The Debate We All Need to Hear: Should Prices in the Localization Industry Go Up or Down?
Introduction and Participant Locations
The webinar is about to start, with participants joining from various locations worldwide.
Participant Locations
- Participants are joining from diverse locations such as Holland, San Francisco, Slovenia, Germany, Monterey California, Dublin, Rio de Janeiro, Vietnam, London, Madrid, Barcelona.
Introduction to the Webinar and Volunteer Program
Isabella introduces the webinar organized by the Member Program committee and discusses volunteer opportunities for Gala members.
Volunteer Program Introduction
- The webinar is organized by the Member Program committee comprising Gala volunteers dedicated to creating engaging content.
- Isabella expresses gratitude towards volunteers like Lucrezia and Paolo for their contributions.
- A call for volunteers for the last quarter of 2022 is announced.
Panelist Introductions: Paulo and Lucrezia
Panelists Paulo and Lucrezia introduce themselves detailing their roles in the translation industry.
Panelist Introductions
- Paulo shares his journey from an administrative assistant to a managing director in the translation industry.
- Lucrezia highlights her experience in business development across different continents within the translation industry.
Introduction of Jessica Radke
Jessica Radke's extensive experience in localization sales is introduced.
Jessica Radke's Background
- Jessica has significant experience in localization sales spanning nearly three decades.
- She focuses on increasing revenue through training and consulting services for translation industry leaders globally.
New Section
In this section, the speaker discusses the need for diverse opinions on pricing models in the language service provider (LSP) industry and reflects on their own experience based in London and the US.
Opinions on Pricing Models
- The speaker expresses interest in hearing from LSPs serving other LSPs to gather a variety of perspectives on pricing models.
- : Reflecting on their Anglo-Saxon perspective due to being based in London and the US.
Industry Experience Reflection
- The speaker shares that it is their 30th year in the industry, starting back in September 1992.
- : Discusses historical pricing for translation services, highlighting rates for French translation at around 20-21 cents per word in 1992 compared to similar rates today.
New Section
This segment delves into how inflation impacts standard word rates over time and explores changes in pricing dynamics within the translation industry.
Impact of Inflation on Rates
- Discussion about how standard word rates have not kept up with inflation over the years.
- : Calculations suggest that current rates should be around 42 cents per word for French translations to align with inflation trends.
Technological Advancements and Pricing
- Acknowledgment of technological advancements affecting project management costs despite certain charges disappearing.
- : Mention of technology progression leading to changes in project costs but not necessarily impacting standard project rates significantly.
New Section
This part focuses on whether being a translator remains financially viable considering fluctuating rates influenced by factors like client preferences and market trends.
Viability of Translation Profession
- Contemplation on whether it is financially rewarding to be a translator given stagnant or decreasing pay rates.
- : Noting downward trend due to various factors including customer reluctance to pay higher prices.
Factors Influencing Rates
- Discussion expands beyond geopolitical influences, emphasizing economic aspects such as inflation's impact on pricing strategies.
- : Personal anecdote about noticing price increases during routine shopping trips reflecting broader economic shifts affecting translation industry rates.
New Section
This section explores evolving pricing structures within the translation industry, focusing on disappearing charges and their implications for translators' earnings.
Changing Pricing Structures
- Observations regarding vanishing charges like project preparation fees and glossary creation costs impacting overall compensation for translators.
Desperation in Pricing Strategies
The speaker discusses the challenges faced in pricing strategies within the translation industry, emphasizing the impact of competitive pricing and the need for value-based selling.
Challenges in Pricing Strategies
- Desperation to meet targets led to rate cuts, especially among those without business or finance backgrounds.
- Industry struggles to articulate its value beyond quality and delivery, leading to price-centric discussions with clients.
- Competitive pricing based on costs often results in downward price pressure from competitors.
Value-Based Selling
The importance of transitioning towards value-based selling in the translation industry is highlighted, focusing on understanding customer needs and delivering measurable outcomes.
Transition to Value-Based Selling
- Advocacy for adopting value-based selling to demonstrate the impact of translations on client objectives.
- Emphasis on measuring outcomes like marketing reach and translation quality from a customer's perspective.
