Learning from Vanguard

Vanguard's market share of mutual fund assets swelled from 1.7% in 1981 to 9.6% in 2004. John Bogle had this to say during a speech:

"Vanguard has never much liked to spend unnecessary money.... Indeed, at the very outset, I drummed into the character of our Vanguard crew that our first rule of marketing would be: 'Market share must not be bought; it must be earned' -- earned by providing superior investment returns, earned by excellence in investor services, earned by winning the trust of investors."


"The second rule was, 'market share is not an objective, it is a measure.' I not only had no interest in buying our market share with costly advertising and marketing campaigns, but no interest in building it by introducing new funds that simply reflect the fads and fashions of fickle stock markets."


"If market share grows organically, unforced by costly advertising and opportunistic marketing, that growth is likely telling the world that something good is going on: that investors like what you are doing and are willing to put their money where their mind is -- entrusting their hard-earned assets to your care."


"But there is one more thing that has fostered Vanguard's growth. I called it 'candor as a marketing strategy,' making sure that we carefully explain, not merely the rewards of investing, but the risks; not merely the value of investing, but the costs; not claiming superior ability to manage money but stressing the limitations imposed by the tough real world; and above all, doing our best to tell the truth -- the whole truth and nothing but the truth -- in reporting our investment results to our shareholders and in defining our strategies and our policy positions."

I believe that earning market share through honesty can apply to us network marketers.