Product Configurator

Product configurator

What is a Product Configurator?

A product configurator is a cloud-based software platform businesses use to customize complex products according to specific needs and preferences. Sellers and customers visually design products, select parts or components, and arrange settings and features in real-time based on their requirements, preset business rules, and product availability data.

A key component of configure, price, quote (CPQ) software, product configurators are the most valuable part of a smart selling process. Sales reps and buyers don’t have to spend time fiddling with product details, and manufacturers don’t have to worry about order errors.

With a product configurator, customers get the exact item they request (assuming it’s possible to create) in a frictionless sales process.


The Challenge of Configuring Complex Products

The problem with traditional product configuration is multifold — when buyers purchase complex products, they have trouble understanding what they’re buying and its value. But they also prefer to buy without intervention from the sales team.

Gartner Sales Insights reveals that 77% of B2B buyers describe their last purchase as “very complex or difficult,” while the vast majority (83%) prefer to make seamless purchases through digital commerce solutions.

And sellers have their own problems. Spending too much time making custom configurations and waiting for approvals is a huge part of why they only spend 28% of their time selling.

The end result is:

  • Lost sales from customers that drop out of the buying process due to lack of understanding, frustration with inefficiency, difficulty in customizing products, or exhaustion
  • Unproductive sales reps who spend too much time configuring products with customers
  • Lead time between sellers and leadership members who need to approve product configurations
  • Inaccuracies and revenue loss due to outdated product data

Without product configuration software, there is a critical gap in vendors’ relationships with their B2B buyers: Lack of transparency in pricing and product availability and an inability to see the finished product make it hard for sellers to do their jobs efficiently, and impossible for customers to carry out the process themselves.

The Product Configuration Process

The product configuration process differs depending on whether buyers or sales employees carry it out. 

Fundamentally, buyer-side configuration takes place on a web-based storefront where customers can easily select the features and components they desire. Sales-side configuration occurs when reps configure products on behalf of buyers via their CPQ system. 

Buyer-Side Product Configuration

  1. The buyer logs onto the company website or customer self-service portal.
  2. The product configurator, which is integrated into the backend, appears as an interactive display of product options and their respective pricing.
  3. The buyer uses the product configurator to customize the product based on their individual needs and preferences.
  4. The configuration engine uses real-time ERP and inventory data to ensure the business’s ability to build the product.
  5. The customer can see a real-time preview of the final item as they design it.
  6. The configurator automatically adds up the price of the parent product and add-ons, and applies any discounts.
  7. Once they build their complete product, they can add it to their cart and order as normal.

Seller-Side Product Configuration

  1. The sales rep identifies, designs, and communicates the desired specifications of the product with customers through a CPQ solution.
  2. The product configurator displays a range of item features, settings, and components that fit the customer’s requirements.
  3. The sales rep helps customers select the relevant options before they are added to the bill of materials (BOM).
  4. The configuration engine syncs with ERP and inventory data to ensure the product is both available and possible to build.
  5. The configurator automatically calculates the total cost, including parts, labor, taxes, and discounts.
  6. The product configuration data auto-populates into a quote, proposal, and/or contract.
  7. The seller reviews, adjusts, and approves the document before sending it to the customer.

5 Types of Product Configurators

A product configurator carries out the above process in six different ways: pick-to-order, configure-to-order, assemble-to-order, make-to-order, or engineer-to-order.

Production process complexity determines which type of product configurator a company will use. Here they are, in order from least to most complex:

  • Pick-to-Order (PTO): Customers pick individual product components separately, but it is their responsibility to consider how each component comes together (i.e., there isn’t a visual guide to walk them through it). Commonly used in B2C ecommerce, this is the most basic product configurator.
  • Configure-to-Order (CTO): The customer selects interrelated components with a clear visual relationship. The manufacturing instructions and list of components vary for every order, but a pool of components is kept in stock for the final product (e.g., t-shirts and other straightforward customizable products).
  • Assemble-to-Order (ATO): Products are pre-configured based on forecasted demand, but customers can customize certain components within the product. This is typically used for professionally assembled products like computers and vehicles.
  • Make-to-Order (MTO): Entirely — or almost entirely — bespoke products are designed from scratch according to the customer’s specifications. Commonly used in job shops and contract manufacturing, Industry 4.0, architectural customizations, and automated manufacturing processes.
  • Engineer-to-Order (ETO): Buyers specify multiple components that are engineered and assembled into a complex product to order, such as aerospace, industrial equipment, or medical devices.

Industries That Use Product Configurators

Many types of businesses need to configure products, including small, medium, and large manufacturing enterprises, job shops, mixed-mode manufacturers, ecommerce stores, and SaaS companies.

