems in order to improve their relationship with their customers compared to the competitors. The technological, management and marketing progress offer a wide range of innovative features to add to the CRM systems.

As the researchers, the authors are interested in innovations that are able to increase the productivity and effectiveness of customer relationship management and at the same time which of them has the opposite effect. Almost all of them are designed and developed for better understanding the habits and behavior of the particular group of customers in order to increase the efficiency of the selling department. But it is also clear that not everyone successfully performs its function. For business owners and top managers of the companies it is important to pay only for the functions that are worth it. That is why the fundings of this research would be useful for those who are paying money for having a particular innovation in their customer relationship management system. Moreover the fundings would help to deeply understand how important is the CRM system for a company and why now it looks such as it is. The purpose of this research paper is also to provide an opportunity for the businesses to improve their ways of communicating with the clients by implementing only the most efficient and useful innovations into their CRM systems. The companies and managers are going to be able to save a lot of time and, therefore, money on ignoring the innovations that bring limited usage or even can harm the business processes. This could improve the companies positions in the competitive environment and make clients' experience of relationship with the companies more pleasant.

2. Theoretical foundation

2.1 Preamble

This research paper is focused on the topic marketing information systems: customer relationship management systems. In order to find out, what spheres of this topic are already covered by the existing researches and what spheres of the topic of the customer relationship management have not been studied deeply enough and are yet to be researched, the authors will have to conduct a literature review. During the Literature reviews authors will refer to the reliable Journals, authors of the books and scientific papers. Reliability of every source will be checked

2.2 Methods of the literature review

The process of analyzing literature is very important for the authors. Searching for reliable sources is a time consuming procedure and that is why to do this authors came up with the idea to automate this as much as possible. They believe that by going this way the most relatable and reliable articles are going to be found, reviewed and analyzed. Therefore, the authors searched the articles through `web of science' using the QUERY: ((customer relationship management) OR (crm) AND innovation* NEAR performance*). Authors used these keywords because they are related to the research question and topic. To join these keywords together, they have used such Web of science operators as OR, AND, NEAR and *. These ways to connect the keywords have helped researchers to find the most relevant articles among all the databases of Web of Science. As a result, 312 related articles were found. The major categories of the articles are: social sciences, science technology and arts humanities. To the query, we have applied several filters. The first one is searching in the headers of the articles, and the second one is articles for the last 5 years. This is because of the requirements for the bachelor's thesis.

In order to visualize the key words of existing information authors decided to use VOSviewer where they build this infographic. They have not replaced the keywords, because all of them were unique from the beginning. Researchers decided to set 16 as the minimum number of occurrences because it gives us the optimum final number of clusters (69).

2.3 The history of CRM

Authors believe that analyzing the innovations of customer relationship management systems is impossible without knowing the history from the very beginning. That is why the first chapter of literature analysis is going to be devoted to the process of development of the CRM systems through aeges.

The history of customer relationship management is strongly connected with the personality of John Henry Patterson who started as an ordinary businessman and now is considered to be a father of CRM (Encyclopжdia Britannica. February 29, 2020).

It all started in 1879 when James Ritty invented the first cash machine. Five years later he tried to make it usable, start mass production and sell, but did not succeed. After that an American businessman John Henry Patterson bought the controlling stake of the company “Ritty”.

As soon as Paterson knew about the cash machine, he understood that using such innovation in commerce will decrease losses of unearned revenue. John believed that this device will have the main role in trade and the whole business world (Bellis, Mary. 2020, February 11).

After a successful deal Patterson renamed the company into a “National Cash Register Company” or “NCR”. The first cash machine was fully mechanical and only in 1906 engineers of the NCR developed the first machine with the electric motor. Soon the factory got a huge number of orders and in 1911 the company sold the millionth cash machine. At that moment they covered 95% of the whole market of cash machines and were deeply integrated into the business world (Encyclopжdia Britannica. February 29, 2020).

Apart from the production and selling cash machines Patterson made a huge contribution to the business algorithms all over the world. He developed and successfully implemented innovative methods of organizing sales, such as separating the territory by regions in which the sales were under control of the certain specialist - the first geomarketing system. He also implemented the point system for evaluation of the effectiveness of sales managers - now it is known as a key performance indicators system or KPI (Encyclopжdia Britannica. February 29, 2020).

