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Xchange, Inc. Announces Agreement to Acquire CustomerAnalytics; Sets New
Benchmark in Industry as First eCRM Provider to Marry Local and Centralized
Marketing
Boston, Mass. and Dallas, Tx. - June 8, 2000-
Exchange Applications, Inc., (Nasdaq: EXAP), now doing business as Xchange,
Inc., announced today that it has signed a definitive agreement to acquire
privately held software and services provider CustomerAnalytics (based in
Dallas, Texas). Upon completion of the acquisition Xchange will integrate
CustomerAnalytics' EnAct, a planning application for front line customer
contact, into its eCRM (eCustomer Relationship Management) solution suite
Xchange 4.0. Xchange will become the first eCRM solutions provider to enable
click-and-mortar companies to:
. Analyze profit opportunities and execute and measure marketing offers and
campaigns in a local office, branch or outlet;
. Close the loop between centralized and local marketing, by recommending
the best tactics at both the local point of customer interaction and the
centralized corporate level to make each customer relationship more
profitable, and then tying information, results and feedback gathered at
both levels back to a central data warehouse;
. Target and deliver proactive and reactive personalized communications
across every possible customer touch point (email, call center, Web site,
direct mail, face-to-face interactions);
. At the local and centralized corporate level, identify who to target
(based on profitability potential), what to offer and how to best execute
that offer.
This acquisition will also dramatically increase Xchange's intellectual capital.
Xchange believes that CustomerAnalytics (formerly Action Systems) will bring the
premier sales management, best practices, and behavioral change consulting and
services organization in its class. It is Xchange's intention to integrate
CustomerAnalytics' sophisticated analytic models and reporting techniques into
Xchange 4.0, further enhancing the industry's most advanced analytic software.
Upon completion of the acquisition more than 100 employees will be added to
Xchange bringing the total to nearly 450. The acquisition is expected to boost
Xchange's client base by 110; 20,000 individual users of CustomerAnalytics'
EnAct identify and manage opportunities to grow the profitability of more than
100 million customers. CustomerAnalytics had revenues of $17.7 million in 1999.
Under the terms of the agreement, Xchange, Inc. will issue approximately 5.2
million shares of its common stock and stock options to existing holders of
CustomerAnalytics common stock and options. The transaction will be accounted
for as a purchase. The completion of the transaction is subject to the
satisfaction of customary conditions precedent, including the expiration or
earlier termination of all waiting periods under the Hart-Scott Rodino Antitrust
Improvements Act of 1976, as amended, the receipt of approval from the
stockholders of CustomerAnalytics and the receipt of certain other consents.
CustomerAnalytics' CEO Robert Hall will become Xchange's Chief Strategy Officer.
CustomerAnalytics' EnAct is a planning application that provides front-line
customer contact personnel with customer information as well as methodology and
tools for using the information to build profitable customer relationships.
Xchange 4.0 combines software and services that enable businesses to personalize
and coordinate online and offline customer communications to earn a greater
share of each customer's business. Xchange 4.0 is the industry's first
comprehensive offering to integrate all of the essential elements of eCRM -
campaign management, customer analytics, email marketing and Web
personalization. EnAct will be sold as part of the Xchange 4.0 solution suite or
as a stand-alone product.
Combined solution will leverage local/centralized customer data to increase ROI
at both levels. After an extensive search for a local-level eCRM solution,
Xchange found that CustomerAnalytics' EnAct was the only company able to provide
hard proof of its worth to clients. Typical case
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studies included 50% increases in the success of selling and cross selling
initiatives, 50% increases in customer satisfaction, 15% decreases in customer
attrition and double-digit increases in the overall customer profitability of
local offices using EnAct.
Xchange CEO Andrew Frawley noted the power of adding this front-line solution.
"Our experience suggests that typically 60% of a company's marketing is
centralized and the other 40% occurs at a more local level. Companies using
CustomerAnalytics solutions report annual returns of 200%, as their point-of-
customer contact personnel consistently earn more of the customers' business and
loyalty through understanding who their most profitable customers are, and what
their motives are to buy," he said.
