Whether you’re brand new or looking to grow your existing business, the way to thrive in the language services industry is to have a solid answer to this question: Who is your ideal customer?

And to answer that question, you need to investigate and answer a bunch of other questions that fit underneath it, such as:

• Should you target businesses in your own country or elsewhere?

• Should you specialize in specific languages or types of documents?

• Is it better to subcontract for other companies or find direct customers?

Being able to answer these types of questions will help you solidly position yourself in the market, find new growth possibilities, and make strategic decisions around where to search for new customers, how to write stronger sales language, and how to improve your pricing structure.

It starts with developing an ideal customer profile (ICP) — which includes an in-depth analysis of both your market and your customer — and we’ll show you how in this article.

There are three standard customers for language services:

1. A larger language service provider (LSP) that hire subcontractors. If you are selling translation services to a larger LSP, they act as the middlemen between you and the end customer. In some cases, you won’t be able to list the end customers as your customers. For instance, if Apple wants to translate their technical instructions into the Polish language, they will hire a large multi-language LSP in the U.S. or Western Europe which, in turn, hires you. The larger translation agency will likely to have a larger piece of the profit.

   Obviously, it’s always better to work with the end customer directly. It ensures higher profit margins, and you can openly claim to have worked with the customer. This allows you to write case studies with this client and target similar companies in the industry that recognize the brand.

   But not every LSP has direct access to larger clients. In these cases, providing services for a larger LSP can still be a viable way to generate revenue, as well as build your brand and customer base.

2. Direct customers based in your country. Some of your best customers will be local companies that export products and services globally. These are the companies that have headquarters in your country but sell all over the world.

   Since there is a finite number of local businesses that export products and services outside of your country, it’s easier to create a list of companies that would be good potential customers for you. You will still have to see whether the industry that they operate in fits your expertise. For example, if a number of these companies are biotech, translating technical content for that field might require a certain expertise.

3. Direct customers looking for translation services in your local language but based outside of your country. The third pool of potential customers comes from international companies outside of your country that need to localize their products or services. It can be difficult to find companies that are planning expansions in your country. One of the best ways to start is to find local offices of the global companies and reach out to them.

The different types of customers drive the type of services that you offer, such as multi-lingual or single-language. If the direct customers are based in your country, then you can offer services in multiple languages. If the direct customers are located outside of your country and looking for a local language, then you will principally offer your local language as a service.

When you’re looking for direct customers, if they’re not headquartered in your country, then it makes it more difficult to market to them. Ideally, the decision-maker would be located in your country.

Even if a company is locally-based, their decision-makers may not be. This is one of the problems you may encounter when marketing your services, and something to keep in mind when figuring out who your ideal customers are. Not only do you need to target the right companies — you need to target the internal person who makes decisions around translation services. The sooner you can start talking to that person, the more effective you will be in selling your services.

The first place to look is at your current customers. Figure out the top 20% of your customers based on how much revenue they bring in. You can do this analysis whether you’re working with your clients directly or as a subcontractor for other LSPs.

Are your current customers similar in size, industry, or location? If so, you may want to target similar companies. One advantage of targeting a company in the same industry is the fact that you can show examples of work that are highly relevant to them.

Companies in the same industry know each other, so when your prospect can recognize the brand of your current customer it goes a long way to build trust.

This can also be the case for subcontractors. If you’re looking for work from a new LSP, and you have experience within the same industry that the LSP is servicing, your background will be valuable to them.

When I owned my own LSP, one of my clients was a well-known construction and farm equipment manufacturer. I was working with a single-language vendor in Italy for all of my Italian translations, and this vendor also worked with other LSPs who serviced similar companies. They could use their work with brand names when talking to LSPs that work with farm and construction companies.

Developing niches, such as working with specific industries, can decrease your sales cycle because companies can relate not only to the other companies you work within the same industry but also to the type of content that you translate.

Keeping track of various data points (or KPIs) around your work can help you figure out who your best clients are. For instance, track project management productivity and your gross margins per project.

You may be surprised by the results. For instance, some of your largest customers might not necessarily have the best numbers.

When I ran my own LSP, I dropped clients when their project management process was difficult to deal with. At times, my project managers could spend hours and hours managing $300 to $500 jobs for larger clients, when we had other four- to five-figure projects that ran much smoother.

As you investigate this data — such as time per project — you will figure out other things about your ideal customers. For instance, perhaps the clients whose projects run the smoothest use similar project management strategies or similar technology. If you have customers that have content management systems you can hook directly into (thus limiting the need for human interaction), this can greatly improve your productivity and your margins.

Just because this is where you’re starting doesn’t mean this is where you want to be. Perhaps you’re primarily finding work with small businesses or individuals, but you’re interested in larger projects. Or your customers don’t have much in common because you’re just starting out and taking any job you can find.

If your current customers are not your ideal customers, then profiling who you’d like to be doing business with can help you get there.

If you’re new to the language service industry or looking to expand into new markets, then this research is essential.

Is there a strong demand from local companies for translation services? If so, what languages are in demand?

Example: An individual translator or small translation business based in Eritrea

Not a large local demand — most large companies and institutions in Eritrea use translation companies based outside of the country. Because of this, it would be easier for an Eritrean vendor to find consistent work as a subcontractor for one of these established LSPs that are headquartered outside of the country.

There may a demand for local translation services from smaller customers, such as law firms, banks, university students, or individuals needing personal documents like birth certificates translated. While there may be enough work to sustain a small business, there probably isn’t large enough demand to sustain a very rapid growth. The local demand for services should set a vendor’s expectations around profit and possibilities for growth.

Changes in global economics impact the translation industry. For instance, when a new country joins the European Union, that creates a gigantic new translation market.

New technology also constantly changes the industry, especially around customer expectations. It can also open up new markets.

For instance, machine translation is in huge demand right now and is changing the industry. More companies are looking for post-editing of machine translation (PEMT). Is that a service you’d like to offer?

• As you gain access to new resources. And then, refine it again whenever you’re making large changes in your business, such as investing in new technology. Or when new opportunities arise. For instance, you may discover new market demands or hire a new salesperson with experience and relationships in a new customer market.

  When you hire a new salesperson that has experience working with a different industry, it’s time to evaluate that new market. Are customers in that industry more appealing than the customers you have now? Are they worth targeting?

  The same goes for new quality vendors. I once worked with a vendor whose English-to-Spanish translations were impeccable. Because of the high caliber of his work, I was more inclined to look for customers looking for that language pair.

• As you acquire new customers. Using the metrics we discussed above, you can continue to refine your ideal customer profile as you acquire new customers. Each new customer can teach you which industry you prefer working with, which project management process and technology increase your margins, etc.

As you work with different types of customers and different industries, you may need to create multiple customer profiles. You’ll face the decision of whether to pursue different types of customers simultaneously or target your efforts around one. This becomes a question of resources.

The truth is that many newer or smaller LSPs don’t have the option to target their ideal customers. Due to the long lead time for sales in the language service industry, companies are forced to take whatever works for them.

However, as your business grows, you’ll be able to be pickier about who you choose to work with and market to. There comes a point when it’s better to say no to clients who aren’t an ideal fit because they take away the time and the resources to finding better clients.

By knowing the demand in your country, building strong relationships and references within a specific industry, you’ll be able to grow your company to the point where you can choose who your ideal clients are, and who you want to work with.