How to justify localization?

For many companies justifying localization costs seems like a Catch-22 dilemma. They know that if they localize their product or website they will get more interest from their international users, but they cannot justify localization and support costs till interest in these markets pick up.

At a recent prospective client meeting, I was asked the usual question: How much increase in revenue should I expect if you localize my product? For all of you who struggle with the same question, here are a few recommended ways to come up with a meaningful answer:

1. Before you even contemplate localizing your product, if it is currently sold and supported in English, consider selling it in other English speaking markets. Almost 40% of the world’s GDP is generated from English-speaking countries. If you are already selling your products in the USA, consider establishing a sales channel in the UK, Canada, Australia, New Zeeland, Ireland, or other non-English speaking countries that will be able to use your product in its English form, like The Netherlands, Scandinavia, India, Switzerland… Truth is if you cannot start generating revenues internationally without localization, then localization will most probably not help.
2. Once successful selling in international markets and generating a 20+% increment in revenues over your local market, you may then consider localization to allow international market penetration. With the increased international revenues, you should be able to justify localization costs which are typically a small fraction of your product or web development or optimization costs.
3. With an international sales force and an international client base, or at least their beginnings, you can start polling your sales people, your clients and prospective clients and try to identify the non-English speaking markets that have the most potential for you. It is much less costly to translate surveys than translate and maintain a product then wait for revenues to materialize. With online surveys, the cost and efforts of polling staff or clients are very manageable.
4. If you are the type of executive that likes to solicit input from your lieutenants before making major decisions, refer to the write-up: To localize or not to localize. Much of the information you need to make a decision can be obtained internally from your own staff.
5. If you are looking for a more tangible approach, consider a search-engine based process to help you more accurately identify your most lucrative international markets. It is centered on the use of Pay-Pre-Click campaigns. Refer to the write-up “Going Global on a Shoestring?!” for more information.

If none of the above help you make a decision, or if you do not have the time to investigate, then perhaps you should hold off on localization activities. Yes you can always delegate tasks to an outside localization vendor, but we recommend you only do that after you identify your international opportunity. Selling internationally will still require much of your time and resources. So make sure you free up the necessary time before you plunge in!