How to Measure Translation ROI
Whether you are a first-time translation user, or a localization manager in a mature translation management environment, the biggest question in your mind is how to prove translation ROI. Is there a standard, or calculator? Does it vary by industry? Who has the knowledge and expertise to generate this type of report? How do you know the translation investment is successful?
Almost everyone agrees that translation investment is necessary in today's global economy. Translating your content opens up a whole new market, either you are running a local business or in the field of international trade. The localized content works as an enabler and multiplier for your business. Companies that invest in translation are 1.5 times more likely to experience an increase in total revenue according to a survey of Fortune 500 companies by Common Sense Advisory in 2011.
We can easily count the benefits of locally-curated content in these categories:
It attracts more traffics from non-English speaking users. People are more likely to buy a product when information is presented in his/her native language.
It helps building a memorable global brand that echos with your core value. Nothing conveys your value than a carefully curated message in your users' native language.
It helps building a consistent global brand - keep the driver's seat, don't let the local new hire in the sales department decide what you say to a customer.
It supports your customers when they need you, guaranteeing long-term business. And the cost of having an online support in multilingual format is much lower than a call center!
It unites your people, both internal employees and external partners. Localization is a sure way to make your oversee employees feel they belong to a family.
The benefits are clear in your mind, but your CFO needs numbers. How to get it? We suggest a few simple steps.
Step 1: Design your localization plan around ROI
You have 100 things in mind for translation, starting from website, sales battle cards, manuals, customer support, to internal communications and employee handbooks. Where to start? How much budget to allocate for each category?
At Lotus we often divide common translatable content to 3 categories:
Must-haves: these are tightly tied with your sales goals, such as e-commerce website, marketing collateral, sales-enabling content. In addition, they are easier to prove ROI, so can boost internal morale to ensure continuous effort into the future.
Nice-to-haves: secondary content include manuals, customer support, etc. Having those help your company secure long term success, but timing-wise they can happen after your sales team land the business.
Save-for-later: unless you have an immediate need (say opening a new office in a foreign country or for regulation purposes), internal communications can wait until you have the budget.
Step 2: Collecting the numbers
First and foremost, what is your real cost of translation?
Translation KPIs include more than the number on your invoice:
Your localization service provider's quote can be extremely confusing, with a dozen categories. A simple way is to divide the total quote by the word count. This is the easiest way to compare apple to apple.
Cost of correcting poor translation. Are you paying a secondary vendor to fix the first vendor's mistakes? How about the administrative overhead, the hours you and your team spent on communication and trouble-shooting?
Lastly, did you involve internal reviewers? How much time did they spend on this project, when they could have spent those time on their core business?
Having those data ready, it's now time to tackle down the "profit" numbers. The bad news is that there's no ready-to-use workflow. All organizations are different when it comes to tracking down numbers. You do have a few clues:
Go to your website team to see the difference of traffic (by language and by country) before and after translation.
Go to your sales team to ask for new customer conversion rate after localized content is provided.
Go to your Support team to ask for customer satisfaction rate changes.
Go to HR to ask for employee satisfaction survey results.
Step 3: Define success
Let's face it. This is the hard part. Who's your audience? If you are reporting to the sales leader, the most important criteria is customer conversion rate and revenue changes. That said, markets may have a delayed reaction to your localization effort, your brand's influence cannot be built within one day and by one team. Knowing your audience and your company's near-term/long-term goal will help you define your own success.
Step 5: Focus on improvement opportunity
The best thing from this exercise is not your big presentation to your CFO, but arguably what the number tells you to do next. You'll know where to invest next to generate the best ROI. You'll also know if you are working with an incompetent (or too expensive) vendor. Now that you have your own formula, evaluating current or future localization partners is no longer a big headache.
Lotus Translation has been helping companies of all sizes and stages design and measure their localization ROI. Even if you are only starting on the localization journey, you'd appreciate someone who always keep ROI in mind for you. Tell us your story, your goal, we'll help define your success.