I faced the same situation. Talking with honestly is the only way. The problem is when they have no criteria, are not aware if they are sucking on something, and/or are unable to understand or accept that there are some weak points they could improve. That's what happened to us, and it looks like this is the case for you too. Still, we tried talking several times as honestly as we could, to no effect. They simply wouldn't accept their shortcomings. Ultimately I figured we were meant to form a band, our tastes and criteria were way too different, so I simply quit, along with other unhappy members.
Have a non-aggressive talk and figure this key aspect out, you can tell in one talk if it is going to work or not, and if not, do not waste more time on something that has no reason to change.