CDK Global Inc. started 2020 with investment plans for new technology and processes aimed at addressing some long-running frustrations that dealerships have had with its customer service.
In February, CEO Brian Krzanich said the company would spend more than $300 million on the efforts over its next three fiscal years. A new customer rewards program, simpler invoices and more consistency around pricing were part of the dealership management system giant’s plan.
But the arrival of the coronavirus crisis in March left dealership customers scrambling to adapt to reduced sales demand. CDK responded by waiving all dealership subscription fees for its layered applications, such as its Elead customer relationship management system, and offering a 25 percent discount on fees for its DMS and related products for April. It offered several products for free for two months.
Krzanich said he would take only $1 in salary and cash bonuses for the rest of the year.
The company largely avoided a significant financial hit from COVID-19 in its fiscal third quarter, ending March 31. But it cited the pandemic as the main reason it lowered revenue and earnings forecasts for the rest of its fiscal year.
It reported that some customers have opted to delay product installations because of the outbreak.
Krzanich said the virus will not stop CDK’s work on the new product and customer service initiatives, however. It completed the first fully virtual installation of its new cloud-based Drive Flex DMS in April, and more than half of its customers now have simplified invoices.
CDK completed another 2020 goal in April: the sale of its digital marketing business, including dealership advertising and websites, to Ansira Partners Inc., a marketing agency backed by private equity investors.