What is a Localization Strategy? And How to Build Yours

Localization

Shreelekha Singh

30 Jan 2024

19 min. read

Contents

Singapore, Sweden, South Korea, Ireland, and Hungary. A recent report by Remote identifies these as some of the hottest non-Western markets for business expansion. They offer booming economies and tech-savvy populations. But simply entering these markets isn't enough. To truly thrive, you need a plan. You need a localization strategy.

And our guide will help you create a great one.

Pro tip: To maximize the impact of your localization strategy, use a localization management platform—Centus. The platform is built to streamline the translation and management of multilingual content.

What is localization strategy?

A localization strategy is a plan for adapting a product or service to a new market. The goal is to make your product or service feel as if it were created specifically for that market. Therefore, the localization strategy should account for the unique cultural, linguistic, and regulatory characteristics of the target market. what is localization strategy? A good localization approach covers everything from translating language to tweaking marketing materials and product design so they align with local tastes and cultural norms.

Essentially, with localization, you are not just expanding into new markets, but also embedding local consumer behaviors and preferences into your business offering.

Why do you need a localization strategy?

Numbers don’t lie: Localization pays. Over 83% of businesses experience increased revenue thanks to strategic localization. Other benefits of a well-designed and properly implemented localization strategy are:

  • Brand alignment with local cultural values and norms
  • Increased trust and loyalty among local customers
  • Competitive advantage in local markets
  • Enhanced visibility and engagement with local online audiences
  • Improved global brand reputation management

When to implement a localization strategy?

The answer is simple: whenever you plan to expand your business beyond your native market, especially one with a different language, cultural norms, and consumer behaviors.

A localization plan is crucial if you plan to:

  • launch a website or marketing campaign in a new region
  • offer products or services to international customers
  • build brand awareness and loyalty in a foreign market
  • offer products and services to specific demographics or regions within your home market

How to build a localization strategy

Building a winning localization strategy requires a deep understanding of the target market, the problem you want to solve for them, and how to adapt your product to solve it—using the right technology and resources, of course. Let’s split this process into six steps and cover them one by one. image005.webp

Step 1: Set localization goals and objectives

To start, understand why you are localizing your product or service in the first place. The overarching objective of your brand localization efforts is to improve your bottom line. Understanding this goal, you can lean into specific objectives.

For example, you might want to focus on improving your customer retention overseas. Or increasing the number of leads. Or establishing yourself as an authority in your industry through thought leadership content. Or all of the above.

To measure the effectiveness of your localization efforts, continuously monitor qualitative metrics, like customer feedback, and quantitative metrics, like website traffic. Let’s examine them in detail:

Website traffic and engagement

Find out how well your localized site is doing. Are people interested in your website content? Do they linger or leave after a few moments? To answer these questions, check the following metrics:

  • Visitor numbers: Use website analytics tools like Google Analytics to track unique visitors from your target markets. Monitor trends over time and compare them to overall website traffic.
  • Bounce rates: This metric measures the percentage of visitors who leave your website after viewing only one page. A lower bounce rate on localized pages indicates increased engagement.

Bounce rate = (Single-page sessions / All sessions) x 100%

  • Time spent on page: Track how long visitors spend on your localized pages. Longer average time on page suggests a deeper engagement with your content.

Average time on page = Total time spent on page / Number of pageviews

  • Conversions: Monitor desired actions taken by visitors, such as signing up for a newsletter, making a purchase, or contacting your team. Analyze conversion rates for different localized landing pages and calls to action.

Conversion rate = (Total conversions / Total visitors) x 100%

  • Social media engagement: Track likes, comments, shares, and click-through rates on your localized social media content. Use platform-specific analytics tools to measure engagement and community growth in your target markets.

Sales and revenue

Compare sales figures from specific target markets before and after localization efforts. Analyze trends and calculate percentage growth to assess the impact of localization on revenue. Be sure to also track the average amount spent per order in your target markets. This can indicate customer satisfaction and willingness to pay for your localized products or services.

Brand awareness and sentiment

Conduct surveys in your target markets to gauge brand recognition and recall. Track changes in brand awareness over time after implementing localization. There are several ways to keep track of people’s feelings towards your brand, including:

  • Online reviews and feedback: Analyze customer reviews and feedback on localized content, products, and services. Identify areas for improvement and address negative sentiment promptly.
  • Social media sentiment analysis: Use social listening tools to analyze the overall sentiment towards your brand in your target markets. Identify positive and negative mentions and adjust your approach accordingly.

Localization ROI

This metric depends on what localization goals you set for your strategy. Calculating the return on investment will involve comparing the costs of your localization efforts (including translation, marketing, and other related expenses) against the gains made from these efforts. This can be measured in terms of your goals like increased sales, market share, or even intangible benefits like improved brand perception.

