Background knowledge

Costs vs. profitability: When does a configurator pay off?

Author: Claudia Riener

The profitability of an upcoming project is certainly one of the first topics to come up and be examined. Experience has shown that we at Combeenation are also confronted with this topic right at the beginning of our customer meetings, and our prospective customers would like to know in advance: "Does the configurator even pay off for me?" In this blog article, we would like to answer this question as best as we can and, first and foremost, help you make a decision.
 

What is profitability and how to calculate it?

A brief definition of the term "profitability": A project is considered successful if the benefit is higher than the costs incurred. For this purpose, various methods can be used, such as the profitability index, the cost-benefit analysis or the calculation of the ROI - Return on Investment. These methods are very useful as a basis for decision-making and are also justified, but on closer inspection they are not so easy to implement, as there is often a lack of empirical values, especially for product configurators.
 

When does my configurator pay off?

Who hasn't experienced this: "Please go ahead and find out if this is even worthwhile and makes sense." However, without the right key figures - and getting them is sometimes a challenge - these analyses are for the most part meaningless. That's why it's important to us to give you a few points to help you answer "How does the configurator pay off?" and "When does the configurator pay off?" as best you can, without having to make extensive calculations.

Costs vs. profitability: When does a configurator pay off?
Costs vs. profitability: When does a configurator pay off?

Brief illustration: 
Without enough website traffic on your homepage, the conversion rate cannot increase. The completion rate is an important metric in online marketing that indicates how many visitors to a website or online store perform a desired action, such as making a purchase, filling out a contact form, or signing up for a newsletter. It is the same with the checkout process. The checkout process begins when the customer has filled their shopping cart with the desired products and is ready to complete the purchase. If this process is not satisfactory for customers and they do not complete the purchase, many website visitors and a high completion rate are of little use. And customer loyalty is more important than ever in the fast-moving digital world and can be significantly influenced by an optimal sales process.

You may now be asking yourself, "What does all this have to do with a configurator?"

A lot - because a configurator can have a significant influence on customers' brand and purchasing decisions. Based on the experience of our customers, we can say that more visitors stay longer on websites that use a configurator in the online sales process. Potential customers are more likely to choose a brand that gives them the opportunity to understand the product and adapt it to their own wishes and needs already in the research phase.


Conclusion: Does my configurator pay off?

As you can see, it is difficult to evaluate the profitability of a configurator project solely with key figures; rather, there are several factors that have a favorable influence on the project, others less so. The fact is, online sales is not the sales channel of tomorrow, but of today. Already 89% of customers start the buying process with an online search engine. So, if you can agree with one or more of the above points and/or what you have read is comprehensible to you, feel free to send us your inquiry.

In an initial get-to-know-you meeting, we specifically address your requirements and your product in order to show you possibilities and find initial approaches to solutions.


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