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Professor Spotlight: Dr. Roland Rust

By Josh Cooper
On December 5, 2010

For Dr. Roland Rust, a professor at the Smith School of Business, research is a way of life.

Rust earned a doctorate in business administration from University of North Carolina. He currently holds the David Bruce Smith Chair in Marketing, and is the founder and executive director of the Center for Excellence in Service and the Center for Complexity in Business.

One of Rust's recent research projects has earned accolades from many in the field. It focuses on the connection between customer satisfaction and consumer spending, a connection Rust says is often overlooked.

"It's really about satisfaction in the aggregate - the satisfaction that, on average, customers have toward a firm - predicting future consumer spending," Rust says. "If you take a look at the satisfaction levels that exist in the economy, and you want to predict what is going to happen to consumer spending in the future, we built basically a model that can do that."

Rust says the model can predict future spending with more accuracy than other models do. Using his model, an economist can predict 35 percent of the change in consumer spending three months in the future, while other more popular models can only predict between 10 and 15 percent.

"Business leaders and policymakers right now are paying more attention to things like consumer confidence," Rust says. "You hear on the radio a lot, ‘Oh, the consumer confidence index went up, and therefore that has implications for consumer spending.' It turns out that by taking customer satisfaction into account, you can explain about twice as much."

He says he thinks business leaders and policymakers could put this model to good use.

"I would expect that the decision makers, both corporate and government, should be paying more attention to the customer satisfaction numbers, and when they go up and down, to try to figure out what's going to happen to future spending," Rust says.

Rust says certain groups have praised his research.

"It clearly has been well-received by people who are in what you might call the ‘customer satisfaction community,'" Rust says. "We haven't gotten as much attention from, so far, from the news media."

He added he's fighting an uphill battle, because many look to the consumer confidence index as the standard for predicting future spending.

"So far in the news I still hear, ‘And the consumer confidence index went up or down,' and I don't hear as much about customer satisfaction," Rust says. "So I don't think we've won yet."

Recently, Rust has also worked on research projects on topics such as sustainability and consumption, revenue emphasis, agent-based modeling, customer lifetime value, service productivity and consumer impulsiveness.

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