As a self employed webmaster I feel your pain. I have struggled for years to get the recognition as a professional that can compete with the hundreds of other companies in my city.
I have chosed to take the upsell and out service approach to retaining and serving the clients I have and gaining new ones.
What I mean is, the current client base you have now can be upsold on additional services. The service every website needs is SEO because lets face it, since the search engine algorithms change every month, SEO is a constant challenge to keep the websites the most relevant to the search engines. I have chosen to keep my prices low and at a fair rate but to offer the upsell of additional search engine optimization.
If you keep your rates lower but at a fair rate for the amount of work you do, then offer more personalized service for your customers. Most people who spend money on their websites want to know how they are doing, what kind of traffic they get, what pages are being clicked on. A free way of offering web traffic services is to create a google analytics account for your customers website. This can help you show that you can provide better service because you can proactively give them periodic web traffic updates, etc.
Keeping the customers you have and getting them to buy additional services is the best way to increase your profit in webmastering. Make sure you provide those services at the highest level, you are responsive to all of their needs and requests, and you are proactive to newer technologies and methods of making their website the most effective it can be.