I've written before about the plague of lowballing that infected the design industry for a few years. Sites like eLance and Guru.com seemed like a great way for designers and clients to find each other, but that promise never materialized. Instead, it became a seething pool of 'designers' who would use stock images and templates and call it original work. It wasn't at all uncommon to see clients demanding work on spec, websites for $30, and other horrors.
This used to cause me a huge amount of consternation. I'd spend hours scouring these sites for reasonable work for reasonable clients, and come away with nothing. Many clients would insist that they could pay their nephew $100 for projects that were roughly 40 hours' worth of work. Those people, I avoided like they had swine flu; it's not worth it to try to convince them that design is a worthwhile investment. On the other hand, some of the clients were genuinely decent people who simply had no idea what design cost, or what a realistic hourly rate was. With them, I could have a conversation about why good design was important; what design could do for their business; and what they should be looking for in a designer, even if they didn't hire me. Then there were the very, very rare clients that knew the value of design and didn't blink when I gave them my bids. Alas, I saw maybe two of those a year; but one of them has been a longstanding client of six years.
Lowballing isn't just simply having the lowest bid on a project, which is an important distinction. It's bidding so low, that it's entire orders of magnitude removed from the other bids. Here's an example: I'm an art director. I often send specs out to printers for their bids. I've been doing this long enough to have a reasonable idea of roughly how much a print job should cost, and I'm well aware of the service triangle (good, fast, cheap; pick two). So if I send out specs for a job that should cost $5000 to three printers, and I get bids back for $5200, $4800, and $600 -- I don't get ecstatic about the $600 bid. Instead, I wonder if they misread the job specs and are thinking I want something simply photocopied. (Oh, it's happened.) If they didn't misread the specs, and are instead claiming they're going to be able to print my $5000 job for $600, they're lowballing.
"Lowballing isn’t about competition; it’s about desperation and fear," Leslie Burns-Dell Acqua wrote in her article, "New Challenges from the Lowballers...and What to Do." And that's completely true. It's not about true competition, or providing a better quality of service for less money. It's more often than not providing substandard service for substandard pay, and hoping to make up the difference in sheer volume.
Luckily, things have now changed. Enough firms have been burned badly by the lowballing designers -- who tend to cut corners, do slipshod work, and often don't support their work once the project's over -- that they're beginning to understand that you really do get what you pay for.