Calculating Website Translation ROI

I was asked to post re ROI for translating website, in the interest of time, I gathered the information from here and there and came up with this article, I hope it’s helpful for those who are debating the ROI on translation…

Long gone the days where the famous saying “if you don’t speak my language you can’t buy my product” we live in a world where every company/business is chasing every small piece of revenue in local, urban and remote global markets. Why? Because business are driven for growth, you don’t grow you get deleted by the competition. And as a direct results of local markets shrinkage or buying behavior no longer support the current product or service, business and individuals turned this planet into a small trading village with multitude of clients speaking multitude of languages. The decision is not “if” “when” you decide to translate your website, marketing material, user manuals, online help etc… You need to take this step seriously and with focused detailed planning, the ramification of undertaking this project with least resources available would deliver the reverse of the intended results (negative feelings among consumers vs positive). So if you’re not ready to allocate resources to translate your site, you probably shouldn’t make globalization a goal to begin with. It could even be argued that if you’re not invested in the completion and maintenance of your website, why even have one?

ROI Calculation
The first thing you need is a baseline which sets the standard by which your options can be measured against. Without a baseline, ROI is meaningless. Don’t get complicated, a simple measurement within a given time period will suffice.

For example, you could choose:

revenue – what will be the projected revenue for the coming year if we do not translate our site?
new membership – what will be the expected number of new members without translation?
you get the picture, anything that you want to use as one of the deciding factors based on your site/products/services.

Once you have your baseline you can apply your translation expectations to it.

The question you are trying to answer, without the fancy corp speak, is ‘am I going to make money, and how long and how much will it take’?

The following formula is a simplistic method for trying to answer this question. You will notice that a few of the required numbers are pretty subjective. That’s okay. The point of this is to just help with decision making.

Now, the formula:

ROI = (E * M) + (L * M) – T/ T

Your variables:

E = Projected net revenue for the coming year per language.
M = Number of markets you are translating into. This assumes each market is equal. To be more precise simply add each individual ‘E’.
L = Leverage and reuse savings you realize from content reuse. Very hard to calculate but a good starting point is the TM savings from your word count analysis. Take the total cost without repetition and fuzzy, subtract the reps and fuzzy matches, and you get the reuse savings. We can sample calculate this at about 10% of the total cost of translation.
T = Total costs of translation and localization including:
The project management necessary to plan, prep, launch, and monitor the site translation throughout the given year.
The cost of translation (TEP) if you already know it.
The cost of engineering for your site, graphics, data, reprogramming, traffic SEO.
The cost of quality testing.
The cost of launching the site in the target languages, including initial marketing, etc.
The cost of supporting the site for the initial year.

And don’t forget opportunity cost of projects that have to be put on side while this is completed. This one is a little harder to calculate and understandable if you leave it out, but should be considered.

Simple Example Translation ROI
Let’s start with the baseline. For this example, let’s say revenue is $100,000 for our untranslated site. We estimate the following values:

E = A modest $25,000.
M = 4; French, Italian, German, and Spanish
L = A conservative $5,000
T = Total cost for the year is say an overestimated $75,000. (really, think about the true costs, maybe $10,000?)

ROI = (25k *4) + ($5k * 4) – $75K/$75K

Did I do my math right? 60%! are you kidding me? Show me another fairly simple process where you can get more than 20%, let alone 60%. That is for year one, after that your development costs fall off and your ROI should skyrocket.

I think the ROI on translating a website is pretty obvious. I encourage businesses that are doing business abroad or currently contemplating expanding into other markets to give this idea a serious consideration