Episode #464 – Chris Krause
Meet
Chris Krause
Accomplished and multi-faceted supply chain executive with over 30 years of progressive experience within procurement and supply chain. Expert in change management and organizational restructuring with a consistent record of improving profitability and supplier performance. Proven ability to facilitate corporate success through leadership of business initiatives in areas such as strategic sourcing management, supplier management, project management, cost control, and supply chain. Had positions in project management, supplier quality, VAVE manager, buyer, adjunct professor, business owner, business development and business proposals.
Our Mission Is To Change The Negative Perception Of Sales People
Our Vision Is A World Where Selling Is A Profession To Be Proud Of
In this episode, I sit down with Chris Krause, a seasoned supply chain executive with more than 30 years of experience in procurement, change management, and organizational restructuring. We get under the skin of negotiation strategy and tactics—exploring everything from the difference between planning and action to the essential role of data, preparation, and goal alignment in high-stakes deals.
Chris shares his proven rule of thumb for negotiation preparation, his top tactics for gaining leverage, and invaluable advice on handling aggressive negotiation moves. He also tells an illuminating real-world story, highlighting the importance of transparency, open communication, and mutual respect—even when negotiations get tough.
Outline of This Episode
- [03:23] Chris’s top three negotiation tactics
- [05:25] Focus on goal alignment before pitching to understand client needs
- [07:31] Complex negotiations require goal alignment and multiple rounds to achieve the best outcome
- [09:58] Win-win scenarios in negotiations ensure long-term relationships and prevent future conflict
- [12:19] Keeping communications and dialogue open
Distinguishing Strategy from Tactics
Understanding the foundation of successful negotiation begins with clarity on terms. Chris Krause highlights a crucial distinction: strategy is your overarching plan, crafted before the negotiation starts, while tactics are the actions employed during the negotiation itself.
Strategy is about setting your objectives, outlining concessions, and knowing your limits. It includes data gathering, goal setting, and scenario planning.
Tactics come into play at the negotiation table—your body language, the way you present your case, and how you respond to offers. Whether negotiating face-to-face, walking side by side, or even over casual conversation, tactics are the tools used to achieve the strategic goals you’ve set.
The Power of Data and Preparation
Before any high-stakes meeting, Chris’s go-to strategy is to amass as much data as possible—not just about his own position, but about the other party as well. This includes:
- Market studies: Understanding where the product or service sits within the broader landscape.
- Internal cost/benefit analysis: Knowing your bottom line and what you can afford.
- Budget cycles (on both sides): Are you or your partner under financial pressure? Has there been a recent company shakeup or market shift?
Armed with this knowledge, negotiators move from a position of power, specifically, the power that comes from knowledge. Chris advocates a “five to one” rule: for each hour of negotiation, spend at least five hours preparing. This encompasses scenario planning, identifying must-haves vs. nice-to-haves, and determining both concessions and firm asks. In his words, “Planning, preparation, and positioning” are the three Ps of negotiation excellence.
Top Tactics to Gain Leverage
Chris shared his three favorite tactics for gaining leverage in challenging deals:
- Cost Analysis: Establish a baseline of what the product or service should cost, based on robust data.
- Competitive Market Analysis: Ensure you understand current market pricing so you can position your offer competitively.
- Partner Analysis: Dive into your counterpart’s fiscal health—knowing if they are under pressure to close deals or expand markets can open the door for favorable terms.
He refers to this comprehensive approach as his “trifecta” for negotiation success.
The Secret Sauce in Complex Sales
One of the most valuable strategies in complex negotiations is what Chris calls “goal alignment.” Rather than rushing into a pitch, engage first in an open conversation to establish what both sides need to achieve. Are they solving a quality issue? Chasing cost savings? Seeking a new technology?
Especially for salespeople, Chris warns against focusing solely on your own objectives. Self-centered pitches quickly turn off experienced negotiators. Instead, understanding and aligning with the buyer’s business priorities sets the stage for trust and long-term partnership.
