Competing on price is the worst type of competitive situation to be in. If you are competing on price, it means one of two things about your prospects:
- They don’t get it: You have not done a good job of explaining what you do or what you offer well enough to differentiate it from the rest of the mass market, or…
- They don’t care: You are selling to the wrong market entirely.
For #1, the problem is yours. You need to improve your pitch and approach. With #2, this is a waste of your time… nothing you say will resonate, because they aren’t your target market anyway.
This is because for years mutual fund managers enjoyed the asymmetrical relationship they had with their customers. They didn’t care, of course, if the customer didn’t understand what they did, it was better that way, in fact… After all, where did the customer have to go but to another mutual fund manager? They weren’t competing on price, but not on value either. They didn’t say to themselves…
“We’ll just charge less than this mutual fund manager service is worth, but a little more than it costs us to make, so we make everyone happy.”
So, mutual fund managers convinced Main Street that they could beat the market, but instead underperformed the market index funds, and still charged extremely high fees for their poor performance.
Now, after years of getting away with overcharging and under delivering, mutual fund managers are in for a reckoning. Their customers have been abused for so long that #1 is simply no longer an option… There’s no way to get that market back.
Unfortunately, it turns out that the customers as in #1 are the same customers as in #2 and now those customers not only don’t get it, but they just don’t care anymore either.