How Do I Measure Localization Impact?
One of the questions I’m asked most frequently when discussing localization, really cuts to the heart of one of the biggest misconceptions around what we do. What is the impact of Localization, and how do you prove your return on investment?
It’s a really important question to ask, a question all managers should bear in mind when assessing their teams. A question all leaders should be asking when weighing whether or not to invest in something:
— How do I measure the impact of an activity?
— How do I define success, and how do I know if it’s been worthwhile?
The reason why I’m asked this question so often is that localization isn’t a process that delivers a clearly-defined, directly measurable impact. There isn’t a single business lever or metric that localizing or “localizing better” affects. There is no single statistical Performance Indicator that tweaking your localization output will directly impact, nor is there a barometer that allows you to clearly see the impact for the business of translating/localizing your product.
For others, translating your product into a new language is regarded as a “low-hanging fruit” or an express route to growth. If I go to the market with an English-only app, my customer base is limited only to people who are comfortable working in English. Alternately, if I choose to add a language and localize my product into Danish, my reach has now been extended to people who are comfortable working in English or Danish, so logically I can infer that my company will grow in Denmark and I can monitor growth as my KPI, right? In fact, this is where the misconception lies, because the only direct impact of my activity is that my potential customer base has grown. I haven’t actually done anything to get those customers to use my product yet...
Put simply:
Localization does not mean Growth
Yes, translating your product greatly enhances your growth potential, but it’s up to the rest of your operations to take advantage of this extended reach. My beautifully localized product won’t reach any customers in Denmark, for example, if I don’t carry out any marketing in Danish. If I choose to offer my product but not my website in Danish and I don’t carry out any localized marketing… well, my customer base has been extended a little. I’m able to now reach Danish-speaking customers who are comfortable browsing the web in English, but wouldn’t be comfortable using an app on a day-to-day basis in English, which is slightly better than nothing, but it’s still not going to make a large impact to your bottom line.
This therefore makes localization a difficult beast to manage, and presents a problem for any business leader considering localization or extending the dimension of their business into markets where their primary language isn’t spoken.
If localization doesn’t automatically translate into growth, if I don’t know exactly what the potential will be in advance, if I can’t justify or monitor the business impact, and if it isn’t possible to keep a close eye on return on investment — how do I know if it’s worthwhile doing at all?
A solution requires a slight change in how the team and its impact is visualized. Instead of thinking of the localization team as having a direct impact over specific levers, the team instead has an influence over a wide range of metrics, right down to (but far beyond) the bottom line of your company. Localization amplifies or enhances the performance of the company by extending its reach into markets and areas that can’t be reached using only one language, but it doesn’t do much on its own. It is therefore necessary to monitor a whole suite of performance indicators, while at the same time acknowledging that Localization is not responsible for any one of them. Complicated, right? Let’s take a look at an example.
Thinking out Loud?
Let’s use a metaphor. Imagine Ed Sheeran standing with his acoustic guitar and playing his music. In this metaphor, your product is the song he’s singing, and your customers are the people who hear it and stop to listen. If he’s busking on the street without an amplifier, people are going to pay attention, but the reach isn’t going to go very far, basically only as far as his voice will carry. If he wants to step up and start playing in bigger venues such as a bar or a club (read: enter a new market), he can continue playing with just his acoustic guitar, but the people at the back aren’t going to hear him so well. That’s like entering a market without localization. You’re in a bigger room with a bigger capacity, but your voice isn’t any louder — you’re not reaching any extra customers.
Localization then, is like plugging a guitar into an amplifier — now that everyone at the venue can hear, more listeners are reached — the more languages you add, the bigger and better the amplifier so the bigger the venues you can play (ie the bigger your potential customer base). Before you know it, the song (your product) is still the same, but you’re on the headline stage at Glastonbury with hundreds of thousands of fans, and none of it was possible without localization.