Countering Aggressive Tactics and Building Trust
High-stakes negotiations sometimes involve aggressive tactics—last-minute demands, take-it-or-leave-it offers, or extreme anchoring. Recognizing these moves is part of the game, but Chris emphasizes sticking to your strategy and being prepared for multiple rounds of negotiation. Rarely, he says, is a one-and-done deal the most fruitful.
Mutual respect and keeping communication open, even when emotions run high, are vital for coming through tough spots and ultimately reaching an agreement.
Connect With Paul Watts
Audio Production and Show notes by
PODCAST FAST TRACK
https://www.podcastfasttrack.com
Learn More About Chris Krause
1. What are the key differences between negotiation strategy and negotiation tactics? How should they complement each other in a deal?
Negotiation strategy is the plan on what you want to accomplish. Negotiation tactics are the acts or actions you are taking during the negotiations.
2. What is your go-to negotiation strategy when entering a high-stakes deal, and why has it been so effective for you?
My go to negotiation strategy is focused on data. Have the most comprehensive data prior to the negotiations is key for success. This could be in the form of market data, cost data, sales person’s company data or financial information and internal budget data.
3. Can you share your three favorite negotiation tactics that have consistently helped you gain leverage in challenging deals?
My most favorite negotiation tactics reside around goal alignment. Making sure the sales person understands what we are trying to accomplish. Whether it be cost efficiencies, quality improvements, lead time or product launch goals or even design improvement. Make sure we are aligned on what we are trying to accomplish is key.
4. What role does planning have in the development and use of negotiation strategy or tactics in a high stakes business negotiation?
I normally follow a 5:1 rule for my negotiations preparations. This is 5 hours of planning and preparation for 1 hour of negotiations. I call this the 3P’s of planning, preparation and positioning. This entails what are my starting points, concessions and where I think we will land in our negotiations.
5. What are the most common negotiation strategies used in complex sales, and how do you determine which one is most effective in a given situation?
I heavily rely on data. I utilize market data, my costing data, competitor or cost comparison data along with company financials. I believe having a data driven discussion provides the most successful outcomes. Additionally, I look at what my sales person’s data is. I try to understand what are their goals and objectives and overlay that into mine to understand their desires and needs for their business. This could be increased revenue, new product introductions, quality improvements, margin growth or other areas.
6. How do you recognize and counter aggressive negotiation tactics such as anchoring, take-it-or-leave-it offers, or last-minute demands?
I begin with transparency and goal alignment. I try to explain what I am trying to accomplish, whether it be cost reduction, quality improvement, lead times improvement, new product launch or other business dynamics.
7. What are your Top 3 Negotiation Strategy and Negotiation Tactics, Do’s and Top 3 Don’ts?
The Do’s:
1) Data preparation – market data, internal or external date,
2) Goal alignment on what we are trying to achieve, 3) Transparent communications and discussions.
Don’ts:
1) Lying or misinformation,
2) grandstanding or being obnoxious and belligerent,
3) Loss of credibility. Never do things that will make you lose credibility. Otherwise you won’t ever recover from this perception.
8. Can you share a real-world example where I was working with a pump supplier of mine who offered a very competitive price prior to Covid.
After Covid hit, they retracted this offer and outlined with labor and materials increasing 15-20%, they would not be able to support any cost reduction proposals. After many rounds of negotiations 5-7 rounds, and coming to an understanding on both parties goals, we were able to agree on a two year deal with tired pricing that benefited both parties. The supplier got a guarantee of 2 years of planned revenue where they could plan their operations more efficiently and leverage their supply base better for economies of scale, as a result yielded my team 18% reduction over two years. This methodology is now being used as a baseline for future negotiations. Key takeaways: multiple rounds of negotiations with the intent of goal alignment.
Share This Episode, Choose Your Platform!