Product configuration gives buyers and sellers the ability to configure products to their exact specifications. It’s a win-win: buyers get more choice and ownership over the products they buy, while sellers can charge more and improve customer experience.
But the benefits of product configuration are far more profound, and this article sheds light on every advantage. Read on as we answer the question, “What is product configuration?” and explain how it can increase manufacturers’ efficiency by 34%, sales volume by 30%, and profit by 20%.
- What is Product Configuration?
- Product Configuration Software
- Multichannel Benefits for the Modern Buyer
- Why Buyers Love Product Configuration
- Product Configuration Can Be Highly Visual
- Pricing Is Available Immediately
- Frictionless Ordering Process
- Why Suppliers Love Product Configuration
- Sales Generate More Profit
- Engineering Can Focus on R&D
- Back-Office Becomes More Efficient
- Everything is Integrated
- Manufacturing Requires Fewer Checks and Balances
What is Product Configuration?
Product configuration is the process of tailoring a product to a customer’s needs by selecting and arranging parts in a particular order. Every customer has different goals and constraints, so a custom product usually provides more value than a one-size-fits-all alternative. As such, buyers are prepared to pay a premium for custom goods, giving manufacturers that offer product configuration a distinct competitive advantage.
The product configuration process is usually carried out by a manufacturer’s internal sales personnel in conjunction with a customer. Sometimes, it’s a distributor that configures the product. These days, however, it’s becoming increasingly common for the end buyer to be the one configuring products for themselves using advanced product configuration software embedded into an eCommerce website.
Product Configuration Software
Product configuration software automates the sales process to a high degree, allowing for straightforward customization of the most complex products via a guided experience. The software contains pre-programmed rules that dictate how products can and can’t be configured (which parts are compatible or incompatible, where the limitations of a particular material lie, etc.). It stops users from configuring “impossible” products (i.e., one that can’t be manufactured efficiently or won’t operate effectively in the real world).
Product configuration software streamlines the entire sales portion of the make-to-order or engineer-to-order process, turning a once slow, manual, error-prone series of events into a fast, automated, error-free workflow. Traditionally, sales reps had to sit down with customers, translate their requirements into product options in their heads, work out prices in spreadsheets, and go to engineering to get custom drawings. Today, configuration software can do all of this automatically, configuring better products faster to reduce costs and provide a superior customer experience.
Multichannel Benefits for the Modern Buyer
Today’s buyers have varying purchase preferences–they want to interact with your brand and buy your products in different ways. In the past, buyers preferred to deal with a knowledgeable and experienced sales representative, especially when sourcing complex and expensive products. Today, however, more buyers want to buy online.
But purchasing configurable products online is challenging. 77% of buyers say that their most recent B2B purchase was complex or difficult. Product configuration software, which manufacturers can embed into an eCommerce website, is designed to reduce this figure and make life easier for your customers. Product configuration software is the tool you need to stand out online and capture more of the market.
Why Buyers Love Product Configuration
Product Configuration Can Be Highly Visual
With product configuration software like Tacton, manufacturers can provide rich, visual configuration experiences for their customers. Instead of talking through product configuration in hypotheticals or looking at generic product photography, customers can configure products in 2D or 3D environments, giving them greater confidence in their choices.
AR and VR product configuration is becoming increasingly popular. These new visual technologies make the customer experience even more immersive and compelling, while improving decision-making.
Pricing Is Available Immediately
Buyers don’t have to wait for salespeople to crunch numbers, seek approvals, or request information from engineering before receiving a price for their configured product. Product configuration software generates prices in real-time as products are configured, feeding this information to the user in real-time (depending on the seller’s preferences), dramatically shortening sales cycles.
Frictionless Ordering Process
Predetermined engineering rules constrain product configuration in such a way as to eliminate errors and back-and-forth from the ordering process. Every configuration is optimized and manufacturable, pricing is instantaneous, and this information flows into an accurate quote that customers can immediately access. A configure, price, quote process that once took weeks can now take minutes.
Why Suppliers Love Product Configuration
Sales Generate More Profit
Manufacturers that use product configuration software experience a 7% increase in sales and a 10% higher win rate. Customers get a choice of sales channels and consistency as they move between them. And sales reps can serve customers with better products, more quickly, in more compelling customer experiences.
Another massive benefit of product configuration is the impact on training. At a time of chronic skills shortages in the manufacturing industry, product configuration software helps bring new hires up to speed in days by automating the configuration process and eliminating mistakes.
Related to this struggle, onboarding new sales reps can be a considerable challenge. New hires have to understand products so profoundly that they can act as sole configurators. They need to know every option and what can be, and cannot be, produced. With product configuration software, all this knowledge and decision-making is handled within the engine. It’s so straightforward that customers can even bypass sales to configure products for themselves.
Engineering Can Focus on R&D
In addition to prices and quotes, the right product configuration software can automate the production of models and drawings for engineering that ultimately get fed back to sales to aid the customer’s purchase decision. Reducing this workload makes the engineering department far more efficient. Engineers can funnel their efforts into R&D, improve product quality, create new product offerings, and work on highly custom situations that fall outside the scope of standard product configuration norms.
Back-Office Becomes More Efficient
Having only clean, complete, error-free data flowing through the business makes every back-office function more efficient and less frustrating:
- Order processing and fulfillment run smoothly.
- The accounting department doesn’t have to waste time identifying random payments.
- Inventory management becomes more efficient when an excess stock doesn’t have to be stored “just in case.”
Everything is Integrated
Data is the cornerstone of effective product configuration. Robust product configuration software like Tacton integrates with all of your other front and back-office systems. It serves as your single source of truth for manufacturing. It pulls 3D models, product attributes, pricing tables, pricing rules, and customer data. It outputs quotes, BOMs, renderings, CAD 3D models, and drawings, feeding ERP and CRM the data they need to automate hand-offs behind the scenes and provide frictionless buying experiences.
Manufacturing Requires Fewer Checks and Balances
The accuracy and immediacy of auto-generated BOMs is a total game-changer for the shop floor. Knowing that the information they have on-hand is accurate improves efficiency while fewer mistakes reduce waste of physical and human resources. Some manufacturers still develop BOMs while products are being produced, creating all kinds of inefficiencies.