He also wrote the first guide for sales managers where he included the stages of selling process control, the effectiveness and lots of other things that modern CRM systems are based on.

Another important person in the history of customer relationship management is Jam Handy who as an employee of Chicago Tribune researched buyers behavior. The result of his work was a new model of advertisement which is based on the idea of what the product gives to the client. This concept is still used by marketing specialists all over the world (Klientiks, 2017).

The customer relationship management systems have emerged as a tool to help employees (agents or sales managers) cope with large volumes of work, which in turn was the result of a rapid increase in the number of companies producing goods and services and increasing competition. This period in history coincided with the end of the 19th century, the beginning of the 20th century. Information about a large number of meetings with clients, as well as information about the clients themselves, had to be structured and stored somewhere. So, in 1947, there was a notebook with a schedule for registering plans for business meetings and events - "Day-Timer". It was invented by Morris Perkin, a lawyer from the state of Pennsylvania (A. Kudinov, 2008).

"Day-Timer" informed about upcoming events, performed the function of a detailed time planner and a diary in which the planned and completed work was carried out. This system could already be attributed to the prototypes of modern computer CRM solutions. Since 1952, the daily "Day-Timer" has become widespread. In the 60s of the XX century, it began to be used outside the United States, in the United Kingdom and Canada. The Day-Timer company still exists and continues to produce tools for organizing and scheduling time (A. Kudinov, 2008).

Arnold Neustadter was even closer to modern computer technologies. He invented the 360-degree rotating Rolodex file system, which until the 70s became the most popular tool of recording business contacts. The business card reader became a prototype of CRM because it allowed you to structure data, even in paper form (L. Zuckerman, 1996).

In 1970, the first computers with silicon chips began to appear.

Previously, the production of goods and the provision of services was very similar, customers did not choose anything and bought what they had. Until the 80's and the advent of CRM, few companies tried to retain their customers, because with their resources and capabilities, they could always change the market if necessary.

The number of specialized CRM (focused on sales management) by the early 80's could be counted on the fingers. But time passed, and the development of computer technology has significantly reduced the cost of computing operations.

In 1987, Pat Sullivan, founder of Contact Software International and SalesLogix Corporation, released the first commercial contact management software, called "ACT!".

ACT-before reincarnation was translated as Automated Control Technology. Later, the system received a different translation - Automatic Contact Tracking (contact management system). The main purpose of the system was to organize and manage sales and customer interaction processes. The program allows you to track the development of customer relationships, analyze information for more effective sales and customer loyalty development (C. Conner, 2014).

In the mid-80s, the era of marketing began. It was the marketers of insurance companies, banks, and later industrial companies, pharmacy, and retail who were interested in using and developing customer relationship management.

In 1990, innovative sales Management systems combined with contact management systems such as Saratoga Systems and Brock Systems appeared on the market. These systems automated the standard sales process, allowing you to control the stages of transactions and monitor their effectiveness (CRMSwitch, 2013).

In 1993, Thomas Siebel founded Siebel Systems. Siebel spent almost all of his time communicating with customers and understanding what they need. as a result of painstaking research, a program for trade and sales automation appeared, and later for marketing and support automation - Siebel Sales Enterprise-Siebel CRM .

In 1995, the term of customer relationship management was introduced. It was first used in Siebel Systems to reflect the specifics of this type of software product.

In contrast to the previous systems of working with clients, the new one began to fight for customer loyalty. Now the information about the client was not only collected, but also used. It was at this time that various promotions began to be practiced: giving gifts to customers, discount discounts, and so on. Business began to understand that customer loyalty is the most important thing (B. Daley, 2015).

In 1997, CRM systems were replaced by ERP systems - enterprise resources planning systems. This type of software automated the business processes of production planning, shipping, logistics, finance, etc. The CRM system was now one of the ERP modules.

In 1998, Siebel bought Scopus, adding the best solution on the market for call centers to the most powerful sales automation platform. The main focus on the market is shifting to complex solutions that cover not only the sales area, but also the service delivery area, as well as marketing activity.

