The soaring demand for customized products is changing how companies design and sell using a product configurator.
Companies are moving away from mass production and increasingly adopting a product configurator to enable customized configurations at scale.
A robust product configurator is the difference between getting orders right and dealing with expensive mistakes in manufacturing that put the business at risk.
What is a Product Configurator?
A product configurator is a software solution designed to help users customize a product to their exact specifications. A robust product configurator supports configuration logic and validation to ensure feasibility and compliance.
It is only after the configuration rules engine validates an input that the user can continue customizing the product. The elegant simplicity of a product configuration process is based on building and validating complex product rules.
Error Free Quotations
Rather than manually generating quotes and specifications, businesses use product configurators to automate this process, speed up the time needed to issue a quote, reduce errors, and dramatically shorten time to market.
Product configurator software builds a smooth and automated sales process and an improved customer experience. By managing product features and pricing, sales reps are spared from having to keep track of that data by themselves.
What Makes a Product Configurable?
Simply put, if a product can be customized, then it's configurable.
Products with many features or variations can be customized either by the customer or the business.
For instance, a buyer selects a blue car with a sunroof.
On the other hand, the business (or manufacturer) uses a configurator to make sure that the product is compliant with all the relevant regulations — for example, a device sold on the European market runs at 220V and not 120V which is the case in the United States.
When to Consider Using Product Configurator Software?
If your business is experiencing difficulty in generating proposals in a timely manner or providing real-time pricing, then a product configurator can automate this time-consuming task.
Also, a product configurator can help manufacturing companies auto-generate product information while reducing the likelihood of human error.
Large e-commerce businesses rely on product configurator software to allow all of their visitors to customize products according to their needs and tastes.
Consumers expect personalized products and a smooth online purchasing experience.
Product and pricing rules that run product configurator software ensure that every configuration is tailor-made to customers' specifications and the company's profitability.
Once they confirm their specification, customers can then proceed to make the purchase.
The Benefits of Product Configuration
Product configurator software reduces the likelihood of mistakes and cuts down on both lead onboarding time for new hires. It also gives companies greater control over production by optimizing communication internally (between different departments) and with customers.
Software solutions that can be used by both the employees and customers give companies the ability to choose who should be managing the configured order.
Let's take a closer look at how product configurators help businesses thrive.
Optimized Sales Processes
Product configurators are closely related to the sales quotation and order process.
Sales reps do more than convert leads into customers. In fact, only a third of their time is spent selling. A part of their time is spent generating quotes and proposals.
To streamline the sales process, businesses use a rules-governed cpq solution (which stands for configure, price, quote). This way they are able to generate quotes at a faster pace, drastically cutting down on approval time and onboarding of new reps.
Product configurators optimize dynamic pricing, self-generated quotes, and workflows. These are the critical pieces of an efficient sales process.
Streamline Business Processes
There are many moving parts to helping customers select various configurations — managing multiple variables, such as pricing, expenses, quotes, source materials, and licenses to name only a few.
Traditionally, important information related to sales was kept in different systems or on various desktop computers around the office. As a result, data would often grow stale or be incomplete because there'd be several copies of documents floating around the company.
This inevitably resulted in bottlenecks and errors.
Product configurators were introduced to reduce the occurrence of faulty data.
Apps that run rules-based product configurator software guide consumers to options they can actually make, which streamlines the process.
Help Your Sales Teams
It takes time for salespeople to become familiar with all the features, specifications, and compatibility issues of complex products. Companies can standardize and manage all the relevant configuration information in one place, irrespective of the product that requires configuration.
Making this information available to sales reps allows them to focus their attention on customers. For instance, a configurator can remind a sales rep when they should cross-sell or upsell.
Upselling is a great way of increasing profits. However, it can be challenging for sales reps to find the right combination of options for every product. That's why a rules-based CPQ solution can instantly put forward the ideal service solutions for every possible customer requirement.
Fewer Costly Errors
While order returns are an unavoidable fact for all businesses, product configurator software can significantly reduce their occurrence.
The configurator disallows incorrect entries, regardless of the complexity of the product. This virtually cuts mistakes down to zero and helps reduce order returns.
