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IBM Bolsters Business Intelligence Solutions With Exchange Applications' Software for Managing Marketing Campaigns

KeyCorp and BC Telecom Using Advanced Technology To Create, Execute and Capture Response from Campaigns

SOMERS, N.Y. - 22 Jul 1998: - IBM today announced that it is incorporating industry-leading marketing campaign management software from Boston-based Exchange Applications, into its end-to-end business intelligence solutions. With this move, IBM combines the data mining function, industry-specific data models, and hardware and database applications of its DecisionEdge solutions with the ability to exploit that data in the development of timely and customized marketing programs that target the identified needs of individual consumers.

DecisionEdge enables marketing managers to analyze consumer behavior, which in turn helps their organizations acquire, develop and retain customers, with the goal of increasing customer profitability and market share. Exchange Applications' marketing automation and campaign management software, known as VALEX, enables IBM customers to develop advanced, closed-loop marketing programs based on knowledge gleaned from analysis of consumer behavior. VALEX allows companies to create, execute and capture the response from marketing campaigns, while improving customer satisfaction.

Today, companies such as KeyCorp, one of the largest bank-based financial services companies in the U.S., and BC Telecom, Canada's second largest telecommunications company, execute highly targeted marketing campaigns using Exchange Applications' VALEX Marketing Management System to automate and accelerate marketing processes. In fact, KeyCorp has said that VALEX helped it make the transition from about seven large-scale cross-selling campaigns per year to 45 smaller campaigns that are much narrower in scope. As a result, the bank has increased its customer contacts by 200%.

``When a company runs a marketing campaign, the utmost precision and speed is required in allocating dollars across millions of customers,'' said Ben Barnes, general manager, IBM Global Business Intelligence Solutions. ``So knowing your customers from an enterprise view, and, in turn, how much you should invest in your relationship with them, will determine not only the success of a firm, but ultimately even a company's survival in today's business environment.''

KeyCorp, based in Cleveland, used VALEX to reach its goal of increasing CD asset levels and cross-sell other bank products and services. For example, customers who deposit more than $5,000 into their savings account might trigger a personalized direct-mail letter which includes a strong offer to entice the customer to open a CD account or other bank service. Larger deposits trigger even stronger offers and, perhaps, personal phone calls from branch managers. Within the banking industry, campaigns such as these can be used to counteract the behavior of customers who frequently deposit checks only long enough for them to clear before withdrawing funds to purchase outside stocks and mutual funds.

``At KeyCorp, we've increased CD conversion rates by automating processes for segmenting, testing, modeling, and targeting to very small groups,'' reported Jonathan Hill, vice president of direct marketing, KeyCorp. ``For us, being able to do all those tasks faster -- and more often during the year -- is what has driven the increase in profitability.''

Without VALEX, the bank lacked the means to automate the execution of multiple targeted campaigns running simultaneously. KeyCorp marketers can now focus less on campaign execution and more on campaign planning and assessment.

Also with the help of VALEX, BC Telecom has significantly increased the effectiveness of its retention and win-back campaigns in the highly competitive long distance market. The telecommunications company relies on VALEX to build and execute its highly segmented marketing campaigns designed to reinforce customer relationships.

``We want to get to customers when they're ready to communicate with us,'' said BC Telecom's Paul Ballinger, director, marketing services. ``The time and customer event-based triggers in VALEX allow us to interact with customers when they're ready to do business.''

According to Professor Merlin Stone of the UK's Surrey European Management School (Sems), who has written a series of reports on managing customer relationships ("Close to the Customer," Policy Publications, Bedford, UK), marketers should be striving to increase sales volumes and the buying frequency of existing customers, and reduce overall cost of sales as a percentage of margin supported. ``One of the keys to successful campaign management is translating customer data into immediate action,'' he said. ``DecisionEdge with VALEX helps companies manage the marketing process from start to finish, so that all of these goals may be reached.''

``Campaign management software can be used to link otherwise disparate customer contact points, such as customer service, sales force automation and interactive Web sites,'' said Andrew Frawley, president and CEO, Exchange Applications. ``By automating the direct-marketing process, professionals spend significantly less time on tactical details of campaign execution, and much more time planning and assessing campaigns and determining the best ways to allocate marketing dollars on customer and prospect segments that offer the greatest profit potential.''

Campaign management includes creating marketing campaigns; identifying customer segments, assigning each an offer and determining how best to reach them; executing campaigns; and capturing response behavior of each target group to determine the impact of campaigns, such as sales that resulted or customers that were retained. Marketers then look at what offers did well, calculate return on investment, and, using that information, refine the strategy for the next campaign. This automated process makes it possible to schedule each offer for each target group based on date or cycle in an order.

The IBM/VALEX agreement builds on IBM's February business intelligence announcement, during which IBM unveiled an integrated portfolio of new, industry-specific data analysis and marketing applications; new data mining, data warehouse, and data mart software; new business intelligence-specific consulting and services; advanced business intelligence analysis tools from IBM Research; a full range of business intelligence-ready servers that can handle the massive calculation volume of business intelligence applications; a dedicated team of over 2,500 IBM business intelligence specialists and developers; and specialized marketing and development agreements supported by a new program that has already enrolled 150 business intelligence vendors.

For more information about IBM's business intelligence products, solutions and services, visit http://www.ibm.com/bi.

Boston-based Exchange Applications delivers database marketing software and services that help companies maximize the profitability and value in all their customer relationships. Its VALEX product empowers marketing professionals with marketing functions once performed by technical programmers and service bureaus. Exchange Applications branched from a marketing consulting firm, incorporating in 1995 to become a software supplier. It runs operations in the U.S., Europe and Australia. More information about VALEX can be found at http://www.exapps.com.

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VALEX is a trademark of Exchange Applications Inc.

Contact(s) information

Nadine Taylor
IBM
914-766-3641/3932
ntaylor@us.ibm.com

Michelle Goodall Faulkner
Exchange Applications
617-737-2244 ext. 599
MGFaulkner@exapps.com

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