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Abhishek sometimes I think all you can do is explain why what you're offering is of value and then leave it up to them to make the decision. I know it sucks to lose a client you think will bring in revenue, but some clients aren't worth the money. This one would probably be a constant struggle and in the end you could easily spend more time trying to get them to understand what is the right approach only to have them go another route and blaming you when their way didn't work out.
I think you handles things well and it's just a case of this client not seeing the value of your services. You can try to help people understand why you offer value, but there's only so much you can do if they won't listen.
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