When I was a photographers' rep, I encountered lowballing all the time. Clients would say, "This guy came in at under half what you want." Sometimes we'd lose projects to these lowballers (when money was the deciding factor), sometimes not (when creative was). Now that I'm a consultant, I still hear from agencies that say that they often get bids from photographers (and other creative professionals) that are incredibly low and/or that include all rights. While we all want to think that a freelance creative professional is chosen more often than not for his/her abilities, often the reality is that a client can find good creative for an incredibly low price...thanks to lowballers who are ruining the industry.
So, just what is lowballing and why is it really bad for all of us?
Many people define lowballing as the act of charging less than your competition. That's not an accurate definition. Lowballing is charging less than the fair market price. The difference between those two definitions is enormous.