Product Configuration Across Industries
Businesses across various sectors greatly benefit from using product configurator tools to create custom products. Digital product configurators are driving innovation in industries such as property and casualty insurance, enabling insurers to quickly adapt to changing market demands. Digital transformation and innovation are key drivers for adopting product configurators, especially in the insurance sector, including property and casualty lines. Let’s take a closer look at how configuration can give companies an edge over their competitors.
E-Commerce
Many retailers have several sales channels and want their customers to have a consistent customer experience, regardless of the channel on which they choose to interact with the business. Therefore, when a customer goes to a retailer's online store, they should have the same options as if they went to a physical store and interacted with a dedicated sales rep.
Also, the online store should allow the business to upsell. For example, when a customer buys an armchair, on the checkout page, there should be a suggestion for a carpet that matches the fabric of the chair.
Online product configurators allow consumers to personalize their purchases in real-time. Whether consumers are looking for t-shirts or electric scooters, online configurators enable them to pick the size, materials, color, design, and a plethora of other options.
Online product customization provides huge advantages both for businesses and consumers alike. Items that are customized online can sell for up to 50% more than those bought in-store.
And once we factor in the reduced costs of running an e-commerce business compared to retailers who rely largely on physical storefronts, the benefits of product configuration to online shopping are undeniable.
E-Commerce Use Case
Let's take an example of an e-commerce business that lets customers personalize their own t-shirts. The website offers a wide range of features to choose from before making the purchase, such as color, stitching, sleeve length, collar fabric, material, size, design, etc.
Whenever a customer makes a choice, incompatible options with that choice would be disabled.
For instance, certain print designs are only available on t-shirts that are 100% cotton. If a customer tries to select a t-shirt that is 50% polyester, then those print designs will not be available.
Insurance
Clients are sometimes required to fill out a health questionnaire when buying life insurance products. A product configurator can edit or reorder the questions, update the algorithm that sets rates on premiums, and enable insurers to quickly update and manage coverages to meet changing market needs. Insurance product configurators also allow forms to be generated or managed within the system, streamlining policy administration and ensuring all required documentation is up to date.
Additionally, insurers can test insurance product configurations before launch to ensure accuracy and compliance, often using sandbox environments. Advanced configurators use rule engines to automate complex decision logic, allowing rules to be managed, versioned, and audited for transparency and control. Low-code product builder tools empower business users to create and launch products without IT involvement, accelerating the process to launch products and adapt to evolving market needs. Configurators help insurers rapidly launch new products to new markets, expanding distribution channels and responding to diverse market demands.
Modern configurators can integrate with existing systems, such as policy administration systems, complementing rather than replacing them, and ensuring seamless interoperability. Many insurers leverage Excel spreadsheets for rating and actuarial calculations, and these configurators can integrate Excel logic directly into digital workflows for quick updates and automation.
Also, a single risk could be reused in many different insurance products but with different attributes. For example, the insured sum, premium ranges, or additional requirements for clients can be changed to meet the needs of each client.
Ensuring Regulatory Compliance
In the highly regulated insurance industry, ensuring regulatory compliance is not just a requirement—it’s a critical factor for success. A rules-based product configurator empowers business users and product managers to define, manage, and control underwriting rules, pricing rules, and product variants, all while staying aligned with evolving market regulations.
With a robust product configurator, business teams can create and launch new insurance products tailored to specific market segments, confident that every step of the process meets regulatory standards. The platform enables users to streamline the product development process, reducing the complexity of compliance by embedding regulatory requirements directly into the configuration and approval workflows.
One of the key advantages of a modern product configurator is its ability to support detailed documentation and provide a clear audit trail for every insurance product version and configuration change. This documentation is essential for regulatory reviews and ensures that insurers can demonstrate compliance at any point in the product lifecycle.
Seamless integration with existing systems allows for accurate data capture and management, minimizing the risk of non-compliance due to data inconsistencies or manual errors. The configurator’s flexible configuration options and templates enable business users to quickly adapt insurance products to meet new regulatory requirements or market changes, without the need for extensive coding or IT resources.
The built-in rating engine and advanced pricing rules ensure that premiums are calculated accurately, supporting both risk management and regulatory compliance. Product managers can easily define and manage product versions, ensuring that only compliant insurance products are launched and maintained in the market.
