Mirela
The language services market is large and growing, so translation is a serious line item to optimize. Translation and localization helps you enable revenue and engagement. It rarely causes revenue by itself, but it’s essential for international growth. This guide shows you how to measure the return on that investment (translation ROI) and some additional useful metrics to track.
ROI formula for translation
The widely-used formula looks like this:
ROI = (Net profit / Translation costs) x 100
Net profit is the total revenue generated from the translated content, minus all expenses. Translation costs means the total cost of the localization project.
It’s important to capture all relevant costs, not just the obvious per-word translation fee. Look at the direct translation costs, such as linguist fees, vendor invoices, per-word charges, and so on. Technology and tools such as translation memory systems, machine translation engines, workflow platforms, CAT tools, licensing fees, among others should also be taken into account. Internal resource costs like project management, content preparation, review by subject-matter experts, internal QA, coordination overhead may be added too. Other costs may include maintenance and update costs or opportunity/time costs (such as delays in localization).
Financial ROI metrics
Financial metrics quantify the direct financial return of translation investments. You get to see whether the money spent on translation leads to measurable business gains.
Revenue growth by locale
This metric tracks the percentage increase in revenue in markets where localized content has been introduced. It allows you to compare the revenue generated in that specific region during a new period to its revenue during a previous, equal-length period.
Formula: [(Current period revenue for locale – previous period revenue for locale) / Previous period revenue for locale] x 100%
Cost avoidance (via translation memory)
This metric calculates how much money is saved through translation memory (TM) reuse or automation tools.
Formula: Reused words × Cost per word
Profit from translation
This is an easy one: You’ll learn the net gain after subtracting translation costs from total financial gains.
Formula: Profit = Financial gains − Translation costs
Business impact metrics
Now let’s see how translation affects user behavior and market performance. The following metrics often reflect revenue growth and brand reach.
Conversion rate lift
This metric evaluates improvement in conversion rates after adding localized content.
Formula: Lift % = [(Post-localization – Pre-localization) / Pre-localization] x 100
Customer retention increase
This metric measures how localization helps retain existing customers.
Formula: Retention Change % = [(Post-localization – Pre-localization) / Pre-localization] x 100
Average revenue per localized user (ARPU)
With this metric, you can determine the average revenue generated by users engaging with localized content.
Formula: ARPU = Total revenue in locale / Active localized users
Market penetration
Here is how you can asses how many new users or customers are acquired in localized markets compared to non-localized ones.
Formula: New localized users = Total new users – Non-localized users
Operational efficiency metrics
If you want to measure the efficiency and productivity of the translation process, here are a few metrics you should track. These will help you identify areas for cost reduction or workflow improvement.
Cost per word
This is the average cost of translating a single word minus a key metric for budgeting.
Formula: Cost per word = Total translation cost – Total words translated
Turnaround time (TAT)
This metric tracks how quickly translations are completed from request to delivery.
Formula: TAT = Delivery date – Submission date
Translation memory (TM) leverage
By calculating this metric, you can see how much of the content was reused from previous translations, which is a way of reducing costs and turnaround.
Formula: TM leverage % = (Reused words / Total words) x 100
Translation quality score (LQA)
This is a way of evaluating translation accuracy using quality assessment frameworks such as MQM or TAUS DQF.
Formula: Quality score = (Total points – Errors) / Total points) x 100
Customer experience metrics
If you want to see the impact of translation on user satisfaction, engagement, and support efficiency, here are the metrics you should examine.
Customer Satisfaction (CSAT)
This is a way of seeing the percentage of customers satisfied with localized experiences.
Formula: CSAT = (Satisfied response / Total response) x 100
Net promoter score (NPS)
This metric measures customer loyalty and likelihood to recommend.
Formula: NPS = %Promoters – %Detractors
Localized engagement rate
This metric reflects how actively users interact with localized content (clicks, shares, etc.).
Formula: Engagement rate = (Localized interactions – Localized impressions) x 100
A few other things you need to know about ROI
Translation investments have a compounding effect. Your TM grows, and this increases cost avoidance. Your content teams learn to write more reuse-friendly text. Localized SEO and brand awareness increase with each release. In short, the ROI curve gets steeper the longer you localize strategically. That’s why it’s better to evaluate translation ROI over quarters or years, not single projects.
ROI is also a decision-making tool, not just a metric. It helps you identify which markets or languages yield the highest returns. Consequently, you can focus your translation budgets where the impact is greatest. ROI analysis should help you spend smarter, not just measure smarter.
But you need to know that ROI benchmarks vary widely. If you’re working in e-commerce, conversion lift and cart value might be most important. For software or SaaS companies, ROI may be seen in the user retention and activation metrics. So you need to establish the outcomes matter most to your business goals.
To conclude
Every translated page, product description, or support article is an investment in making your brand more accessible… and competitive! When you track metrics like conversion lift, cost avoidance, or customer satisfaction, you start to see the bigger picture: translation is a growth engine. Translation ROI tells you what’s working, what’s worth improving, and where your next opportunity lies. Measure it as best as possible, and you’ll see how much you can improve your global strategy.