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Are software based negotiation tools really necessary?

Technology has changed communication channels, methods, and the dynamics during a conversation. Some brands have moved past the conventional human negotiation and bots to full-fledged software-based negotiation tools. Automating human tasks and delegating it to a robot or software has its own advantages. But, is it really necessary to alter the entire workflow to incorporate a software-based negotiation tools?


Information-rich negotiation

The main difference between a software-based negotiation tool and human negotiator is the reliability of information. A bot can generate an information-rich conversation allowing the client to get to a middle ground during negotiation. While dealing with a software-negotiator, the client can receive consistency in accuracy. This is quite essential while dealing with a complex or premium product in hand, with numerous specification, spare parts, and so on.

Negotiation cost

It is true that installing, configuring, adapting, training, and maintaining a software negotiation tool have its own cost and process. But, in a big picture approach, it is possible to reduce the cost of negotiation by using such tools. A negotiator tool can send 1000 bids in the same time that a human negotiator takes to send 10. How to calculate the negotiation cost?

The common method used is in terms of time and success rate. The time taken for the negotiators to reach the sale agreement and the percentage of negotiation that reaches sale. Under such a calculation, it is profitable to use software negotiators, while dealing with multiple negotiations.

Opponent modeling

According to a study, even when the two negotiators can derive at a win-win situation by sharing exclusive information about the situation, the two parties tried to avoid it in the fear of exploitation. In case of a software-based negotiation, it is possible to reach such information using the data given during the exchange (source). This process is named as Opponent Modeling’.

Under this modeling, the software captures the client’s preferences and style of communication and compares it with a pattern. This allows the software to use pre-measured algorithms to drive the conversation in the way that has higher probability of altering the buyer’s behavior in favor of the agreement.

Storage and analysis

An AI negotiation bot can extract information about the client over and beyond the key metrics and combine them to create a correlating strategy or analysis. AI can identify patterns beyond human recognitions. For instance, in a rental property negotiation, an AI program can generate metrics like efficiency of a commercial property in each zip code, efficiency of the workplace structure, and average price. This analysis-based negotiation will allow the client to reach a win-win ground.

Value assessment

The important task of a negotiator is to calculate the real-time economic value of a given bargain. At the same time, he should also assess the alternative options that could be possibly gained or lost in altering a negotiation in a specific way. Using AI systems, it becomes possible to program it to predict the value of the above metric and update it with real-time data. For instance, if an autotrader USA company wasn’t able to deliver an agreement in time or had to put too much strain on the resources to complete, in the future, the AI would accommodate this knowledge into creating a sensible agreement.


An AI can indeed predict the user behavior for each persona, based on the past conversations. Beyond analyzing the volumes of data to derive information for sales, it is also possible to use the prediction for internal growth, like HR recruitment suggestion, performance appraisal of the sales team, and so on.

It is possible to create a better working environment for the employees without redundant manual-intensive work-load. However, the importance of humans in a negotiation process should never be overlooked. The emotional quotient of a human is currently not possible to be programmed into AI negotiation tools, which is a boon for the negotiation process in the sense that it will be doing its job dispassionately, without any emotional weaknesses unlike a human. Thus, it is important to incorporate a software-based negotiator into your workflow and leave the strategic formulation and emotional factors to your employees.

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Dhaval Shah