Needs Assessment vs Needs Analysis

One of the most common conversations I have with professions is regarding when should they begin to get paid for what they do as compared to what should be considered part of the sales process.

I usually begin my response by showing this video.

Great stuff!

I think the answer to the question of when should I start getting paid is another question, “When do you begin to provide value?” Let me give a very specific example.

Many professionals will provide a free needs analysis. OK, fair enough, but what if the prospective customer has not developed a complete list of needs. Should the professional give away an engagement in which they help a customer develop such a list? Isn’t that providing value? I believe it is.

So here is my new answer to this imponderable question: When you are confronted with a prospect who thinks that the needs analysis should be free (i.e., part of the sales process), I would say, “Fine, the analysis of your needs will be free, however, we charge a fee of $X to develop a needs assessment.”


5 thoughts on “Needs Assessment vs Needs Analysis

  1. You hit the nail on the head with the word ‘value’. Clients don’t pay for time or people or needs analyses. They pay for value. We simply use the hours or printed analysis reports as less ambiguous ways to charge for the value. You’re essentially telling them that you won’t charge for the work, you’ll just charge for the value. Btw, great clip from Mad Men.

  2. Thanks for your comment Lew.

    One thought however – hours are ambiguous. True, they are measurable, but they are precisely wrong rather than approximately correct. Using hours to measure knowledge work is like using a ruler to measure temperature.

    For more, take a look at

  3. Needs Analysis is the process of identifying needs – s how canthe client know what they are?

    Don’t conflate it with needs assessment – a totally different animal.

    I charge by what I contribute as a product and not a process – but I still have to equate it to a time-based and resource-based investment on my end.

    1. Sorry for the delay in reply, Ron.

      I agree with the idea of separating the needs analysis from the needs assessment. I agree they are two different things.

      I disagree with you statement that “I still have to equate it to a time-based and resource-based investment on my end.”

      Time is not a resource, it is a constraint. Your hours are not what is of value to you or your customer, but rather your knowledge. The certainly do not represent your costs.

  4. Ed, thanks for the link to the video. Without knowing anything about mad men, I certainly agree that basing a fee purely based on hours means we do not value our own skills and what value we bring to a situation. Either we undervalue ourselves, or we have not taken the time to consider the value of our actions / systems. If we are basing purely on time, then we are a commodity to be traded and “shopped” against. Yes it has worked for many professions and industries for many years, but that does not mean that it enables the provider to be remunerated for the value provided. With a need analysis we provide value. One opportunity (to provide value) at a time!

Warning: Illegal string offset 'cookies' in /home/content/15/4513315/html/wp-includes/comment-template.php on line 2294

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.