Translation underpins successful business globalization. While technology, business practices, regulatory compliance, and marketing issues support the international or domestic multicultural outreach of any organization, words always convey information about what an organization does, sells, or offers. And, according to new research by Common Sense Advisory, these words are getting cheaper. The net result of global supply, advances in technology, economic troubles, and more aggressive buyers has conspired to drive down the prices of most major and up-and-coming language pairs since the firm last collected data on pricing in late 2007.
Common Sense Advisory based these findings on a detailed global survey of 651 language service providers (translation firms) and freelancers in 75 countries about their pricing structures, processes, and customer bases. The firm’s report, entitled, “Translation and Localization Pricing,” includes pricing data in average prices for 156 language pairs. Further, it includes the major 10 languages with the greatest global economic impact (French, Spanish, Chinese, et. al), as well as 23 “next-wave languages” used in rapidly developing markets or in countries that are important to the global supply chain (for example, Arabic and languages of India).
How services are priced:
Most respondents (72.5%) base their pricing on the source content that they receive versus just 13% who charge by the words that they generate. The balance of respondents said other factors contributed to the structure including the client and complexity of the job. Invoices may include extra-cost fees including: terminology research, project management, testing, quality control checks, preparation of final materials, and more.
Adds report lead analyst and Chief Research Officer Don DePalma, “Whether you’re buying translation or comparing your prices with those of a competitor, you should ask for the fully loaded cost. This will vary by geography. For example, European LSPs and smaller firms elsewhere tend to bundle services in their pricing, while larger American companies are more likely to break them out in their proposals.”
Key survey findings include:
· Demand is up, but price is down. While demand for language services has continued to grow (at a rate of over 13% per year), for the most part the price of translation and localization services has dropped. Few language pairs were spared substantial price decreases since 2007 – only French and German emerged as relatively safe havens for pricing stability. Among the world’s top 10 languages, English into Russian showed the most price compression over that period.
· Automation benefits buyers. Businesses can obtain substantial cost savings by working with translation providers that partially automate the translation process. The research found that most providers discount the per word price by as much as 48% when using translation memory to process previously translated text. Machine translation with human post-editing generates even larger savings.
· Less than half give discounts. Price anxiety remains a big concern among suppliers. Forty-two percent of the respondents give some type of discount, based on customer loyalty, frequency, or volume. Respondents overwhelmingly stated that they face price pressure and client sensitivity driven by competition from large LSPs and low-cost (and sometimes unqualified) translators both in their home markets and abroad.
Common Sense Advisory regularly helps companies with revenue growth and cost reduction in a global business environment; advising them on local best practices, including translation and localization services.
“With some 23,000 vendors across the globe offering translation services, buyers of language services want to know how and where to get the best value and what charges should be included,” said Tahar Bouhafs, the company’s Chief Executive Officer. “Suppliers want to find out whether their prices are competitive against a nearly unlimited number of mostly unknown rivals. That’s what this industry research report explains.”
For more on the firm’s research, visit www.commonsenseadvisory.com.
About Common Sense Advisory
Common Sense Advisory, Inc. is an independent research and analysis firm specializing in the on- and offline operations driving business globalization, internationalization, localization, translation, and interpretation. Its research, consulting, and training help organizations improve the quality of their global business operations. For more information, visit: www.commonsenseadvisory.com or www.twitter.com/CSA_Research.