Pricing Models and Service Inclusions
Discussion revolves around justifying rates based on comprehensive service offerings rather than itemizing tasks like pre-processing or post-processing.
Justifying Rates Based on Services
- Argues against charging separately for tasks like pre-processing or post-processing, advocating for inclusive rates.
New Section
In this section, the discussion revolves around the importance of educating buyers on translation services and the need to differentiate services based on content types.
Importance of Education and Service Differentiation
- Buyers often lack understanding about translation services, highlighting a need for education in this area.
- Translation services should be tailored based on the specific content being translated, such as life sciences documents requiring different processes compared to HR documents.
- Advocacy for separating services into distinct categories with varied pricing structures to align with the complexity of content being translated.
New Section
This segment delves into reevaluating pricing models for translation work and the challenges associated with determining appropriate rates.
Pricing Model Evaluation
- Discussion on potentially revising the current pricing model for translation work to better reflect the diverse nature of projects.
- Challenges highlighted in setting rates due to varying charging methods like per page, characters, words, or hourly rates.
- Suggestion to adopt differentiated pricing strategies based on service type, such as charging per hour or per page depending on the complexity of the task.
New Section
This part emphasizes the complexities of determining suitable rates for translation services and underscores the importance of educating clients about these intricacies.
Rate Determination Challenges
- Difficulty in reaching a consensus on appropriate rates due to diverse charging structures across different regions and service types.
- Importance of educating clients about varying processes and technologies used in different types of translation work.
- Addressing client expectations regarding pricing for commoditized translations that may impact profit margins if not managed effectively.
New Section
The conversation shifts towards defining business strategies concerning commoditized translation work and articulating value propositions to clients effectively.
Business Strategy Considerations
- Deliberation on whether to engage in commoditized translations or focus on specialized services that align with company expertise.
- Emphasis on maintaining profitability by avoiding undervaluing specialized services through inappropriate pricing models.
Discussion on Translation Industry Pricing
In this section, the conversation revolves around pricing strategies in the translation industry and how they align with the value of services provided to clients.
Importance of Pricing Alignment
- The discussion emphasizes the importance of ensuring that current prices in the translation industry reflect the true value of services for both clients and users worldwide.
Evolving Pricing Models
- Mention is made of a South American company that adjusted its pricing model from per-word rates to hourly rates to better suit certain types of projects and ensure profitability.
Challenges with Word Rates
- Word-based pricing models were found to be inadequate for certain projects like games or software translations, leading to a shift towards hourly billing for more accurate compensation.
Demonstrating Value to Clients
This part delves into strategies for showcasing value to clients in the translation industry through various metrics and demonstrations.
Presenting Value Proposition
- Emphasizes the need to regularly remind clients of the value provided by showcasing key performance indicators (KPIs), cost savings on matches, productivity improvements, and problem-solving capabilities.
Educating Clients
- Apart from demonstrating value, educating clients about the benefits received can enhance their understanding and appreciation of the services rendered.
Challenges Faced by Translation Managers
This segment explores challenges faced by translation managers regarding financial aspects and proposal writing.
Internal Client Communication
- Translation managers often struggle with conveying financial information effectively to internal clients, relying on project managers and salespersons for support in proposals and business plans.
Balancing Business Needs
Discussion on Pricing Strategies
The conversation delves into the challenges faced in the translation industry due to fluctuating pricing strategies and increasing inflation.
Industry Pricing Challenges
- Various pricing formulas from different companies are causing confusion in the market, making it challenging to determine appropriate pricing strategies.
- The discussion highlights the uncertainty surrounding industry standards for pricing, with even established practices like applying a percentage of GDP rate being questioned.
Adapting to Customer Demands
- Consideration is given to how customers, especially Language Service Providers (LSPs), may impact pricing decisions, emphasizing the complexity of catering to diverse client needs.
Business Sustainability
- The indirect nature of business transactions within the industry is identified as a potential challenge that needs addressing for long-term sustainability.
- Emphasizes the importance of conveying financial realities to clients and adjusting rates accordingly to ensure business viability.
Balancing Pricing Pressures and Value Addition
Insights are shared on navigating pricing pressures while maintaining value in translation services.
Addressing Pricing Pressure
- Acknowledgment of pricing pressure faced by smaller translators and language service providers, suggesting a need for self-driven rate adjustments.