At the same time, SAP is aggressively invading the CRM market by establishing SAP Labs specifically for research and development in this area.

From 1993 to 2000, Thomas Siebel ran one of the most profitable companies in the United States. The company's share has reached 70% of the CRM market. Software sales in 2001 amounted to more than $ 2,000,000,000 (S. Dolan, 2006).

In 2002, Microsoft entered the CRM market with the Microsoft Dynamics CRM solution. The functionality of the solution was initially not too broad. The main advantage of the system is integration with MS Outlook and MS Office. Microsoft's brand awareness in the market was easier when the corporation took the business application market seriously, adding Microsoft CRM to the Axapta and Navision ERP products. The company's strategy to combine these solutions in the future under the Dynamics brand and integrate solutions with office products has fully justified itself. As a result, the corporation managed to become a leading player in the CRM systems market (N. Wright).

In 2004 another important event occurred: the open-source SugarCRM CRM system appeared on the market. SugarCRM was founded as a commercial startup on Sourceforge.org. later, a cloud version of this product appeared. Free open source required a large investment in support and service. The salaries of programmers who are able to efficiently support "free" software have been and remain consistently high (CRMSwitch, 2014).

In the first half of 2006, Oracle and Siebel offices merged completely. By this time, several large-scale projects on the Oracle CRM platform had already been announced. The acquisition of Siebel pushed Oracle far into the CRM market.

In 2007, the company Salesforce.com launched Force.com, a cloud-based development environment. This platform allowed the company to build an ecosystem of SaaS partners, as well as to break the stereotype that cloud solutions are difficult to customize (B. McCarthy, 2016).

During 2008-2010, Early social media and CRM began to integrate all departments. Social media marketing began to attract the attention of organizations, as the use of Facebook, for example, began to spread rapidly around the world. By 2008, Comcast was using Twitter to interact directly with customers. Also, the shoes company Zappos uses Twitter to engage the customer in communication with the brand. And, by the way, more than 75% of all purchases in Zappos are repeated (Bullas J. 2009).

Companies have begun to recognize the power of social media to attract customers. On the other hand, customers began to see ways to use the world wide web to express their thoughts about companies. This led to the fact that CRM system providers began to develop and sell solutions that could integrate with social networks (Davis C. 2016).

Cloud technologies are becoming integrated into CRM systems, allowing companies to pay for usage without purchasing infrastructure. This made CRM more accessible to different types of organizations.

Companies fully accept the strategic importance of CRM, and the systems themselves are becoming more flexible and faster. Organizations of all sizes, including small businesses, are beginning to implement CRM solutions (Moyse I. 2015).

And it has already become quite clear that all divisions in the company should be involved in customer relationship management activities, not just a separate department. It also became clear that management, employees, and technology were all in demand to work together to achieve the success of the CRM.

In 2011-2012, there was an Increase in the social component. Social CRM was actively used in B2C but not in B2B. It has become much more integrated into customer relationship management systems and approaches. Presumably, he held 8% of all global expenditures on CRM in 2012, with the 2010 year this figure doubled, if you believe Gartner. In absolute terms, the amount of annual spending on Social CRM represents $ 1 billion, which can be compared to the total spending of 12.9 billion during 2012. Most of it was used in companies that are focused on working with end customers, and only 10% was used in B2B. It is believed that social CRM will have a very strong penetration in organizations (Kanaracus C. 2013).

In 2013-2016, mobile portable CRM was actively developed. Gartner predicted that CRM costs for businesses will increase worldwide from $ 12.9 billion in 2012 to $ 18.4 billion in 2016. Cloud CRM trends were also predicted to reduce the total cost of ownership of the system (Thompson E. 2013).

Crowdsourcing in the near future will become a means by which companies will get new ideas, come up with new ways to solve problems. This will increase potential innovation within the organization. Customers will drive innovation in a way that they have never been able to do before, opening up CRM to new areas of business that it has never touched so much before (Aquino J. 2013).

