A Comprehensive Analysis of Customer Relationship Management Effectiveness in the Sri Lankan Service Sector: Empirical Evidence and a New Behavioral Framework

Abstract

Customer Relationship Management (CRM) has become a critical strategic tool for service-sector organizations competing in increasingly customer-driven markets. This study examines the impact and effectiveness of CRM within Sri Lanka’s service sector by integrating empirical findings from quantitative research with a new behavioral framework: Nudi’s 7/7 Theory of Customer Need Analyzing and Solutions Providing. Using data from 114 respondents, the study evaluates CRM strategies, customer satisfaction and loyalty, organizational performance, and implementation challenges. Statistical results from descriptive analysis, correlations, regression analysis, and factor analysis confirm that CRM significantly influences performance outcomes, although adoption remains uneven across organizations. The article also demonstrates how Nudi’s 7/7 Theory complements empirical findings by offering a practical model for understanding customer behavior and delivering tailored CRM responses. Overall, the study highlights CRM as a transformative strategic instrument and provides recommendations for service organizations, policymakers, and researchers.