The Two Biggest Hidden Costs Of In-House Localization

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Your company is ready to expand—and not just in your home country. You want a piece of those rapidly growing Asian and South American markets. To really attract these new customers though, in-house localization isn’t enough. Expert translation is a must. You want potential new clients and customers in foreign markets to find your brand message compelling. And you have already determined that localization of your brand and marketing assets is the way to go.

How do you tackle the project of localizing your message (and ad copy and print collateral and website and packaging)? Basically, you have two choices: create an in-house team or outsource to a firm that specializes in localization and transcreation.

At Glyph, we have an obvious bias towards the latter approach, but that is really an outgrowth of the fact that, in many cases, an out-of-house team is more efficient and effective than doing it yourself. (For more on this, see Why Professional Translation Services Are About More Than Fluency.) Companies often think that doing it all in-house is the more economical choice because current staffers can be used to manage or perform the work. The cost of allocating a cash budget to an outside firm can look very unattractive relative to a payroll line item that is already on the books. You may have people already on your payroll who are dying to prove that semester in Buenos Aires was worth the money. Unfortunately, there are a number of hidden costs to going in-house. And they are not immediately apparent.

Errors that Double Other Costs

Let’s start with the most obvious potential cost: translation errors. You might have multi-lingual staffers who can translate your company’s products, services and marketing materials into a wide variety of languages. But does your in-house team have extensive experience with the idioms of each and every language you’ll need as well as the individual dynamics of the markets you are targeting? More important, has your in-house team actually lived and worked in your target market?

We always rely on and recommend using native speakers with specific market knowledge. Some travel and language experience or even a university approved minor is not the same as the comprehensive knowledge of both the language and culture had by a native speaker.

If your in-house team lacks total confidence in even one of the languages in question, you run the risk of translation errors, which is embarrassing. Now embarrassment doesn’t cost money. But it’s really the least of your worries. Errors also have the nasty habit of costing you potential new business. That is a hidden cost that’s difficult to calculate and may not be a compelling reason to avoid the risk. However, there are several very real and costly results of translation errors that go straight to the bottom line: Translation errors that make their way into packaging and signage often necessitate reprinting once discovered (thus doubling your print costs). Ditto translation errors that put you afoul of any local regulations (say, in the Terms & Conditions of your website).

Time Investments that Don’t Pay Off

Translating is not a quick process. Do you want to tie up your employees on localization work? Or would you rather they tackle other work that is part of their area of expertise? There is a reason every company has different teams working on different projects. If we all tried to do everything, nothing would get done. Your in-house employees might be more efficient at and better off drafting new marketing materials, scheduling meetings with key contacts or researching other new international markets. By outsourcing your localization work, you free up your employees to take on work that results in higher profits for you and uses their time more efficiently.

But this isn’t a real cost. Instead, the real cost comes in calculating the difference between the time/cost it takes your in-house team to accomplish the work adequately and the cost of outsourcing. Let’s say that you are expanding into Brazil and have the amazing good fortune to have a native, bi-lingual Brazilian on staff who (even more amazingly) happens to work in your marketing department and is intimately familiar with your brand message. Assume this person is paid $50K per year (this makes the math easy) and you need 7,500 words translated for various brochures and a web site landing page of 750 words plus 4 or 5 online ads written targeting 10 keywords each. You could expect to pay about $1700 to $2000 to have an outside firm handle this using expert staff. Maybe less. It is exceedingly unlikely that your employee could get the job done in less than 2 weeks of work – thus costing you at least $2000 of staff time plus the value of any lost projects had that employee been doing work that was part of their original job description.

That’s real money spent. And while that cost doesn’t appear as an individual line item in your departmental budget, it does appear in the “time-lost” calculations done at year’s end when other goals aren’t met.

Dispassionate Cost Analysis is the Way to Go

Thriving in today’s global economy requires branching out and targeting foreign markets. To do this, you need to localize both your product and your marketing campaigns.

Although dealing with this new task in-house may seem like the most cost-effective strategy, this approach often comes with hidden costs. It is entirely possible that in-house translation is the most effective and efficient method for your business. But you can’t know that until you have a firm bid from outside firms for the work and have calculated your projected actual cost and potential costs associated with your in-house team. With these two numbers in hand, you can make an informed choice about what is best – and most effective – for your expansion efforts.

There are times when the hidden costs of in-house translating—everything from errors to employee time—are far larger than what companies expect. Avoid hurting your bottom line by regularly reviewing how much doing the work in-house is costing you. And if you do work with an in-house solution, check out our guide to building a more effective translation team. We think you’ll like it.

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