ello ,.Y School of ManagementFor the exclusive use of S. Anurakta, 2021.NORTHWESTERN UNIVERSITYFLORIAN ZETTELMEYER KEL894CDK Digital Marketing: Addressing Channel Conflict with Data AnalyticsMelissa McCann, director of strategic marketing for CDK Digital,’ had never been anxious about a professional presentation in her life, but she was legitimately nervous on July 14, 2011, four days before she would present in CDK Digital’s Seattle headquarters. The cause of her concern was not the number of attendees—other than her CDK Digital colleagues, there would be only seven people in the room—but their identities and the stakes of the outcome.On July 18 McCann would present CDK Digital’s justification for renewing its contract to manage the websites and online advertising of over 4,000 General Motors (GM) automobile dealers. CDK Digital had been the sole provider of these services since 2007 and was facing renewal of its contract at the end of 2012. McCann knew that renewing the sole-provider contract was crucial because GM was CDK Digital’s most significant customer. Losing the contract would be a serious blow.McCann would be representing the chief marketing officer, Chris Reed, when she presented to seven members of the customer relationship management (CRM) subcommittee of the Chevrolet dealer council. (The eighth member was so negative about CDK Digital that he refused to attend the meeting.) Although GM dealers, like all auto dealers in the United States, were independent franchisees, GM saw the decision of whether to renew CDK Digital’s exclusive contract as a collaborative decision with its dealers.McCann and a team from development, marketing, and sales had already spent many hours in soul-searching sessions trying to come up with a proposed program that would, in McCann’s words, “make the renewal a non-event.”2 So far they had discussed multiple concepts, but none of them provided a clear solution to the key problem they were facing.CDK Digital’s original value proposition to GM was greater control of dealer websites to ensure that all brands and models were presented and marketed consistently. CDK Digital’s solution clearly delivered on this promise, but dealers felt the solution was inflexible and less responsive to their needs.McCann and Reed recognized that CDK Digital was caught squarely in the channel conflict between GM and its dealers. Was there a CDK Digital offering that would simultaneously satisfy‘ Prior to August 2014 CDK Digital was named “Cobalt.” This case refers to the company as CDK Digital throughout. 2 Melissa McCann, in interview with the authors, November 25, 2013.©2014 by the Kellogg School of Management at Northwestern University. This case was prepared by Greg Merkley ’84 and Professor Florian Zettelmeyer. Cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. To order copies or request permission to reproduce materials, call 800-545-7685 (or 617-783-7600 outside the United States or Canada) or e-mail [email protected] No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Kellogg Case Publishing. This document is authorized for use only by Sikta Anurakta in Digital Marketing – UMass Lowell (Fall 2021) taught by TONY GAO, University of Massachusetts – Lowell from Aug 2021 to Feb 2022.
