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Observes that, despite the prevalent use of customer databases, very little academic research has examined the practice. Discusses the plethora of research opportunities in database marketing. First, defines database marketing, and second, promotes organizational learning theory as a useful tool by which database marketing research can advance. Finally reviews prior research, and presents research questions related to the design, maintenance and applications of customer databases.

Knowledge management has become the latest strategy in increasing organizational competitiveness. Proponents are calling it the only solution for competitive advantage in the new century (Evans, 1997; Hedlund, 1994; Hibbard, 1997; Martinez, 1998; Trussler, 1998) and critics are calling it the worst in passing fads (Hibbard, 1997). Robert H. Buckman, CEO of Buckman Labs, says the purpose of the knowledge management and sharing system at his corporation is to “facilitate communication across all of the organization's boundaries, so that the entire company works together to help everyone to be the best they can be” (Buckman, 1998, p. 11). Buckman Labs has become the first name in knowledge management with its innovative and relatively long‐standing (since 1991) approach to harnessing employees' collective knowledge.

The purpose of this paper is to present results from an empirical study of various service recovery designs. When service failures occur, service recovery is the primary way a firm can retain its customers and minimize the costs associated with customer defection and negative word of mouth. While researchers concur on the importance of service recovery in retaining customers, recommendations on implementation differ considerably. Consequently, actual service recovery design and results vary widely among practitioners.

The method employed uses an experimental design, employing controlled scenario manipulations.

This paper examines two issues that offer possible explanations for the variation in previous research results: elements of service recovery system design that make a difference and degree of primary failure. An additional issue, research methodology, may also contribute to variations in research results and is likewise addressed.

In failed service encounters, the degree of failure significantly affects customer satisfaction and loyalty. Both psychological and tangible factors are important contributors to service recovery satisfaction.

This study builds upon previous research and fills previous gaps by being the first study to experimentally test the impact that varying service recovery design has on recovery success within environments of varying levels of degree of failure.