Welcome to the 21st Century. Like everything else on the computer (desktop publishing, for example), digital video editing has become “democratized” so that everyone can afford to do it. The big difference here is what kind of spot you can create and how much better it would be than if they use the next guy.
I think that one of the best remedies is referrals. When I worked in Los Angeles, we didn’t spend a lot of time creating demos— the producer was more inclined to drop a dime on your other clients and find out what it was like to work with you.
But let’s face it: some people with less experience will hire a cheaper editor. Sometimes it works and sometimes it doesn’t. I think the real competition is ourselves. Branding your post facility and services can make you stand out. You won’t bag all of the jobs, but you might just get the best ones.
Just my $.02
Jaime Fowler