Oil boom greases business for Minot, N.D., dealer

Pure Honda store up 11% after record sales in 2011

Jeremy Berg is the first to admit that the stars have aligned for his Pure Honda Powerhouse dealership in Minot, N.D.

Berg, a partner in the family business along with his dad Laverne, and cousin Keith Braunberger credits product and people for the dealership’s continual success with ATV sales. And, yes, the agricultural community thrives in the area. Oh, and don’t forget about oil. The Bakken oil field is the largest oil deposit ever found in the U.S., and helped North Dakota overtake Alaska as the country’s second-leading oil-producing state earlier this year. The economic boom has presented local challenges, but selling ATVs has not been one of them at Pure Honda.

“Things are rocking up here. The biggest thing is that our economy is unbelievable,” Berg said. “Minot is the biggest city closest to the oil find.”

And while workers by the thousands are coming to the state because of the find, Berg says the longtime residents also have benefitted.

“We’re selling to the people who had been living here all along,” he said. “They had a lot of good-paying jobs, agriculture is doing well around here, and North Dakota has over a $1 billion surplus. The state is just rocking right now. I’d like to tell you we’re a genius and have it all figured out and you can do it anywhere, but that’s not the case. I’d like to think we were doing a pretty good job before it all came, but now it’s just made it better.”

Berg estimates about 75 percent of ATV sales are to buyers in the agricultural field, particularly cattle ranchers. “Those guys are adding to their fleet — getting one for the wife. Also a big part is the stuff that Honda has come out with recently. Their new models have hit the nail on the head. Their new Ranchers and new Foremans are awesome. That helps create a lot of buzz and brings in a lot of people to upgrade. They’ve given people a good reason to upgrade.”

Trade-ins from buyers who purchase the newest models have given Berg additional inventory.

“We typically don’t have a lot of used ATVs,” he said. “Those are a pretty hot and rare commodity. Right now we probably have 15-20 pre-owned ATVs, which in seven years of business, is definitely the most we’ve ever had. That’s just attributed to the new models of Honda. They made a lot of their models with fuel injection and power steering, which made people want to trade up to get that. They want the latest and greatest, and Honda’s done a great job of hitting that market.”

Berg has seen the loyalty of the Honda customer at play, as he estimates that “90 to 95 percent of them” are Honda trades.

Q1 sales on the rise
Pure Honda Minot saw sales increase 11 percent in the first quarter compared to the same quarter in 2011, “and last year was the best year we’ve ever had,” Berg said. Last year the dealership sold 1,200 units, with about 600 of those being new units.

“Things are absolutely on fire on here,” he said. “Minot’s always been a town of 35,000-40,000 with the air base. They’re projecting 100,000 in the near future. It’s growing already. You used to be able to drive down the main street and it was a ghost town. Now it’s bumper to bumper to bumper to bumper.”

With the dealership located off a main roadway, Berg estimates that auto traffic counts at his store have risen 25 percent in the past year.

The store, in fact, has come a long way since its inception. It originated as a 6,000 square-foot operation, but the owners opened a 25,000 square-foot Pure Honda store in 2009.

“We’re pulling people from 100 miles around us,” he said. “People will drive a little farther because we have a real nice store in Minot. It’s exactly what Honda said it would do, with Powerhouse stores doing 20 percent more business than the normal stores, and we would have to agree.”

Berg says Honda rep Marty Fisher has provided guidance that has built on the success.

“Marty has been a huge factor in making sure we are stocking the correct units and promoting the current sales programs that Honda offers,” Berg said. “We couldn’t do what we do without his help.”

With the continuing growth of side-by-side sales, Berg wonders if Honda’s future will include a sport UTV offering to complement the Big Red.

“The Big Red does awesome for us. The Big Red fits our market perfectly,” he said. “I know there are dealers in other parts of the country that would love to see a Honda sport side-by-side, and hopefully Honda will expand on that line. They need to, because people love Hondas, and a lot of times I think people are buying other brands right now just because they don’t have a choice. Once Honda expands on their side-by-side line, they’re going to rock it. We’re just keeping our fingers crossed.”

There’s no guesswork involved with customer service, which is an area of the business that Berg can rely on regardless of economic conditions.

“We believe the best thing you can do is treat everyone who walks in the door like you’re their best friend. If any kind of problem arises, you take care of it. You don’t worry about if costs you a couple of hundred dollars to make somebody happy. It’s going to pay back tenfold,” he said. “We’ve always said when you walk into our store, it’s kind of like walking into a bar without the booze. Everyone’s smiling and laughing. You talk to the customers like they’re your friends, not like you’re trying to sell them anything.”

Jobs are abundant in the area’s growing economy, but the dealership employees seem to have found a home at the store.

“We’re really fortunate that the people we have, from our sales guys to parts to service to techs — we have unbelievable people here and those are the guys that make it happen. If you own a restaurant or really any type of store in Minot, you can’t keep people. You’re losing people constantly to the oil fields. We haven’t lost one person. It tells people our employees are having fun, and it relates to customers, which means the business is doing well. It’s not any more complicated than that.”

Berg feels his dealership has an edge by providing customers with plenty of in-stock P&A options. Snowplows, winches, big wheel kits and tracks are the biggest hits in ATV accessories. “We sold 50 Camoplast tracks last winter with all the snow. This year it was 15, but that’s stuff is going to fluctuate based on the weather,” he said.

Berg estimates that that store keeps 300-400 helmets in stock, with sizes and colors for any customer. “It’s a commitment,” he said. “Someone can come in and grab it and go. That’s a lot better than having to order it and come back. At that point, well, a lot of dealers will complain about Internet shoppers. I still think that people would rather walk in, try it on and take it home. I don’t think people really want to buy online, but if you as a dealer give them an excuse to shop online, well, that’s your own fault.”

Meanwhile, Berg and his staff plan to continue to find ways to bring customers into the store, and send them away with product.

“We realize we’re in a bubble. We’re not naïve,” he said. “We don’t think it’s us that’s making the difference. It’s just we’re fortunate to have a super economy up here right now, and Honda as a brand. We know we’re very, very lucky to be where we are in the world.

“We try to run a real clean, professional business and take care of our customers to the best of our ability. At the end of the day, you have to have people around you who have money to spend. If someone’s losing their house, they’re probably not going to go out and buy a new toy. But if someone just put six new oil wells on their property, they probably are. It’s not rocket science.”