Adding Value Proposition
- Critique on the prevalence of offering free services in the industry and advocating for adding value rather than solely focusing on price adjustments.
Client Relationship Management
- Highlighting the importance of evaluating client relationships based on profitability and making strategic decisions to maintain sustainable business practices.
Strategic Client Management
Discussion revolves around strategic client management approaches for sustainable business growth.
Client Selection Criteria
- Advocacy for letting go of unprofitable clients to maintain business integrity and focus on profitable ventures.
Managing High-Maintenance Clients
- Sharing experiences of parting ways with demanding clients to streamline operations and enhance profitability through effective client management strategies.
Financial Viability Considerations
Inflation and Translation Industry Challenges
The discussion revolves around the challenges faced in the translation industry due to inflation, disparities in living costs across different countries, and the impact on translation rates.
Inflation and Language Availability
- Inflation leads to difficulties in finding speakers of rarer languages, highlighting the need for standard payment for translators.
- Disparities in living costs between countries like Japan and the US affect translation rates, raising questions about who benefits financially.
- Countries like France with high living costs have extensive wage protection laws that may influence translation rates.
Global Trends Impacting Translation Industry
This section explores global trends affecting the translation industry, including pre-COVID investments worldwide and post-COVID opportunities for language expansion.
Pre-COVID Investments and Post-Pandemic Prospects
- Pre-COVID trends saw companies investing globally, potentially impacting language availability.
- Despite challenges in finding specific languages, it presents both a problem and an opportunity for growth.
- Post-pandemic recovery is expected to increase language demand as standards of living rise globally.
Translation Industry Dynamics
This part delves into how varying living costs worldwide influence business decisions within the translation industry.
Living Costs and Business Strategies
- High overhead costs in certain locations prompt companies to outsource roles to lower-cost regions.
- Remote work options post-COVID allow companies to leverage lower living costs in other countries for operational efficiency.
- Major Language Vendors (MLVs) establish offices in regions with lower living expenses to optimize cost structures.
Market Strategies of TransPerfect
Insights are shared regarding market strategies employed by TransPerfect and their impact on pricing dynamics within the industry.
TransPerfect Market Strategy
- TransPerfect aims to expand market share without significantly increasing prices through technology utilization.
- Technology tools like translation memories reduce costs, influencing pricing strategies within TransPerfect.
Discussion on Translation Industry Challenges
In this segment, the conversation revolves around challenges faced in the translation industry, including increased competition and pricing issues.
Linguists Facing Challenges
- Many individuals transitioning to translation due to job loss underestimate its complexity.
- Rising competition from platforms like Upwork affects pricing and industry standards.
- Clients seeking low prices may undervalue quality work, impacting translators' earnings.
Sustainability in Translation Industry
The discussion shifts towards sustainability concerns within the translation industry and the importance of fair compensation for linguists.
Sustainable Practices
- Rejecting clients who undervalue services maintains industry standards.
- Highlighting the need for fair pay to ensure a sustainable future for translators.
Impact of Pricing on Localization Industry
Delving into the impact of pricing strategies on the localization sector and considerations for adjusting rates.
Pricing Strategies
- Reflecting on delayed price adjustments despite inflation over time.
- Timing plays a crucial role in determining when to revise pricing structures.
Challenges and Opportunities in Translation Business
Exploring challenges faced by translators regarding pricing negotiations and identifying opportunities for value addition in the evolving industry landscape.
Negotiation Dynamics
- Barriers to entry contribute to price undercutting within the translation market.
Meeting Closure and Future Webinars
In this section, the speaker addresses the closure of the current meeting and provides information about future webinars.
Member Program Meeting Closure
- The speaker apologizes to Angelica Rodrick for not being able to speak due to the need to close the webinar.
Future Webinar Information
- Participants interested in writing articles on the discussed topic are encouraged to contact the speaker for scheduling interviews or articles.
- A post-webinar survey will be available after closing the webinar, taking only five seconds for feedback on the conversation and speakers' performance.
- The next webinar is scheduled for November 10th with Gagana Tuliva from One Stop Asia discussing complaint management.
- A call for proposals is open for a soapbox session allowing participants to present ideas without slides or props.