Xchange believes that EnAct will round out Xchange's marketing offering and fill
a great need in the eCRM space, by creating a planning tool for local customer
interaction that can be integrated back to the centralized single customer view
at the enterprise level. Customer data from interactions at both levels can be
used to identify profit opportunities and then coordinate and act on those
opportunities at both levels to gain more of each customer's business. "No other
eCRM solutions provider can offer the combined perspective, further
strengthening Xchange's leadership position in the eCRM space," said Frawley.
"Valuable, relevant customer interactions at the local level combined with
personalized interactions at the corporate level are the most powerful tools any
company has to distinguish its brand. CustomerAnalytics' brings tools and
methodology to personnel on the front line, so at every interaction they provide
customers the offers and information most valuable to them," explained Robert
Hall. "CustomerAnalytics consulting expertise teaches businesses to choose
customer touch points and provide information that make interactions most
profitable. Now, with the integration of our technology and consulting into
Xchange's powerful solution, we can add this expertise to our client's central
marketing initiatives," he added.
The acquisition will help meet several key goals for Xchange, Inc.'s growth
strategy for 2000. It will help:
. Expand and enhance the Xchange eCRM solutions suite with new products and
new services;
. Increase billable service personnel and quota-carrying sales people in
proportion to the market's rapidly growing demand for Xchange products and
services;
. Integrate Web and component architecture;
. Enhance predictive capabilities of Xchange Optimizer via acquired analytic
and data models;
. Increase Xchange's international presence and services organization; and
. Add additional delivery models.
CustomerAnalytics client base of leading companies includes 25 of the world's
top 100 financial services institutions, among them: Abbey National plc,
FleetBoston, Wells Fargo, Liberty Life Insurance, ABN AMRO/LaSalle, and Canadian
Imperial Bank of Commerce.
According to Rick Billig, senior vice president of corporate database marketing
at FleetBoston, the market is in need of a solution that ties together corporate
marketing efforts with localized channels. "There is demand for an integrated
local and centralized solution in the eCRM marketplace. Most solutions do not
bridge that gap and leave out coordination of the point-of-sale channel. There
is definitive value in being able to know your most profitable customers at any
level, and I'm glad to see that these two well-respected companies are
addressing that market opportunity."
Dan Haley, Xchange's chief deal officer, commented, "The complementary nature of
Xchange's and CustomerAnalytics' extensive client bases will generate extensive,
instant cross-sell opportunities to clients of both companies that want to
further increase their ROI by creating personal customer relationships at every
point of interaction," he continued.
"While the advent of the Web redefines traditional business models, consumers
still remain loyal to businesses that offer valuable face-to-face experiences,"
said Frawley. "As the only eCRM solution to enable businesses to optimize
customer interaction via any communication channel at the centralized and local
levels, Xchange will earn a greater share of the exploding eCRM market," he
continued. "This, combined with the giant leap that CustomerAnalytics will bring
to
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Xchange's intellectual capital and services organization, will reinforce what
we believe is Xchange's position as the most forward-thinking eCRM player in the
market," he said.
Note to investors: Xchange, Inc. will hold a live teleconference for investors
at 10:30am Eastern today. To participate from within the U.S., dial 1(888) 273-
9891. To participate from outside the U.S., dial 1(612) 332-0802. Ask for the
Xchange, Inc. teleconference. An optional presentation will be available at
Xchange's IR Web site (http://www.xchange.com/ir) shortly before the
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teleconference. Audio replay will be available through Wednesday, June 14 at
midnight and can be accessed from the U.S. by dialing 1 (800) 475-6701 and the
access code 522709.
About Xchange, Inc.
Xchange, Inc. helps click and mortar companies earn a greater share of their
customers' business through relevant, personalized customer communications.
Xchange provides the only eCRM software and services solution that enables
clients to customize offers based on profile information, synchronize offers
across all customer channels in real-time, and track the responses. As a result,
companies can improve their ability to acquire and retain customers, and make
customer relationships more profitable. More than 135 of the world's most
innovative companies, including Citigroup, DaimlerChrysler, drugstore.com and
Vodafone are using Xchange's solutions to drive personalized communications to
one billion consumers and businesses around the globe. Xchange is based in
Boston with offices in Denver, Seattle, London, Sydney and Tokyo. For
information, visit www.xchange.com.
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Xchange, Xchange Dialogue, Xchange Optimizer, Xchange Real Time and Xchange
Solution Services are trademarks of Exchange Applications, Inc. All other
trademarks contained herein are the property of their respective owners.