By putting business users in the driver’s seat, the product configurator gives insurers the agility to stay ahead of regulatory updates and market shifts. Teams can rely on the platform to support the creation, testing, and launch of compliant insurance products, reducing time to market while maintaining the highest standards of compliance and risk management.
Ultimately, a rules-based product configurator is an essential tool for insurers who want to maintain control, reduce risk, and ensure that every insurance product they launch is fully compliant with all regulatory requirements—now and in the future.
Choosing the Right Product Configurator Software
In the past, companies used to rely on spreadsheets to keep track of products, pricing, features, and options. Many insurance companies still use Excel for rating and product configuration, leveraging existing Excel spreadsheets to calculate rates and integrate actuarial logic. Modern product configurators can integrate Excel logic, allowing for quick updates and automation within digital insurance solutions. Oftentimes, crucial data would become obsolete, incomplete, or even duplicated, which led to inaccurate quotes.
Product configurators eliminate these deficiencies and liabilities while optimizing the process for both companies and buyers. When selecting and implementing a configurator, it is important to clearly define the scope of the project to ensure it meets business needs, stays on budget, and aligns with resource allocation.
Sales teams need to be able to show customers available products along with their features and pricing in a timely manner. A well-designed product configurator will include a wide range of useful options, such as rules-powered configurations and complex pricing calculations that streamline the entire sales process.
Integration with Software
Product configurators can operate in a silo on their own. However, that’s generally not the best approach. A robust product configurator should be able to integrate seamlessly with other business applications and systems. A product configurator should have the proper APIs that allow for easy integration with other enterprise software, apps, and databases.
For example, a product configurator needs to be able to connect with critical systems like CRMs that keep track of quote data and customer preferences.
Flexible Rules Engine
A business rules engine defines all of the conditions for accurate configuration, pricing, and outputs of the order.
However, buyers really need to be careful when shopping for CPQ solutions. While many vendors like to claim that their product configurators are run by powerful rules engines, very often this is not the case.
When you scratch the surface, you'll find that they are simply using very basic filtering, bundling, and custom code to handle the configurations. That's why it's important to be certain that your cpq software tool can seamlessly handle complex business rules.
The most critical component of a product configurator is the rules engine.
Buyers should look for a business rules engine that is easy to run, manage, and requires little training to use.
It's a good idea to ask your vendor to show you how they organize their rules before making a purchase to avoid unpleasant surprises during implementation.
Rules-Based Product Configurator
When properly set up, a product configuration tool can propel your company to unprecedented levels.
A robust CPQ (configure, price, quote) solution that's powered by a rules engine allows companies to immediately respond to the changes in the market and remain competitive.
Proper configuration helps businesses to:
- Get rid of inefficient manual sales processes that rely on spreadsheets and catalogs.
- Empower clients to personalize and configure complex products on their own.
- Scale without expensive and complex IT infrastructure investment.
We built Higson to help businesses of all sizes meet these goals.
Higson
Higson is a robust, rules-based product configurator that empowers users to customize complex products in real time without having to wait on the IT department for support. Higson works for both businesses and customers, which helps boost customer satisfaction.
This rules-based product configurator provides the necessary flexibility to configure products based on characteristics and options to meaningfully simplify the quote-to-order and the production process:
- The quotes cover all the necessary components which get rid of the need to resubmit a quote because an important product component wasn't included.
- Accurately set pricing and discounting rules. Advanced pricing options include volume discounts, pre-negotiated contract pricing.
- Sales pipelines are instantly updated as quotes are generated. This way companies see which quotes need following-up and which have expired, thereby boosting productivity.
- Renewal quotes are guaranteed to be accurate. When renewal time comes around, renewal quotes are automatically created using validated customer data. Also, Higson keeps track of things like original quotes and add-ons so that there's no need to use renewal reminders.
- Sales teams can generate and manage quotes with ease. Changing quantities, adding features and discounts to configure the best solution for clients and prospects alike.
Higson is the product configurator that makes a difference in business operations. Get in touch with us today to see how you can easily configure even the most complex products using Higson.