Among experts, it is customary to highlight the latest stage in the development of CRM systems -- the era of social CRM, when systems must collect complete information about customers, including using the social network API. Above, we explained why this is not really a trend. In general, talking about trends in the CRM market in general means simply forgetting about the millions of micro, small and medium-sized companies that use CRM systems as a working tool, and do not seek to build their own traps for personal data of customers (Chaney P. 2013).

A more distinct trend is CRM's work with big data and IoT, for example, in retail. The authors are going to write about it later.

After analysing all literature about the сustomer relationship management systems development, it is necessary to list all stages of this process. This also could be called as a list of “innovations from the history”:

1. Cash machine

2. System for evaluating sales managers

3. notebook with a schedule and clients list

4. Rolodex rotating file system

5. Computerization

6. Automated system to control the stages of transactions and monitor their effectiveness

7. Storage the information about the clients

8. Enterprise Resource Planning system

9. Integration with MS Office

10. Open source system

11. Social media integration

This list of the innovations would be shown to the respondents of in-depth interviews in order to measure their impact on the modern customer relationship management system.

2.4 Artificial intelligence in the customer relationship management systems

When speaking of the innovations in the sphere of informational technologies, which the customer relationship systems are related to, the first thing that comes to mind for a lot of people is artificial intelligence. In the modern world artificial intelligence is one of the most popular and fast-growing technologies. One of the reasons for this and one of the main advantages of artificial intelligence is the fact that this technology can be applied to a very wide set of different spheres, industries and businesses and it can bring benefit to all these spheres of activity (Buchanan, 2005).

An artificial intelligence can be defined as a computer technology that imitates the cognitive activity of humans, completing tasks that simple computer algorithms are incapable of. Artificial intelligence includes a lot of different methods, and some of them fit particular industries and businesses more than the others (Chagas, B. N. R., Viana, J., Reinhold, O., Lobato, F., Jacob Jr., Antonio F. L., 2018).

There is a great variety of industries that have already successfully implemented artificial intelligence in their business processes in order to achieve better results. One of the great examples is the usage of an artificial intelligence in the sphere of robotics. The integration of robotics and artificial intelligence creates a new sphere of intellectual robotics. The artificial intelligence algorithms allow robots to act not just as scripted by a programmer, but analyze the environment and act based on the circumstances. This is especially useful in coordinating in space, modern robots are able to analyze the obstacles around them and avoid them (De Sutter, Matton, Laukens, Van Rijsselbergen, Van de Walle, 2011).

Among the most popular subsets of artificial intelligence is machine learning. This is the set of methods of artificial intelligence the main goal of which is not a direct solution of a particular task but learning and educating during the execution of similar tasks. This approach allows the computer algorithms to get better in performing their purpose with time. The more data an artificial intelligence based on machine learning gathers and processes, the more accurate and correct results it gives as an output (Florez-Lopez, Ramon-Jeronimo, 2009).

Artificial intelligence based on machine learning is a very popular and useful tool when it comes to the analysis of big data. Humans are not capable of analyzing such large arrays of data, and simple computer algorithms cannot identify patterns and correlations in these data arrays. Therefore, artificial intelligence based on machine learning can be very helpful in these circumstances due to the fact that it can learn to identify these patterns and correlations just as good as humans and even better, but it also has the computing power of the modern processors that are unavailable for human's brain (Guo, Niu, 2007).

When it comes to the customer relationship management systems, artificial intelligence is a quite new trend. It is needed to analyze big arrays of data in the industry of customer relationship management which are the perfect circumstances for implementing artificial intelligence based on machine learning. This technology can be used in analyzing the preferences and specifics of the customers of the particular business and generate the best offers for these customers based on the gathered and processed data. Artificial intelligence based on machine learning is also capable of distributing the customers into groups based on the unique characteristics of every single client, making it easier and more convenient for the analysts and the marketers to make conclusions about the audience of the particular business and the preferences and specifics of the segments of this audience (Sheshadri Chatterjee, Soumya Kanti Ghosh, Ranjan Chaudhuri, Bang Nguyen, 2019).

