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.”

Thoughts?

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4 Responses to “Needs Assessment vs Needs Analysis”

  1. Lew Sauder August 18, 2012 at 10:11 am #

    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. Ed Kless August 18, 2012 at 12:41 pm #

    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 http://www.verasage.com

  3. Dr. Ron Polland November 14, 2013 at 9:43 pm #

    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.

    • Ed Kless November 27, 2013 at 12:38 pm #

      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.

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