The acquisition of CustomerAnalytics by Exchange Applications Inc. is seen by experts as a sign of consolidation among companies specializing in customer relationship management.
Last week's $5.2 million deal combines the software and training that Dallas-based CustomerAnalytics offers for branch employees with the more centralized, back-end technology of Exchange Applications.
The deal fits a pattern, expected to become more common, in which different disciplines within customer relationship technology are merged. With so many companies focusing on different techniques of nurturing relationships, a convergence of companies is inevitable, observers said.
"We are going to see a lot more of this type of consolidation as time goes on," said Kimberly Collins, a senior research analyst at GartnerGroup. "There is going to be consolidation between companies that have different pieces and different technologies."
For the company that was founded in 1979 as Action Systems and bought Burlington, Mass.-based CustomerAnalytics in November, the deal continues an effort to expand beyond its roots as a provider of branch-based software and expertise.
"The merger with Exchange is a logical extension of that" November deal "because the impetus of both is that CustomerAnalytics needed to move further," said Robert E. Hall, chief strategy officer for the new Exchange Applications and formerly chief executive officer of CustomerAnalytics.
The former Action Systems, which booked revenue of $17.7 million last year, was started to carry out customer relationship management strategies at the branch level. Action Systems' purchase of CustomerAnalytics was aimed at acquiring the ability to impose its strategies throughout an enterprise.
Exchange Applications, which reported $43 million of 1999 revenue, sells software and services to support customer relationship management techniques in real time across all of an institution's delivery channels, including the Internet, call centers, branches, and automated teller machines.
The deal, which is expected to close June 22 or 23, "will support CRM by managing it from a centralized and branch level to form a holistic process," said David McFarlane, chief operating officer at Exchange Applications.
Ten customers, including FleetBoston, Bank of America and Royal Bank of Scotland already use the services and software of both companies. The newly merged company intends to cross-market its combined offerings to CustomerAnalytics' 110 customers and Exchange Applications' 150 customers.
"This will give organizations the ability to gain control and to optimize customer touches across all channels, plus methodology, process, and learning to enable the employees to use the information at the central and local level," Mr. Hall said.
Ms. Collins of GartnerGroup said that other customer relationship management firms have gone into partnership with a Big Five consulting firm, but "they are not as drilled down."