Product configuration is equal parts a sales function and a manufacturing process, so companies that use it typically fall into one of the following categories:

  • B2B manufacturing
  • Ecommerce (B2B or B2C)
  • Retail and consumer goods
  • Aerospace
  • Airlines, travel, and hospitality
  • Automotive
  • Telecommunications
  • Medical technology, equipment, and devices
  • Industrial goods, services, and equipment
  • Engineering and construction
  • Professional services
  • Computer software

Really, any company offering some degree of customizable options needs to streamline its business operations with a product configurator.

Key Features of Product Configurator Software

Product configurator software empowers manufacturers and software/service vendors to offer a straightforward customer experience, improve operational efficiency, and drive revenue growth through the following features:

Rules Engine

Product configuration works on a rules-based interface — customers visualize custom products based on parameters the business determines ahead of time.

That way, the seller or buyer can build and order products according to their requirements without manual intervention from sales or back-and-forth with product and deal desk teams.

To ensure the product configuration is actually possible, someone from the sales team needs to carry out the following process beforehand:

  1. Input data from the product catalog, including parts, components, and features
  2. Set configuration rules that determine which parts go into each product
  3. Configure the pricing model and add pricing information to each element of the product
  4. Add contingencies to configurable products (e.g., cost increases in certain parts or components, discounts for specific customers)
  5. Test the configurator for accuracy and compliance

Pricing Calculations

Once the product configurator knows the company’s pricing and product information, it can make real-time pricing calculations.

On the frontend, the product configurator will update pricing information in the user interface. And on the backend, it can auto-populate a quote or proposal that includes all taxes and discounts for an order.

Bill of Materials (BOM) Creation

A BOM is a list of parts and components used to assemble finished goods that includes descriptions, quantities, material numbers, unit prices, discounts, and other important data points.

This list serves as an instruction sheet for the parts to be assembled and used in production, and it’s especially helpful for MTO and ETO configurations.

It also helps manufacturers save time when they need to quickly identify which parts will go into products with multiple variation points, such as computer parts or vehicle accessories.

Once the product configurator has all the rules and pricing information, it can easily generate a BOM for any given order.

Item and Part Creation

As a part of order automation solutions, product configurators create new items and parts on demand based on customer input.

This is often used to create custom SKUs for each order, which helps sellers quickly recognize products and customers in their internal systems. This feature is especially helpful when companies have to track thousands of different configurations for a single product.

Product Visualizations

Visual product configuration makes it easy to configure complex products without getting lost in text-based specifications or business rules. And when businesses have to offer multiple options, custom visuals help customers distinguish between each option.

Some product configurator software lets customers visualize their custom products with augmented reality (AR) technologies for an even more immersive experience. Most, however, use 3D configurations to help customers visualize and customize products.

Integrated CAD Automation

CAD (computer-aided design) is used to create technical production drawings and fully-configured 3D models of products or components. It’s the basis for product design and engineering, allowing businesses to develop physical prototypes from sketches and ideas.

Modern CAD software integrates with product configurators so customers can visualize their custom designs in real-time. Buyers and sellers can view these CAD outputs directly in their web browsers.

Configure, Price, Quote (CPQ)

A product configurator is a sibling of the CPQ system, which carries out the configuration process in addition to pricing and quoting products.

This includes:

  • Quote Generation: Automatically creating a simplified quote with company branding in a variety of formats, such as PDF and Excel.
  • Proposal Templating: Creating and modifying templates so sellers can automatically create sales proposals for customers.
  • Guided Selling: Presenting product options based on past purchases, customer segments, and usage.
  • Dynamic Pricing and Discounting: Offering customers real-time discounts based on specific criteria, such as quantity or product selections, and factoring taxes and local regulations into quotes.

Product configuration is the first step in the CPQ process, so a product configurator’s features also optimize quote creation and move buyers and sellers from one step to the next.

Benefits of Using a Product Configurator

A product configurator bridges the gap between the customer experience a business provides and the one buyers actually want by facilitating an automated sales cycle.

Benefits of a product configurator include:

Faster Quote and Proposal Times

With a product configurator, sellers can create error-free professional proposals and quotes with a few clicks.

With the ability to quickly translate customer requirements into an accurate configuration, the quote process is almost instantaneous.

Since product configurator software uses a rules engine to calculate prices automatically, it already has the right information in the background, so there’s no need to look up pricing or wait for approval.

Improved Accuracy and Compliance

Product configurators reduce errors by following pre-set rules, which makes them ideal for industries with strict regulations.

Plus, they help businesses maintain accurate product data across different departments by automatically syncing changes between sales, product, and finance systems.

Faster Time to Production

When customers configure products, they’re only presented with options that are compatible and compliant. Using product configurator software, they make informed decisions more quickly, which means manufacturers can start producing right away.

