TORONTO -

As November saw average days to turn for used vehicles in Canada sitting at 62 and overall transaction prices coming in around $29,000 — considerably lower than MSRP value — it is becoming more and more important to know just what a customer expects when visiting a dealership, says J.D. Power and Associates.

In the most recent Automotive Analyst Note from its Canadian Automotive Practice, J.D. Power focuses on what it calls the six distinct sales “gates”, which it contends dealers and sales staff should take note of as competition heats up in 2013.

These gates include: greeting, presentation, demo/test-drive, negotiation, contract/credit app and deal close.  

“For dealership salespeople, the road to a completed sale leads up to, and ideally through, six distinct ‘gates.’The key is to recognize these gates, and understand where the greatest pitfalls may lie as dealers strive to provide friendly, informative service at each step in the process,” said J.D. Ney, automotive account analyst at J.D. Power.

“Prospects, (defined here as shoppers in the dealership with money to spend) each have their own unique hot-button issues that can either make or break a potential sale. Salespeople can have a significant impact on overall close ratios by paying keen attention to each shopper’s particular needs and expectations; matching their initial vehicle experience to those functional and practical requirements, as opposed to using a standard one-size-fits-all approach,” he continued.

Basically, the company’s research outlines when a customer is rejecting a deal, and in doing so, attempts to reveal to dealers what aspect of their sales process they can ramp up to potentially garner additional customers.

First, highlighting one of the more dramatic statistics, according to J.D. Power, more than one third (37 percent) of shoppers who leave the sales process at a given dealership don’t stay beyond the presentation.

“Salespeople would do well to remember that the top reason shoppers reject a given brand is due to a perception that the vehicle did not meet their needs. Highlighting features of a vehicle that help shoppers place that vehicle into their everyday lives is critical,” Ney said.

In other words, sales staff must not forget to “sell” the car and the features that make it stand out.

On the other hand, while many dealer may assume shoppers might tend to lose interest during the pricing phase — if negotiation isn’t going their way — new research shows that only 28 percent of all dealership rejectors do so after this stage, the company shared.  

Furthermore, 31 percent of all dealership rejectors fall out of the sales process after the test-drive, though this trend is perhaps harder to reverse for sales staff.

To further analyze these results, J.D. Power proposed an experiment.

“Take, for instance, a dealership selling 60 vehicles per month. If we apply a study average closing ratio for Canadian dealers of 34 percent, we see that fully 79 of this particular dealer’s 116 eventual rejectors, (68 percent) leave the process even before sitting down to work out a deal,” Ney said.

And their findings pointed to customer service being one of the main issues for customers who decided to shop elsewhere.

In fact, one in five (18 percent) said that they rejected a dealer based on customer treatment issues, such as the “staff was rude”, the “dealer was too busy”, and the “staff applied too much pressure,” the company noted.

Ney stressed in his analysis that dealers need to look into why customers are leaving the store, not just when. Though concerns such as cost and having the right model are high in buyers’ minds, customer service remains a top concern.

“Salespeople who can most effectively guide shoppers through the critical presentation and test-drive phases, highlighting ways in which the vehicle fits their particular life style, may very well set themselves up for greater success. That is, if they remember to treat people well at each gate,” Ney concluded.