Surely people can't love negotiating with a chatbot?
Last week, I had the pleasure of sitting down with Rafe Colburn, Chief Product and Technology Officer at Depop, the UK arm of marketplace giant Etsy. He was our first guest on my new podcast, AI Negotiation Unlocked and a deep expert in negotiation because, lets face it, everyone haggles on Depop and Vinted and eBay.
Over the next few weeks, I’ll be chatting with more fantastic leaders and friends from procurement to B2B sales, in telecoms, insurance, and ecommerce. My aim is to showcase the wide-ranging opportunities for AI negotiation to deliver real value in your organisation, to start a debate and trigger new ideas. Please let me know what you think when you listen, links here, drop me a message on LinkedIn - I am a real person!
Rafe and I kicked off the podacst with a real-world negotiation anecdote that had left him seriously stressed: stranded on the side of the freeway, out of gas, and with no money for a tow. This kind of messy, high-stakes situation is a great reminder that all AI negotiations ultimately involve strong emotions and human counterparts.
We may be designing a digital product, an AI, but it must feel human-like by design. After all, negotiation is both rational and emotional. One of the most common questions I hear is:
"Will my suppliers and customers actually LIKE negotiating with an AI?"
The answer? Emphatically, YES!
Why Do People Enjoy Negotiating with AI?
The key lies in conversation design. Nibble has facilitated over 1.5 million human-to-computer negotiations, giving us a unique window into how people engage with AI. And the data is clear: users treat AI more humanly than you might expect.
Timing: Talking to the Right Person at the Right Time
Rafe made an interesting point: while the vast majority of successful negotiations on Depop are buyer-initiated, seller-initiated negotiations happen far more often. However, pricing high and then offering a tiny discount to a window shopper isn’t an effective strategy. This high-low pricing game doesn't foster loyalty.
In procurement, ensuring that negotiations reach the right decision-maker is critical. Do you have the correct email address? Is your data up to date? Is your outreach going to the right person, or will it land in a spam folder?
In B2B sales, there’s often a fear that if you funnel a potential buyer to a chatbot, a competitor’s sales team will swoop in with a phone call and steal the deal. But here’s the reality: Gartner predicts that over 85% of new decision-makers prefer a digital interaction over a phone call. By offering a chatbot negotiation as an option, businesses can cater to those who want quick resolutions (even outside office hours) without the friction of phone tag or endless email chains.
Who Goes First? Why Anchoring Matters
Rafe shared that Depop significantly improved engagement with their offers functionality by suggesting an initial offer a buyer might like to make.
That’s no surprise to us! When we introduced Nibble Goes First, conversion rates jumped by 40%.
Anchoring is a well-established negotiation principle in academia. The first number put forward in a negotiation has the biggest impact on the final outcome. London Business School professor and senior adviser to Nibble, Niro Sivanathan has demonstrated that you can predict—to the dollar—what someone paid for their house with just two pieces of information: the original listing price and the buyer’s first offer.
So what’s the best strategy? Make a first offer that’s just over the line of acceptable. This creates a structured conversation where both parties work toward a win-win outcome.
For AI negotiation, going first isn’t just a good strategy—it’s essential.
When AI makes the first offer, it frames expectations and keeps the conversation on a productive path. Without this, users often hesitate, submit lowball offers, or express confusion: What’s reasonable? What can I negotiate? What’s the AI expecting?
We’ve A/B tested this, and the results are stark. Without an AI-initiated offer, Nibble’s conversion rates plummet. With Nibble Goes First, conversations are faster, smoother, and far more likely to close successfully.
Keeping It Human
The biggest challenge with automation? Balancing efficiency with maintaining the “win” feeling that keeps buyers engaged.
Rafe and I discussed the rise of AI-on-AI negotiations. Gartner predicts an explosion of “custo-bots” in B2B transactions, and I’ll be talking with the Microsoft Shopping team later in the series about how Copilot could transform online shopping—think a personal AI shopper hunting down deals and making recommendations for you. No more searching for voucher codes!
What surprises me most is how human people treat Nibble. They share personal details, frustrations, and even negotiate in the same way they would with a real person.
One of my customers in India—where bartering is deeply ingrained in the culture—put it best: “If I don’t negotiate with my customers, how can I understand what they really want?” And that’s the heart of the matter. Keeping negotiation human isn’t just about closing a deal—it’s about building long-term relationships.
Find out more from Nibble's experience negotiating 100,000 times a month here.
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