For bespoke products like special medical devices and custom-ordered furniture, CAD integration turns custom configurations into production-ready drawings in minutes.

Higher Conversion Rates

Prospective customers who can see the dimensions of the product they’re buying or build it themselves are 60% more likely to continue through the checkout process. And replacing basic product photography with a 3D or augmented reality product configurator can boost conversions by as much as 40%.

Reduced Sales and Product Complexity

Visual product configurations simplify complex product designs for buyers and sellers.

For seller-free sales processes, this simplifies product selection for customers and helps them identify the best option for their needs. For sales professionals, it takes some of the difficulty out of explaining a product’s features to the customer.

Shorter Sales Cycles

When sellers and buyers can easily understand their product options, it shortens the sales cycle. Product configurator software provides guidance to customers, so they don’t have to wait for answers from sales reps or sift through long customer support forms and product catalogs when they need clarification.

Improved Customer Experience

Nearly three-quarters of B2B buyers say they expect personalized interactions with companies, and the vast majority purchase solely based on experience. But 88% only buy when they see the seller as a “trusted advisor” and 68% don’t want to interact with a sales rep at all.

The good news for B2B vendors is 77% of buyers are willing to spend more than $50,000 in a single online transaction, and product configuration software is the one platform that can accomplish this.

Product configurators improve the customer experience by providing a self-service platform, so customers can configure and order products without assistance from sales reps or customer service teams. Plus, it allows them to customize their product selection without having to call in for help.

More Accurate Sales, Revenue, and Demand Forecasting

Product configurator rules capture customer behavior and preferences, which are key factors in demand forecasting. Businesses can use this information to accurately predict sales volumes, revenue, and customer demand over time.

Demand forecasting is essential to maintaining inventory levels and optimizing production schedules, especially for companies using a pick-to-order, assemble-to-order, or configure-to-order model.

Product Configurator Software Integrations

Configure, price, quote (CPQ) — the product configurator’s parent software — acts as a “mini CRM” for managing frontline customer relationships and a de facto inventory management platform. But CPQ is only connected to sales, integration with other systems is required for complete sales and product pipeline visibility.

Enterprise Resource Planning (ERP)

ERP software manages the flow of data between different parts of a business, from finance to customer relationship management (CRM).

Integrating CPQ with an ERP system ensures product information is always up-to-date and in sync across all teams. This includes prices, discounts, taxes, regulations, inventory levels — anything that impacts a sale needs to be reflected in every department.

Customer Relationship Management (CRM)

CRM systems store and track customer data, delivering insight into customer behavior. Product configuration often integrates natively with CRM (such as with Salesforce CRM).

Integrating CPQ and CRM automates lead capture, qualification, and nurturing processes, which streamlines customer onboarding, eliminates manual data entry, and contributes to an error-free omnichannel customer experience.

Inventory/Order Management Systems

Product configurators rarely integrate natively with inventory management systems — businesses connect them via an API.

Order management integration makes it easy for customers to place and track orders, and it notifies businesses whenever new customer orders are made. Integrating CPQ with an inventory system allows businesses to automatically pull product information from a central source (such as price and stock levels), ensuring customers always have access to the most up-to-date data, even if it’s changed in the backend.

Choosing the Right Product Configurator Software

Not all product configuration software offers the same value. To pick the right software, consider the following criteria:

  • Business model (e.g., subscription, one-time purchase, usage-based pricing, etc.)
  • Company size and industry
  • Product type and complexity
  • Existing tech stack and native integrations
  • Number of sales employees
  • Budget and implementation timeline

Companies in high-tech and SaaS industries, for instance, prefer a platform like DealHub for its integrated CPQ, sales engagement, subscription management, and billing capabilities.

Enterprise manufacturers that configure complex products generally prefer a tool like PROS, because it offers advanced support for customized products, AI-powered pricing optimization, and 3D visualization.


Does a product configurator require coding?

Large companies with significant IT infrastructure sometimes choose to build their own product configurator. However, this is far more difficult and requires hundreds of thousands of dollars to code, test, deploy, and maintain companywide. In general, product configuration is more feasible through a cloud-based CPQ solution from a reputable vendor.

What is a configurator in Salesforce?

On the Salesforce platform, a product configurator is an application that allows customers to customize and select products from within the Salesforce interface. It’s commonly used for CPQ, order management, pricing optimization, and 3D visualization within Salesforce CPQ.

What is product configuration management?

Configuration management (CM) is the process of maintaining and updating a product’s design over its entire lifecycle. It involves continuously testing, analyzing, and adjusting a product’s features based on customer feedback and managing multiple versions to ensure continuous availability.

CPQ Integrations