Localization as a profit center: how to prove the ROI and secure budgets

The question of cost and resources is a constant concern in most companies. The idea of spending big dollars on translation and localization can raise a few eyebrows among members of the management board. However, without localization, companies are unlikely to succeed in global markets.

But how can localization teams and professionals in the translation industry communicate the immense benefits of localization? The answer is to provide indisputable data showing a return on investment. Robust, compelling data will help you convince stakeholders that localization is a priority and secure the budgets you need to continue growing

Advocate! Slowly build up your reputation.
Use data to advocate for the importance of localization in a company.

Changing the perspective on localization: from cost to profit center

Many companies now realize that to reach audiences, spur engagement, and retain clients, they need to adopt a user-centric approach. This means researching and understanding their key problems, needs, and desires. Localization is key in this, as it zeroes in on user groups in different target markets and helps companies position themselves to tap into these user attributes. It’s all about meeting audiences where they are.

Data from tracking tools already in place

Localization directly affects all departments within a company, be it marketing, software development, sales, or anywhere where the end user is involved. This means that meaningful data can be extracted from your existing tracking tools and used to support the value of translating and localizing content. Once you start focusing on geo-specific data, you can quickly identify upward trends that can go towards proving the ROI of localization.

Data as a means for ongoing optimization

The power of data can be unlocked when you analyze it and find actionable insights. When applied to localization, this data analysis can serve to help change its perception as a purely task-based activity and instead be recognized as a key business driver. Localization managers can further tweak and improve their strategies by analyzing data across departments to become more effective.

Start gathering data if you don't have any!
You need to start gathering localization data today! 

Types of data you can use as proof of ROI in localization

Most organizations already have tracking tools they actively use. Localization teams can get their hands on this data and concentrate on certain regions and demographics to show the fruits of their efforts.

Marketing data per geolocation

  • MQLs (Marketing Qualified Leads)
  • Website traffic
  • User growth
  • Impressions and engagement on social media
  • Referrals and mentions
  • Registrations and subscriptions
  • User retention
  • Brand sentiment

Sales data per geolocation

  • Number of deals closed
  • Sales, revenue, and profit
  • Orders

Customer satisfaction levels per geolocation

  • Positive reviews and ratings
  • Feedback in help centers

Translation platforms

  • Word counts and costs
  • Savings by using machine translation and post-editing
  • Savings when using built-in features, like language quality assessment, translation memories, and glossaries
  • Translation output speed, i.e. the number of projects completed
  • Quality metrics, such as Language Quality Assessment (LQA)

For each of these areas, there is meaningful data that speaks to the value of translation and localization. What’s more, if you compare these data points against each other, it can be a turning point when reporting to upper management. For example, when showcasing local sales against translation costs, there’s a good chance you’ll see that what is gained greatly outweighs what has been spent.

By analyzing this data, you’ll ensure your localization efforts are going in the right direction and drive further growth.

A/B Testing: Trying out hypotheses and showing the results

There are many ways to figure out if your products should be localized. A/B testing is an effective method to see if localization will work. It allows you to test a hypothesis in certain regions or on certain aspects of your business before launching the localization or translation project entirely.

With data from A/B testing, you can also ensure you’re using budgets effectively.

Case study: Meta (Facebook)

During the LocTalk conference in October, we watched a compelling presentation on "Localization as a Profit Center" by Professor Max Troyer, Associate Professor and Program Chair of the Translation and Localization Management program at the Middlebury Institute of International Studies at Monterey.

He talked about how in 2015, Facebook (now Meta) asked its data science team to extrapolate Facebook’s growth data from 2004 to 2015. They noticed a huge increase in users in 2008 – the moment they started translating the social media platform into many languages. It had only been in English until that point. The data spoke for itself – there was a clear correlation between the growth from 300M to 500M users and their translation efforts.

Speak the stakeholders’ language: data

Your first step with data should be to use a translation platform that can give you all the key insights and report about your localization operations. Smartcat’s Language Delivery Platform includes real-time reporting capabilities and helps you manage teams and individuals with a transparent overview of the costs. Plus, everything is centrally accessible, so it's easy to download and present data that shows how localization makes a big difference to your business.

Head to our Enterprise Starter Page to find out more about localization and ROI.


Loie Favre
Loie Favre Loie is the Head of Content at Smartcat. With a strong background in localization, she aims to help companies fulfill their multilingual potential. In her free time, she cycles in Berlin.