eLoyalty Provides Business Update

Raises First Quarter Revenue Estimate, Discusses New Customer Acquisition, Reviews Progress of Its Primary Service Lines and Updates Hiring Plans

LAKE FOREST, Ill., April 6 -- eLoyalty Corporation, a leading enterprise CRM services and solutions company (Nasdaq: ELOY), today provided an update on significant elements of its business, including:

-- First Quarter 2004 revenue estimate,
-- Customer acquisition and progress of primary Service Lines,
-- Current hiring plans, and
-- Conference Call to discuss first quarter 2004 results and business outlook.

First Quarter Revenue Estimate
The company presently expects its first quarter 2004 revenues will exceed its previous guidance of $12.0 million to $14 million. While first quarter results are still preliminary, the company presently expects that revenues will be in the range of $14.4 million to $14.7 million. The improved revenue outlook is principally driven by the company generating more revenue from new accounts than was expected.

In addition, late in the first quarter of 2004 the company secured a significant add on project at an existing account. The company worked approximately 1,400 hours on this project, however no revenue was recorded for this work as the related contracts were not executed as of the end of the first quarter. The company currently expects to execute these agreements in the second quarter.

Customer Acquisition and Progress of Service Lines
In the first quarter, the company presently expects it will recognize revenue from 17 new customers (including 5 Managed Services customers), above its previous guidance of 10 to 14 new customers.

In addition, the company made significant progress in several of its major Service Lines. Key indicators of this progress include:
-- Converged Internet Protocol Contact Center (IPCC) Solutions and Managed Services
-- Being selected for 11 new Managed Services engagements, of which 5 were contracted for at quarter-end,
-- Being selected for 3 new implementation IPCC engagements, and
-- Building additional momentum with the company`s primary go to market partner, Cisco Systems.

-- Contact Center Optimization Solutions (CCOS)
-- Adding three new CCOS customers, and
-- Launching a new set of Assessment Offerings.

Current Hiring Plans
During the back half of the first quarter the company ramped up its employee recruiting to meet increased demand and replace employee attrition. As a result of the efforts, the company hired 17 people in the first quarter of 2004. The company continues to actively recruit for personnel who have skills in contact center telephony, Voice-over Internet Protocol (VoIP) and other CRM technologies related to contact center applications.

"We are very pleased with the significant progress we made in a number of key areas of our business in the first quarter and we continue to believe we are at the early stage of a sustainable business recovery," stated Kelly D. Conway, President and CEO of eLoyalty. "We also believe that we have identified and are well positioned to capitalize on several emerging service areas, which can create the basis for significant future growth. We are also mindful of the adverse impact of three years of price erosion on our gross margins. Accordingly, we will continue to cautiously invest in new growth areas while also working to reduce all non essential expenses."

Conference Call Information
eLoyalty will provide an update of its financial results and business outlook during its quarterly conference call. The company will release its first quarter 2004 financial results after the close of market on Monday, May 10, 2004. eLoyalty management will host a conference call at 8:30 a.m. eastern time on Tuesday, May 11, 2004.

A webcast of the conference call will be available live via the Internet at the Investor Relations section of eLoyalty`s web site at www.eloyalty.com/investor/ where this press release, as well as other financial information that will be discussed on that call, is also available. It is recommended that participants using the Web, access the site at least fifteen minutes before the webcast begins, in order to download and install any necessary audio software.

For those who cannot access the live broadcast, or the continued availability on eLoyalty`s website, a replay of the conference call will also be available beginning two hours after the call is completed until May 18, 2004 by dialing (888) 509-0081 or, for international callers, (416) 695-5275. There is no passcode for the replay.

About eLoyalty
eLoyalty is a leading management consulting, systems integration, and managed services company focused on optimizing customer interactions. With professionals in offices throughout North America and Europe, eLoyalty`s broad range of enterprise Customer Relationship Management (CRM)-related services and solutions include creating customer strategies; defining technical architectures; selecting, implementing and integrating best-of-breed CRM software applications; and providing ongoing support for multivendor systems. The combination of eLoyalty`s methodologies and technical expertise enables eLoyalty to deliver the tangible economic benefits of customer loyalty for its Global 2000 and government clients. For more information about eLoyalty, visit www.eloyalty.com or call 877-2ELOYAL.