When you are in the business of selling services or expertise, you will face competition. Nowadays a global competition where (y)our competitors take on various shapes and sizes. So when an organisation goes on the market looking for certain services, this organisation probably has a predefined set of requirements for the provider. These can change over time, but some basics are set at the beginning.
What is the client actually buying?
There are at least three factors that influence the buying process at the organisation which needs a new website. The first one is the organisation itself. The set of requirements eliminates your agency from competing either based on geographical reasons (we would want to work with a local company) either on the size of the agency (we would want to work with a bigger agency, which understands our challenges better). They would want a website in AEM or Sitecore - a Drupal agency can't help with that. The delivery time is unreasonably short, and so on. Those are the factors you have none or very limited influence on. The next one is your competition. We have to assume that the potential client's requirements allow you to compete. You are faced with quite a diverse competition. You can leave to your competitors to fight for the project any way they want. As long as it is legal and morally acceptable, of course. But sooner or later it will come down to one thing - the pricing. And from my experiences better later than sooner. In the case the client is serious. And sooner if you can assume with great probability that the client is looking for the cheapest possible solution.
The price war and why would you want to avoid it
There is no need for you to disclose (detailed) data about your pricing at an early stage of the buying process, you should start talking about pricing at the end when the client is already aware of all the things you are bringing to the table. You will instantly be pulled into a price war, into something you probably didn't even intend to find yourself in. When I was working in the sales consulting business years ago, I remember a case when a Slovenian machine manufacturing company found success in one of the most competitive markets, in Sweden. The CEO of the Swedish company asked for a discount. The manufacturer came to us to ask us how to respond. We talked for a while, tried to get as much information as possible and realized that the Swedes really want someone from the manufacturer of the machines to come onsite when those will be installed. And that was it. Slovenian company offered to be on-site at installing, to guarantee that everything will run smoothly. No discount but offering more value for the same price. And it paid off, the costs of providing employees for two weeks were substantially lower than the discount would be.
What are your options?
Well, if it comes down to pricing, you have two options. Either you do play the game, or you don't. I wouldn't advise you to take the path of entangling yourself in the price war but instead find a way of how you will present the value of your services, your knowledge and expertise to your client. Or maybe some other little perks you know they will mean a lot to your client. Dig deep and ask questions, take notes and incorporate into your proposals those little perks also. Because those are the ones that eventually can make a difference.
And not to forget, clients are very eager to compare prices and eliminate the higher ones. Apples and oranges, you just can't compare them. Sure, you can compare prices, but what usually is true that if you pay more, you get more. Or better, or faster. You just have to find out what is that more, or better, or faster the client is looking for. Or even go further and try to find out what seems to be client's biggest challenge. That is how you provide the value for their business, and they will acknowledge the price - higher than your competitors - and value of your services and expertise.
It is definitely a sign of good work when clients come back to you. Even though you are not the cheapest. But it is a sign that we provide value with our services, a value which our clients appreciate and understand it in the way it also builds their own business. Let us know what kind of value are you looking for.