Know who your client is.
In no way do I try to be everything to everyone. I shoot in a style that pleases me and my clients seek me out for that look. Price, though not unimportrant, is not why they hire me and they don't care about the CraigsLList photographers as those guys don't produce the look my clients sought me out for. Indeed, I have had not even one client in the past two years ask me if I can do something on price because price is not why they want to hire me in the first place.
If you're look or style is so generic that the free guys can reasonably compete, your problem isn't this client but your artisitic direction. If your work has a signature quality to it, then the only issue is that you were talking with a prospect who can't distinguish your look from anyone else's and she thereforw as never your target client in the first place.