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Localisation and how it affects your profit margin

The ultimate goal of all businesses is to make profit. This is why brands heavily invest on any activity that can guarantee an increase on the balance sheet.

One method that greatly affects the profit margin of your business is localisation and we’ll explain why.

Several businesses are turning to localisation as their main tool for entering international markets and increasing business revenue. It’s been proven beyond doubt that international brands use localisation as a necessity for consolidating their brand image and gaining further market share in foreign lands.

Given the surge on globalisation in world trade, localisation is going far beyond being just an avenue for global communication; it’s now a determining factor in how much profit a business makes.

Some important aspects of localisation for businesses include translation, adapting graphics and on-screen text, voice over and subtitling.

Localisation affects a brand in many ways including: global acceptance, market entry, sales and website traffic. All these factor will determine if the business is successful, localisation can either make or break the profits of a business and here is how:

World globe boat - Localisation and How it Affects Your Profit Margin

1. Finding your competitive advantage

Businesses today can easily operate on a global platform, making competition stronger than ever before. Consumers no longer depend on their local stores for all their needs. They can order products from China and have it delivered to their doorsteps in a few days.

Localisation has never been more necessary to give you an edge over your competitors as it is in the 21st century. A survey by Common Sense Advisory showed that 60% of online shoppers rarely or never buy from an English-only website.

Businesses that are aware of the advantages of localisation on sales use it as a tool for outranking the competition. Expecting foreign consumers to speak your language (a trait that many English speaking SMEs have been guilty of) may result in failure abroad as consumers might understand the brand on the surface but are not able to connect on an emotional level.

If you talk to a man in a language he understands, that goes to his head. If you talk to him in his language, that goes to his heart.

Nelson Mandela

2. Taking on a global market

Many ambitious brands have a long term goal of going global. However, many find it very difficult breaking out of their local markets. One of the reasons for this is that their products are not known or recognised and their advertising budget is limited.

A 2014 behavioural study by Common Sense Advisory revealed that 75% of customers say that they want products in their native language; again supporting the decision to localise your brand. It’s no secret that the more a business successfully captures new markets, the more it increases its global market share and if the marketing plan is successful then profits should rise too. Localisation helps businesses increase their market share by aiding them to break into various markets in a more natural way.

World Map transport - Localisation Profit

3. Effective communication

Common Sense Advisory polled 3,002 consumers in 10 countries in their native languages to find out if companies can increase their sales by localising their products, ads and websites.  They discovered that there was a substantial preference to communicate in the consumer’s mother tongue. Yet so many leading websites are still only providing one language option.

The study further revealed that many potential prospects that are unsure of their reading skills, tend to avoid English-language websites, they spend less time during their visits, and don’t buy products. Losing customers because your brand doesn’t speak their language can have devastating effects on profit margins.

4. Consolidates brand image

Coca-cola is one brand that has successfully consolidated its brand image around the world. It’s a brand that feels at home everywhere! It’s not surprising that Coca-Cola is globally accepted given the fact that they started localising their brands decades before the growth of the internet.

When a brand speaks the language of people, they are able to connect and build a relationship with them. An article by the Rain Group supports how emotions translate to sales. Consolidating your brand image can have a positive effect on customers’ buying behaviour and consequently, improve business profits.

With Coca-cola’s international success they can afford to take localisation one step further and create advertising campaigns unique to each country, check out their Coca-cola Morocco ad.

However, most brands can’t afford to create individual video campaigns using local actors speaking the native language etc every time they launch a new ad. That’s where expert localisation companies come in to help dub the speech by recording foreign language voice actors and adapting the on screen text in the video.

5. Improves web ranking

Several of the world’s top websites use localisation as a strategy to gain traffic from all around the world. A quick look at leading sites like Amazon, PayPal and Airbnb reveal an effective localisation system. It’s no wonder that they are among the world’s top websites.

Localisation also plays a huge role increasing search engine optimisation which is vital for website ranking. The extensive language options allows them to secure backlinks from websites all around the world. This increases the ranking of a site on Google and other search engines. Visibility of a business website equals the visibility of that business. An improved web ranking results can often translate to improved sales.

Localisation goes a long way in affecting the profit margins of your company. You can increase your brand’s revenue by establishing an effective localisation strategy.

Matinée can help you establish and implement a localisation strategy that works for your brand. Contact us today for a free personalised quote on our localisation services.