How to measure your localization ROI

localization ROI

Have you ever wondered if your investment in reaching new markets through localization is truly paying off? Going global can be exciting, but it’s also important to understand the financial return. Learn what data to track, how to calculate your localization ROI, and how to maximize the value you get from your work.

How to calculate localization ROI

ROI stands for Return On Investment, which simply means how much value you get back from the money you spend on localization efforts.

When you translate your website, app, or marketing materials into a new language, you invest money. This investment includes translation costs, technology fees, and maybe even vendor fees. In return, localization attracts new customers, increases sales, or saves you money in other ways (like reducing support tickets).

ROI helps you see if this investment pays off. To calculate this metric, you need to use the following formula: ROI = (Net Benefit – Localization Costs) / Localization Costs * 100

The higher the percentage, the better the ROI. However, you need to remember that ROI isn’t just about cold, hard cash. Localization can also improve customer experience and brand image, which are harder to measure directly but still contribute to your success.

Considerations when measuring localization ROI

It’s important to begin by clearly defining your localization goals. These might include increasing market share in specific regions, improving customer satisfaction, or boosting revenue. Identify key performance indicators (KPIs) that align with these goals, such as sales growth, website traffic, customer engagement metrics, or product adoption rates.

You need to make a list with all costs associated with localization, including translation services, software tools, project management, and any other relevant expenses. Be sure to include both direct costs (e.g., translation fees) and indirect costs (e.g., employee time spent on localization).

Monitor revenue generated from localized markets and track relevant performance metrics over time. This could include sales revenue from localized products or services, website traffic from targeted regions, customer feedback, or conversion rates. In addition, consider qualitative or intangible benefits of localization, such as improved brand reputation and increased customer loyalty.

Tips for maximizing localization ROI

Here are a few things you can do to make informed decisions about your localization efforts and maximize your ROI:

  • Conduct market research to identify markets with the highest demand for your product or service and prioritize languages spoken in these regions to get the most bang for your buck.
  • Plan for internationalization, as this saves rework and improves efficiency later.
  • Identify the most critical content (website landing pages, product descriptions) to localize first.
  • Consider machine translation (MT) for localizing basic content or get a first draft for human editors to refine.
  • Optimize for international SEO to improve your website’s visibility in local search results.
  • Utilize translation management systems (TMS) like POEditor to streamline workflows, manage translation memory (reusing previously translated content), and collaborate with translators efficiently.
  • Focus on quality to ensure a positive user experience for your target audience.
  • Continuously track your KPIs to see what’s working and what’s not.

… an investment worth measuring

Now that you what metrics to measure and how to maximize your ROI, you need to keep in mind that localization is not just about immediate sales figures. The positive impact on customer satisfaction and brand perception contributes significantly to your overall success too. So, start measuring, analyze, and adapt!

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