Our Analysts' Insights

What return on investment should you expect from engaging with customers in their own language?  Ever since our first report in 2002 on the benefits of localizing the user experience, CSA Research has found that demonstrating the ROI for localization is a challenging exercise. Localization managers spend an inordinate amount of their time working with colleagues in other departments to make the business case for international and domestic multicultural marketing, sales, and support activities. It’s an uphill climb for most. 

Why? Two facts stand out from our research over the last 15 years: 1) Most companies don’t formally measure ROI – we’ve verified this reality in countless interviews and surveys; and 2) when they do review the impact of localization on marketing and sales, most evidence is circumstantial – they cite numbers like page views, up-sells, and completed transactions for which, unfortunately, other business groups also claim credit. 

On the flip side, we find that when they do formally measure ROI, they discover that an investment in localization can generate revenue that’s dozens or hundreds of times more than they expended. Other research shows a marked tendency to buy what they understand, and to ignore the products and services that they don’t.

With such a healthy cost-benefit ratio for localization, you have to wonder why it doesn’t get more respect and resources. The simple reason is that most companies tend to their home markets first. Their customer experience (CX) teams dote on domestic mainstream-market activities where they spend strategically to capture share. But our research shows a much lower financial and strategic commitment to customer engagement in international and domestic multicultural markets. They rarely commit adequate resources to building out localized variants of their ambitious home-market omni-channel customer experience.

How can you break this impasse that favors domestic investment over international? Show them the money. For our recent analysis of the ROI of customer engagement, we translated the typical business case for localization into the language of the budget masters. We charted the progress of prospects through three phases of the buying cycle on their way to becoming customers. This framework provides a familiar lens through which corporate executives can understand and appreciate the value of an investment in establishing customer awareness, increasing consideration, and enabling the purchase. 

An important part of making this localization business case is measurement and data. Through each phase of the buying process, we advise companies to identify, monitor, and assess the value of content and application assets that propel their domestic prospects forward to a sale. Those proven resources represent a starting point for an international strategy. 

Complementing this analysis of what works in other markets is data that proves the financial impact of localization. We drew on our studies of 3,002 consumers and 400 business buyers in 10 non-Anglophone countries to demonstrate how the failure to properly localize for the consideration phase decreases the total addressable market (TAM) of a target audience from 100% down to just 15 to 30% of the opportunity. If a company neglects to properly adapt the purchasing phase of its buying cycle, it can easily eliminate a substantial percentage of whoever’s left. And once they’ve become customers, both consumers and business buyers prefer post-sales customer care in their own language (figure).

This business-centric approach to proving the business value of localization begins and ends with data – data to show what works in your successful markets, and more data to demonstrate the impact of inadequately investing in the global markets that matter to your company. Translate your arguments into a data-centric discussion of how localization keeps prospects in your target markets engaged with your company. That’s something your executives will understand.