KANA Study Reveals Healthcare Industry Focused on Proactive Member Service

More than 65 percent of those surveyed are currently looking to install personalized marketing solutions as next level of member care programs

MENLO PARK, Calif., June 9, 2003�-KANA� (NASDAQ: KANA), a leading provider of enterprise customer support and communications applications, today announced the results of a recent study of healthcare executives regarding future eCRM deployments. More than 65 percent of participants cited the addition of proactive and personalized marketing solutions to improve the overall services offered to members as their next e-service implementation. These proactive marketing solutions are a cost effective way to build upon previous CRM deployments, including knowledge bases and e-mail management.

Sponsored by KANA, this study examined the upcoming eCRM purchasing decisions of executives in key vertical industries. With other vertical markets focusing on e-mail management, wireless eCRM and adding robust knowledge bases for customer self service, the healthcare sector is working to deliver better customer service by deploying proactive marketing systems to increase member satisfaction, increase personalized member care and reduce costs associated with paper-based delivery of personal information.

A recent Gartner report on CRM market trends for healthcare by Joanne Galimi titled, �Understanding Healthcare CRM Market Trends in 2003,� indicates that healthcare organizations are seeking tactical purchases that complement existing CRM solutions and offer measurable ROI. The KANA survey supports these findings, as industry executives responded that it can be more effective to take a modular approach to building an eCRM system rather than buying an overly large system that offers features not needed.

�Savvy healthcare organizations are strategically looking to improve customer service operations without compromising the bottom line through a more modular approach to eCRM initiatives,� said Tom Doyle, president of KANA. �Rather than deploying a one-stop eCRM solution, many of our healthcare customers are adding applications for a specific line of business such as proactive, personalized marketing to members.�

Other key findings within the healthcare industry include:

  • More than 30 percent of healthcare companies that participated in the survey would like to expand their eCRM offerings with secure multi-channel communications solutions;
  • 67 percent of respondents cited cost reduction as a reason for implementing eCRM programs;
  • One third of those surveyed indicated that knowledge management is the most important aspect of customer service within their organizations.

KANA provides eCRM applications optimized specifically for the telecommunications, financial services, healthcare, high technology, retail, government and higher education markets to drive better relationships through effective, efficient interactions with customers at all points of contact (self-service, Web collaboration, phone, e-mail, live chat) and throughout the enterprise. KANA�s industry-specific applications and customizations address the unique needs of Global 2000 organizations in these markets, giving businesses a competitive advantage and increasing their ability to service, market to and sell to their customers. Companies around the world benefit from KANA�s customer-centric approach to managing customer relationships, which combines sophisticated analytics with thin-client Web architecture to deliver extraordinary customer interactions that decrease costs and drive revenue.

About KANA

KANA (NASDAQ: KANA) provides enterprise customer support and communications applications enabling organizations to better service, market to, and understand their customers and partners. Optimized for specific vertical industries, KANA’s iCARE applications are in use at more than half of the world’s largest 100 companies. An award-winning, modular suite of eCRM applications available on J2EE and .Net, KANA iCARE applications enable customers to do business when, where and how they want, improving customer experiences while decreasing costs in contact centers and marketing departments. KANA’s partner-centric business model includes strategic relationships with the largest systems integrators in the world to support and sell KANA iCARE.

For more information, please visit www.kana.com.

Cautionary Note Regarding Forward-looking Statements Under the Private Securities Litigation Reform Act of 1995:
Information in this release regarding KANA�s forecasts, projections, expectations, beliefs, and intentions are forward-looking statements that involve risks and uncertainties. These statements include statements about KANA�s expected revenue, operating results, EBITDA, cash flows, long-term success, new business and market position. All forward-looking statements included in this release are based upon information available to KANA as of the date of this release, which may likely change, and we assume no obligation to update any such forward-looking statement. These statements are not guarantees of future performance and actual results could differ materially from our current expectations. Factors that could cause or contribute to such differences include, but are not limited to: competition in our marketplace, including introductions of new products or services, or reductions in prices, by competitors; risks associated with lack of market acceptance of KANA�s products or services; inability to enhance and develop our products and services within budget and on schedule; inability to attract and retain qualified employees, to manage cash and expenditures or to expand sales; inability to manage our business in light of recent personnel reductions; KANA�s history of losses; the effect of potential military action and terrorist activities; and slow economic conditions, particularly as they affect spending by our prospective customers on eCRM and similar enterprise software products. These and other factors are risks associated with our business that may affect our operating results and are discussed in KANA�s filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K and our quarterly reports on Form 10-Q.