But what was the impact of buying an amplifier? If you’ve upgraded your sound system to accommodate Wembley Stadium but you’re still busking on the High Street — the potential and capacity to play to bigger audiences is there, but you haven’t actually done anything to grow your fan base — you’re just playing very loudly (and probably expensively) to the same customers, probably much more loudly than you need to. If the venue is empty, it’s not necessarily the amplifier’s fault, it’s projecting the music as it should do, it’s just that it’s not being heard. The deficiency lies elsewhere, either people don’t like the song (your product) or they haven’t heard about you yet.
This is where marketing and other activities come in. You still need to get radio play, cultivate Spotify and Youtube channels, do chat shows, movie cameos and all the rest of it if you don’t want to be playing to an empty room. It’s fine being able to accommodate Danish-speaking customers or Ed Sheeran fans, but they still need a level of brand awareness before they start to make an impact in your bottom line.
The sound system? Simply having the amplifier doesn’t grow his fanbase, it just allowed him to play to bigger crowds. At the same time, none of it would have been possible without the amplifier — he’d be standing on stage at Glastonbury, but only the front few rows would be able to hear him. The amplifier then, enabled him to deliver on all those other activities, bring the music to more people, allowing him to perform at bigger and bigger venues and eventually build a global fanbase.
On its own, the amplifier’s impact isn’t that noteworthy, but the music, exposure, walk-on part in Game of Thrones — none of these other activities would have been able to deliver the benefit of it. Localization is thus an essential element combined with your product, marketing and other activities, which on its own doesn’t do much, but without, it’s impossible to grow to anywhere near your full potential.
There’s no shortcut: to really get the most from the pool of potential customers, you’re going to need deliver an entire suite of localized assets — webpages, marketing materials, and onboarding materials. To really make the most of the investment, everything you do in English needs to then be transferred and available in the target language. Every extra activity adds to the impact, but every asset you opt-out of restricts the performance of your business in the target market. What’s more, there’s no way of knowing exactly how much it negatively affects. The return is proportional to the scale of your commitment — the more you opt-in, the more you get back.
There is, however, one experiment to easily visualize this impact. Run two different Google ads (or any other campaign) for the same length of time — one only in English, and the second, an identical campaign with Danish added (or whichever target language). Now you can measure the impact difference in the overall click-through rate and visitor numbers, and you can see the added visitors from the second market or country. The exact impact of localization will be immediately visible as a number, a boost in your reach and we’re no longer dealing with “potential customers.” The translation of the campaign has amplified its message and reach in a quantifiable way.
Let’s go back to the original question, then. How do I incorporate Localization into my business, and how do I measure its impact?
Start by visualizing the customer’s journey from start to finish. Go beyond just your product and consider how a customer discovers that you exist, right through to the very end when their money arrives in your account. Then at every step, consider how you can reach customers who have a different first language, or live in a target market where they speak that language. It becomes slightly more work, but the growth potential makes it worthwhile, and by following the principles I laid out in my previous article on scalability, the added workload isn’t actually so high.
Organizationally, from my experience, the best-performing and most impactful Localization Teams either work directly with every part of the business (in a similar way to your Design Team for example), or in close collaboration with some kind of International Operations team. In a way, your translators are like a high-caffeine energy drink or espresso for your revenue — you’ll be able to perform without it, and localizing will definitely have an impact (even if you can’t pinpoint precisely how much or where), but simply drinking an espresso and waiting for something to happen isn’t going to achieve any results directly.
At a risk of laboring the point: Imagine your product as the lead singer/songwriter in your band — this is what the fans come to see. Your Marketing team is the lead guitarist, turning the amp up to 11 and busting out the explosive solos and catchy riffs that draw the listeners back and distinguish it from everyone else. The Localization Team are like the bass guitarist. You can’t measure how much better the final product is with them, but you’ll have an inferior song without them and you’ll definitely notice that they’re not there. With an Internationalization team as drummer, completing the rhythm section, you’ve removed all the limitations to growth and opened up the path to global success.
To measure the impact? Take all of the levers and metrics you would examine for the overall health of the business, apply them to the single market and compare before and after. In theory, as your potential customer reach has expanded, localization will provide a small boost to each activity you would normally perform. But remember, the responsibility ultimately lies with whichever team is performing the activity. That amplifier gave you the extra listeners, but you still need to play the song through it for anyone to be able to hear it.