2.5 Cloud technologies in the customer relationship management systems

Implementation and maintenance of a customer relationship management system is associated with certain costs. Besides the obvious costs of development and support of a customer relationship management system (which includes mostly the salaries of the team of the developers) and the salaries of the operators of the system, the software of a customer relationship management system also requires a physical computing power to be placed in. Many big companies are using their own expensive and powerful servers which require the salaries for the server administrators, square for a server to be placed in and the technical maintenance of the computer parts for it. While large businesses and companies can afford such activity, for many small and medium businesses placing the customer relationship management on a server can be too expensive and irrational costs and spending (Amin A. Shaqrah, 2016).

This problem affects not only the customer relationship management systems, but all other business software that solves the business needs and, therefore, requires the server to operate correctly. In order to solve this problem, the innovation of cloud technologies has been invented. The brief description of this solution is that the small businesses are using the computing powers and storages of the large data centers for a fee. This is called “cloud servers”, because the business is not required to have its own machine but is using another one on-line (Weiss, 2007).

Many modern businesses are using the technology of an on-line cloud customer relationship management system. These customer relation management systems are usually located in a web space, sometimes they can also have the desktop and mobile applications.

The advantages of such a solution are the following:

1. It saves the business a lot of money, because there is no need to buy a server, pay more for the rent and pay salary to a system administrator. Instead, the business only pays a small subscription fee to the company that owns a cloud server.

2. Using a cloud server for a customer relationship management system is much more convenient for a small business because it is a ready-to-go solution that already includes most of possible features of a customer relationship management system. Many of the customer relationship management systems that are located on the cloud servers already include many other innovations that are described in this research, such as artificial intelligence, chat bots, deep personalization and others.

3. The solution of placing a customer relationship management system of a cloud server saves not only money, but also the time that can be spent on a development of the business's own customer relationship management system, which can possibly take months of work, and sometimes even years. In the case of the cloud solution, the business receives an already developed fine customer relationship management system that is ready to use from the very beginning (Oredo, Njihia, 2014).

However, despite all the advantages that have been stated above, the solution of placing a customer relationship management system on a third party data server can also suffer from some cons. The most important of them is the fact that the business is letting its data to a third party company and has no control of what is happening to this data there. It is one thing when we are talking about other software that is placed on the cloud servers, but the customer relationship management systems are subjected to this disadvantage much more, because they contain the personal data of the business clients. A company that owns the servers on which the customer relationship management systems are placed can secretly use the data in its own interests, or in case if the company is completely unscrupulous, it can even sell the data about the clients to the competitors of a business that pays for using the server and the storage. Even if the company is not unscrupulous, the question of safety is still an issue of safety and security. Unlike the private servers of the small businesses, the companies that provide the cloud server solution for smaller businesses are more often the target of hackers. Even though the security measures in these companies are of a much higher level, it is still an issue for the small business that it cannot control what is happening to its data (Lin, Chen, 2012).

The question of customer privacy is an important issue when we are talking about the customer relationship management systems, and especially when they are placed on the servers of a third party company. In the modern world the informational technologies have a great influence on our lives. Even though they make almost every sphere of human's life easier, they also come with some pitfalls, one of the most discussed of which is a problem of privacy. More and more often it is possible to find another scandal with the personal data leak in the news. Of course, in order to stay competitive, companies that deal with personal data of their customers are trying to improve their security systems from hackers and accidental leaks. The fact is almost every company in the twenty first century is gathering and analyzing the personal data of the customers: from small online souvenir shops to the IT giant such as Google, Microsoft or Apple. If small companies are interested (in general) in keeping the consumer's private data safe because of the enormous fines that almost every developed country has in its laws, huge corporations can easily afford paying these fines. Still, they also struggle to preserve the personal data because leaks deal a great damage to the reputation of a big company (Syam, 2017).

This has a lot to do with the customer relationship management systems, because, as it has been already said before, these systems' purpose is to collect and keep the information about the clients of a company. Therefore, the CRM systems have to evolve in order to protect the data they contain, which means that this is one path for innovations in the sphere of customer relationship management. The companies are interested in investing money into developing their CRM systems to keep the personal data of their customers safe to avoid enormous fines from the government and reputation losses (Gurau, Ranchh, Hackney, 2013).

