Exchange Applications Ships VALEX 3.0, Setting New Standard for Marketing Campaign Management Software.

BOSTON--(BUSINESS WIRE)--July 26, 1999--

New Response Manager capability makes VALEX the first closed-loop marketing software that can monitor all campaign-response types across

customer channels; Citigroup reports success in pilot program

VALEX Release 3.0, the latest version of Exchange Applications, Inc.'s award-winning marketing software - introduced today - gives marketers unprecedented ability to easily:

--Influence desired customer behaviors;

--Attribute customer behaviors to particular marketing campaigns;

--Analyze the impact of those behaviors; and

--Gauge the effectiveness of marketing initiatives.

Exchange Applications (Nasdaq:EXAP), a leading supplier of software and services that optimize the value of customer relationships, will demonstrate VALEX 3.0 at the National Center for Database Marketing (NCDM) conference in Chicago (July 28-30, 1999), at booth #918.

Among other enhancements, the new VALEX release features two new major modules - VALEX Response Manager(TM) and VALEX Response Analyzer(TM). Exchange Applications' Chairman and CEO, Andrew Frawley, noted that marketers will use these components to "close the loop on a complete marketing cycle, from opportunity identification, to campaign execution, to response attribution and assessment." Results are then applied to continuously improve subsequent campaigns, Frawley said. "Marketers now have a well-defined, iterative process they can use to continually experiment and improve campaign results. By providing a common set of metrics for measuring campaign ROI and analyzing customer behavior, VALEX 3.0 ushers in a new era of accountability in marketing."

VALEX 3.0 arrives at a critical time for marketers, who must improve customer value through Customer Relationship Management initiatives. VALEX 3.0 is a core component of CRM efforts, according to beta test clients of the new release. The only campaign management software to truly close the marketing loop, VALEX 3.0 contains "tie-breaking" rules that ensure that a unique customer response can be attributed to one and only one campaign. In addition, VALEX 3.0 allows marketers to associate multiple types of customer behavior to a single campaign.

For example: a bank determines that a segment of online- banking customers is highly likely to accept a particular credit card offer, and creates a Web-based campaign to entice these people to apply. Unlike other campaign management tools, VALEX 3.0 enables the bank to define and capture multiple types of desired behaviors. In this example, behaviors include: 1) a customer who clicks on the link within the bank's Web site to apply online; 2) a customer who visits the bank's Web site to inquire about the offer, but applies for a different type of credit card; and 3) a customer who phones the bank to receive more information.

In use by many Global 2000 companies, VALEX helps businesses identify customer segments offering the greatest profit potential, and then closes the gap between current and potential profitability through highly targeted direct-marketing campaigns. Benefits include improved customer acquisition and retention rates; increased revenue due to cross-selling and up-selling; and overall higher profitability per customer.

Three core components of VALEX 3.0 are:

VALEX Response Manager: Included in the core VALEX 3.0 product, VALEX Response Manager allows marketers to: describe the behavior that characterizes a response; track the group being evaluated for the response behavior; and define how long responses should be tracked. Response Manager also includes a complete set of ProForma economic measures, used to project the costs of marketing and fulfillment, the value of desired behaviors, and the profitability of marketing campaigns. ProForma projections can then be measured against actual costs.

VALEX Response Analyzer: VALEX Response Analyzer is an add-on reporting and decision-support package that integrates DSS Suite(TM) from MicroStrategy Incorporated (Nasdaq:MSTR), a leading worldwide provider of business intelligence software. Delivered with a set of response analysis reports, VALEX Response Analyzer accesses all data related to response management via a robust, browser based analysis and reporting environment.

VALEX Response Analyzer Plus(TM): A custom consulting offering, VALEX Response Analyzer Plus extends the capabilities of VALEX Response Analyzer to meet businesses' custom requirements.

"Closed-loop marketing systems shorten the time for a business to leverage new information on customer behavior in order to optimize future campaigns," said Henry Morris, vice president for Data Warehousing and Applications at International Data Corporation. "VALEX V3, integrated with MicroStrategy's DSS Suite, is designed to increase the velocity of information from campaign definition to execution to response management and analysis. The business value of this type of application should push customer-centric applications to be the fastest growing analytic application segment."

In Citigroup pilot, VALEX 3.0 demonstrates potential

Citigroup, in pilot with VALEX 3.0 in several countries, reports impressive early results. According to Noor Menai, Global Director, Customer Relationship Management for Citigroup Global Consumer Business, "Citigroup typically has dozens of targeted campaigns occurring simultaneously, which makes for a complex measurement and analysis environment. Detecting indirect response has been particularly vexing. With VALEX 3.0, we can establish rules that define indirect responses and gain a good gauge of campaign performance. Without it, we could miss all indirect response to campaigns." VALEX will also enable Citigroup to learn which channels each customer prefers, and apply that knowledge to subsequent campaigns.

Other new features of VALEX 3.0

In addition to Response Manager and Response Analyzer, other new features of VALEX 3.0 include:

--SQL Server7.0 certification

--Oracle Net8 support

--Performance enhancements

--Electronic folders for simplifying storage and access of VALEX-related information.

VALEX remains the most widely used campaign management software

According to prominent industry analysts, Exchange Applications has delivered more full-production installations than any other campaign management software. VALEX is licensed for use at more than 80 sites spanning 23 countries. Users include Ameritrade, Bank of America, Fidelity, NatWest, Staples and U S West. Exchange Applications has won numerous awards for VALEX, including the Data Warehousing Institute's "Best Practices" Award, the National Center for Database Marketing's "Excellence" Award and the Crossroads "A-List" Award. CEO Frawley noted that Exchange Applications expects all of its clients to upgrade to VALEX 3.0 over the coming months.

Pricing and Availability

VALEX 3.0, which includes Response Manager, is available now for customers who utilize Oracle databases. VALEX 3.0 for Microsoft SQL Server, IBM's DB2 and DB2/PE, NCR's Teradata and other ODBC-compliant databases will follow in late August. Pricing, based on the size of the company's customer and prospect database, begins at approximately $150,000 for a database containing 500,000 records. VALEX Response Analyzer is priced at $25,000 for 10 named users. Pricing for VALEX Response Analyzer Plus is determined by customer's individual requirements.

Exchange Applications, Inc.

Exchange Applications, Inc. (Nasdaq:EXAP) helps businesses optimize the value of customer relationships across channels and product lines. Its award-winning VALEX software and consulting services help businesses identify customer segments offering high profit potential, and then maximize the value of those segments through highly targeted and coordinated direct marketing campaigns. Exchange Applications provides marketers with the technology to plan, build, execute, analyze and refine marketing campaigns that produce measurable return on investment. Through VALEX, a company automates and accelerates its marketing process to improve customer acquisition, expansion and retention. Exchange Applications is based in Boston, with offices in Denver, London and Sydney. Visit Exchange Applications on the Web at http://www.exapps.com.

VALEX, VALEX Response Manager, VALEX Response Analyzer and VALEX Response Analyzer Plus are trademarks of Exchange Applications, Inc. All other trademarks are the property of their respective owners.