WHAT STARTED OUT as a way to make some extra cash quickly turned into a big revenue generator for Taras Vovk, co-founder of Chicago web design firm Zallas Technologies.

For the past three years, Vovk has been using so-called fee-for-service web sites like Guru and Elance to sell his firm's web design and Internet marketing services online. The sites allow him to dig up clients that he probably wouldn't have been able to find on his own. And for hundreds (or sometimes thousands) of dollars he charges per project, the extra time he spends online has been well worth it. Last year, his online services brought in $180,000 in revenue, almost one-third of his company's total sales of $600,000.

But veteran users of fee-for-service sites like Vovk are starting to notice that it’s getting a little crowded in cyberspace — and competition is heating up. In February 2008, the number of contractors registered at Guru rose 25% year-over-year. In the past three months, registered users on Elance rose 27% to more than 81,000.

Simply listing a company’s expertise and services just doesn’t cut it anymore. “Today, it’s all about standing out and convincing people that are going to spend money on you that you’re well qualified," says William Baker, a marketing professor at San Diego State University. Profiles need to provide exemplary work samples, positive customer feedback and other endorsements – and businesses also need to get strategic about marketing themselves, says Baker.

Here are five ways to help your business build a unique online brand:

Use site tools to your advantage

On Guru, potential clients have access to a ranking system, which tracks data on each contractor’s performance including the number of successfully-completed projects, the business’ earnings at the site, and its ability to retain clients over time. Boost your score by making sure paid funds go through the site’s escrow payment system and asking clients to rate your services.

Elance, meanwhile, offers more than 250 skills tests designed by New York training-certification company ExpertRating that businesses can take to improve their credentials. DaveZillion, a site that connects people who need help around the house with contractors and other handymen, offers referral networks that allows clients to refer good contractors to those in their friend networks.

Offer niche services not offered elsewhere

If your firm specializes in branding or a specific type of law, advertise it. That way, if a customer conducts a keyword search for specific skills, your company will pop up, says Baker.

Prove that you’re an expert

Highlight past projects, awards and work samples or portfolios. Vovk’s Guru profile, for instance, includes examples of his company’s past web design work and boasts that his firm is rated number one in the web design category at the site. Another helpful hint: Include references from previous employers and ask clients to leave comments and reviews, says Fabio Rosati, chief executive of Elance.

Offer Free Advice

Jason Barron, owner of SJB Home Improvement, a contractor in Rocky Hill, Conn., typically uses DaveZillion.com to reach homeowners looking to make quick fixes or embark on big remodeling projects. But these days, he’s finding that homeowners are more interested in getting his advice. Now, he answers around a dozen questions about home improvements each week — mostly free of charge. He's betting the payoff will come further down the road. “I’m hoping that will generate future leads for me,” he says.

Use Other Networks to Advertise Your Service

Ryan Kappel managed to turn his side gig in online youth and family counseling on LivePerson into a full-time job last summer. Now, about 10 to 15 clients regularly pay $2 a minute to chat with him each week, he says. Kappel expects to earn $50,000 in profits this year. To further promote the services he offers on LivePerson, Kappel recently joined Twitter. Today, about 110 people follow his four to five daily posts about interesting articles on health and counseling and other topics. “[If] I make comments about things, that makes me more real and a person others want to talk to,” says Kappel.

-Write to Diana Ransom at dransom@smartmoney.com

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