Therefore, if the business decides to choose a cloud based customer relationship management system to integrate into its business processes, it has to approach the question of choosing the company that provides such customer relationship management system very carefully in order to avoid possible problems with the security of the data of the business and the personal data of its clients.

2.6 Deep personalization

One of the purposes of using the customer relationship management system is to define the target audience correctly and apply specific marketing tools to the different segments of the target audience by making personalized offers, advertisements and other marketing features. The traditional customer relationship management systems support the division of the clients of business into groups based on the preferences of the customers, their social status, age, gender, income level, etc.

The personalization of a customer can be divided into two general segments. The first one is shallow personalization. It implies the general information about a customer, such as his or her name, contact information, age, etc. The shallow personalization data can be used not only to account the customers of a business, but also to do some personal customizations. For example, if a customer relationship management system is integrated with the web site of a company, the data of shallow personalization can be used in order to customize the web pages for a particular customer. It can be his or her name as a greeting on a web page, or the contact or buying forms prefilled with the client's name, address, email and phone number. Such customizations make the customer's experience with the company more pleasant and convenient. Of course, shallow personalization is very important for every business, however, it is not enough to really understand what the clients need and develop a better marketing strategy (Srivastava, Jaideep. 2002).

The solution for this problem is the methods of deep personalization. It implies the collecting, containing and using the very big arrays of data for each particular client. The deep personalization data includes not only the general information about the customer, but also such important things as his or her behavior on the web site and during the communication with the company, up to the movements of cursor or the time it takes for a customer to read a particular block on the web site. Such deep research of each client allows the business to identify the behavioral pattern of the customers, split them into groups based on their behavior. The practical usage of such a large amount of data includes the opportunity to personalize the customer's experience of the relationship with the company as much as it is possible. For example, if the deep personalization customer relationship management system is integrated with the web site of the company, it is possible the dynamically adapt the entire web page to the particular customer based on his or her behavior in order to increase the chances of making a target action, which can include purchasing a product or leaving his or her contact information (Jackson, 2007).

The using of deep personalization usually includes another innovation that has been already stated above. This is an artificial intelligence based on machine learning. The tandem of these two innovations is explained by the fact that deep personalization implies large arrays of data that are too big to be analyzed and interpreted by human employees. Therefore, the machine learning based artificial intelligence is needed to analyze the data, make conclusions of it and adapt the customer's experience in communicating with the business to the customers own personal preferences and behavioral patterns.

2.7 Chat bots integration

The process of gathering the data about the clients in the customer relationship management system is aimed on communicating with the client, the final goal of which is to sell the company's product. Usually, it is up to the sale managers to speak and communicate to the client, answer his or her questions and commit a sale. Also, the managers are usually responsible for making contact with the clients from the client base of the company's customer relationship management system to make an offer. From the point of view of the business, paying a full-time salary to such managers is extra costs which it would be better to avoid.

Luckily, the innovation of the chat bots is the solution for this problem. Chat bots are the special server software that imitates the conversation with a real human. It can make offers for a client and answer questions about the company's product. If the chat bot isn't able to understand the customer, it can refer to a real human operator to continue the dialogue.

Some of the modern customer relationship management systems are supplied with the ability to integrate a chat bot. It can work two sides: first of all, when a customer is communicating with the chat bot on the web site, it analyzes the customer and adds the information about him into the customer relationship management system. The bot can be integrated with the innovation of an artificial intelligence based on machine learning, which can give an opportunity to collect and analyze the patterns of customers' communication, identify the customers' problems and needs in order to later provide them with a better offer. This is strongly related to the innovation of deep personalization, as well. The difference between these two innovations is that the deep personalization implies the type of collected data and ways to use it later, while the chat bots integration implies the easier way to gather this data. If a customer decides to conduct a purchase and leaves his or her contact info to the bot, this data is also added to the customer relationship management system, which is an element of a shallow personalization (Steenburg, 2018).

Secondly, when the data about the client is gathered, the chat bots can provide personalized marketing offers to a particular client based on the analyzed information about him or her. The bots that are integrated into the messengers and social media (such as WhatsApp, Viber, Telegram, Facebook Messenger and VK) are able to contact a customer reminding him of the company and offering a personalized offer based on his or her preferences and needs.

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