When it comes to negotiation, it pays to be prepared. Neglecting planning is a common mistake that novice negotiators make when gearing up for procurement or sales discussions.
Those who take the time to prepare and develop repeatable processes around planning and research not only have the information they need to succeed but enter the room with a level of confidence that is often the defining edge of a successful outcome.
So, where does artificial intelligence (AI) fit in? It has shown itself to be quite a useful tool for analysis—meaning those who use AI for negotiation preparation can unlock deeper insights more quickly.
In short, while it’s easy to gloss over trending technology, those who master AI and how it fits into the negotiation puzzle will undoubtedly have an advantage in the coming years. At RED BEAR, we’re focused on a comprehensive picture of what it takes to succeed in negotiations. That is why our methodology, rooted in the fundamentals, is utilized by over 45% of the Fortune 500.
As new negotiation tools become available, our approach offers the flexibility to adapt to these changes. Let’s explore how your team can use AI in negotiation planning, covering five effective techniques.
1. Use AI to Analyze Historical Data for Insights
AI can analyze data almost one thousand times faster than a human user.
“AI can analyze data almost one thousand times faster than a human user. “
How? AI models leverage advanced algorithms to pour over vast amounts of data—for example, a company’s previous deals or publicly available financials—to deliver deeper insights that can become essential to crafting an effective negotiation strategy.
These AI models use technologies like machine learning (ML) or natural language processing (NLP) to deliver these insights. Here are a few examples of the types of insights AI might offer:
- Most successful negotiation methods by deal type
- Optimal sequences and timings of offers and concessions
- Language that can increase/decrease the likelihood of closing
Negotiators can leverage these insights, learning from past successes and mistakes, to better prepare during the initial negotiation planning process. How might this work? Let’s say AI analysis reveals a company’s largest deals consistently involve making the first offer.
Your negotiation team could then apply this insight to future negotiations to drive more optimized outcomes.
It’s important to note that data privacy and anonymization are essential. Above all, your team should strive to protect sensitive information while remaining compliant with data-specific regulations.
While these regulations and compliance standards are currently evolving, there is no excuse for ethical breaches of trust—especially with clients' private data.
2. Predict Counterparty Behavior with AI
AI can also offer insights into how the counterparty might react.
It can assess everything from negotiation patterns and communication styles to probable pain points based on past interactions and information that is publicly available. This can include:
- Email exchanges
- Meeting transcripts
- Press releases
- Earnings calls
From the data you provide, an AI model can predict a range of possible reactions and countermoves. It can help answer questions like, “What communication channels are best for this person?” or, “What are their likely objections or emotional triggers?”
Understanding these potential moves can empower negotiators to prepare effective responses and counter-offers.
Much like our previous points on data privacy and security, companies leveraging AI must also consider the ethical implications and responsible use. Always make sure to anonymize personal data a model might analyze and try to focus on addressing the counterparty’s needs rather than find areas of exploitation.
Trust is the glue that binds successful partnerships together. While AI can be a useful tool, it’s never more valuable than trust with a client.
3. Enhancing Market and Competitor Analysis
AI tools can continuously scan and compile market data, news, and competitor activities to provide negotiators with up-to-date intelligence.
They can leverage industry reports, news websites, competitor press releases, and analyst research much faster than a human user and deliver your side a competitive edge.
Here are a few examples of the types of market insights AI excels in analyzing:
- Prevailing market prices and discount levels
- New product/service offerings from competitors
- Emerging alternative solutions
- Relevant macroeconomic or geopolitical developments
These comprehensive and real-time market insights can equip negotiators with the information they need to position their cases advantageously.
Here’s what that may look like in action. Let’s say that during the initial market analysis phase, your AI model highlights that a competitor recently announced a price increase. In light of this revelation, you decide to hold firm on pricing instead of making a financial concession.
In any use of AI technology, data preparation is critical. Here are a few steps for using AI for market intelligence:
- Identify authoritative sources of market and competitor data to feed into AI tools.
- Cleanse and normalize data to ensure accuracy and reliability.
- Anonymize any sensitive information before analysis.
- Use AI to process data and generate insights.
- Evaluate insights and determine strategic implications.
- Update negotiation approach and materials.
Using AI for negotiation in this way can lead to significant time savings relative to manual research methods. Just remember to use this information alongside a comprehensive approach to negotiation and not lean solely on this technology.
4. Optimizing Offer and Concession Strategies
Another way that AI can assist in the negotiation planning process is through running simulations around the prediction of certain outcomes relative to opening offers, concessions, or trade-off scenarios.
AI models can predict possible outcomes based on combinations of price, volume, and contract length and how they might affect the likelihood of closing.
This enables negotiators to pressure test possible strategies in advance and identify the right approach that can balance value capture with relationship building. Moreover, AI can spotlight possible gaps in a strategy and identify risks in different scenarios.
Here are a few ways this might play out:
- Determining the optimal first offer based on historical acceptance rates.
- Identifying the best pattern of concessions to trade for a key ask.
- Quantifying the impact of stretching the customer's payment terms.
5. Personalizing Communication and Engagement
Personalization is a powerful concept. In fact, most people associate personalization with positive sentiments like trust.
AI can be a powerful tool to enhance these feelings. AI can analyze a counterparty’s communication patterns across multiple channels like email, instant messages, voice, social content, and more, to help identify a preference:
- Communication style and tone (e.g., formal vs. casual)
- Messaging themes that resonate (e.g., ROI vs. ease of use)
- Interaction format and frequency (e.g., structured meetings vs. informal check-ins)
With these AI-driven insights, negotiators can refine their communication approach to match the needs of the other party. This can bolster trust and further build rapport—an essential goal of successful long-term relationships.
For instance, a data-driven client might require a shift in communication style, with negotiators opting for ROI metrics and quantitative updates over other approaches.
It’s important to understand the value of AI as a tool, not a replacement for your team’s own intuition and experience. They work well when combined with genuine human interaction. This can create the authentic connection needed to drive further engagement, resulting in better overall deals.
Navigate the AI Age with RED BEAR
AI and negotiation can be a powerful combination. But, it’s important for negotiators to understand that these types of discussions, whether in procurement or sales, are inherently driven by human interaction.
Here at RED BEAR, we focus on a tested methodology that leverages foundational elements of effective negotiation, transforming individuals into world-class negotiators who value collaboration, human connection, and long-term relationships. In the right hands, AI can complement these concepts, offering negotiation teams deeper insights that can further optimize outcomes.
Ready to get started on your own negotiation journey? Connect with the RED BEAR team today to learn more about your workshop options.