Some benefits include:

  • Increased sales: Use sales data to quantify the increase in revenue in your target markets after localization.
  • Higher market share: Track your market share growth in specific regions post-localization.
  • Reduced customer acquisition costs: Analyze if localization efforts have led to more efficient customer acquisition in your target markets.
  • Improved brand reputation: Conduct brand perception surveys to quantify the positive impact of localization on your brand image in target markets. Assign monetary values to these benefits based on industry benchmarks or internal estimations.

While costs may include:

  • Translation and transcreation: Calculate the costs associated with professional translation and adaptation of your content for each target market.
  • Design adaptation: Include costs for adapting website design, marketing materials, and product packaging for cultural sensitivities.
  • Technology and software: Factor in the costs of any localization management systems or translation tools you use.
  • Team resources: Calculate the salaries and overhead costs associated with your localization team, including linguists, cultural consultants, and project managers.
  • Ongoing maintenance: Consider the costs of maintaining and updating your localized content over time.

Once you have quantified both benefits and costs, plug them into the localization ROI formula:

Localization ROI = (localization revenue - localization cost) / localization cost * 100.

By regularly reviewing these metrics, you can get a comprehensive view of how well your localization strategy is working. Remember, localization is a dynamic process, and success in one market doesn't guarantee success in another. Be prepared to continuously adapt and refine your approach based on the feedback and data you gather.

Step 2: Conduct thorough market research

Understanding your target market is the foundation of any effective localization strategy. Look beyond their language; study their culture, consumer behavior, and market dynamics. This step simply ensures that your localization efforts are grounded in a deep understanding of the people you want to reach.

Ask yourself:

  • Who are you targeting? Identify your ideal customer segments by analyzing demographics, economic indicators, and digital adoption rates. Use tools like surveys, focus groups, and social media analysis to gather detailed information about the market.
  • What are their cultural preferences?
    • Research local customs, values, humor, and communication styles.
    • Create detailed profiles of your ideal customers in each market.
    • Analyze the steps customers take from discovering your product to making a purchase, and adapt this journey to local contexts.
  • What are your competitors doing? Analyze the localization strategies of your key competitors to learn from their successes and identify potential gaps you can fill.
  • Who can offer insider knowledge? Partner with local experts and cultural consultants who can provide insights into local customs, values, and communication styles.

The more you understand your target audience, the better you can tailor your approach for effective engagement.

Here are a few methods to conduct in-depth market research:

  • Surveys: Send online surveys and distribute offline questionnaires to get a pulse of your target buyers. Keep your surveys short and focus on objective questions to collect quantitative data.
  • Interviews: Approach different stakeholders in the market—your potential customers, competitors, and others—to have 1:1 conversations. Interviews will provide you with qualitative information to supplement the survey data.
  • Observations: Understand customer behavior organically through observational research. Visit the places frequented by your target buyers to observe and analyze their decision-making habits.
  • Focus groups: Invite people to discuss or test your product and collect their responses. This goes beyond interviews to give you a collective view of your buyers.

If your localization efforts revolve primarily around website localization, use SEO tools like Moz or Ahrefs to understand what your competitors are doing. It goes like this:

  1. In Ahrefs, click Site Explorer
  2. Enter your competitor’s website URL in the search bar
  3. Click All locations to check the competitor’s traffic in different areas
  4. Click Show results

Ahrefs’ location filter Carefully examine the number of visitors in each location, organic keywords, paid keywords, and other SEO metrics. Repeat this process for other competitors to gain valuable insights into the market landscape. For more information, read our website localization guide.

Step 3: Identify areas of localization

Your strategy should outline the areas of localization. It could be your product, service, website, marketing materials, or a combination of these elements. This step ensures your offerings are not just understood but also appreciated and accepted in the new market. It involves several key considerations:

  • Product or service localization Does your product or service need changes to fit the new market? If you offer physical products, consider adapting packaging, labeling, and instructions to comply with local regulations and languages. For services, think about tailoring your offerings to suit the specific demands or cultural expectations of the new market. This might involve customizing service features or pricing structures.
  • Website localization Your website is often the first thing people see. Translate all key website content into the local language, including product descriptions, FAQs, and contact information. Adjust multimedia content to reflect the local culture and ensure that the user interface, such as buttons and navigation menus, is user-friendly and intuitive for the local audience.
  • Local SEO (Search Engine Optimization) Make sure your website shows up in local search results. This means finding the right keywords and content that locals would search for online. Optimize your website content, including meta titles, descriptions, and headers, with these keywords.
  • Marketing materials localization Look at your brochures, flyers, and other marketing elements. Do they need a makeover to connect with local audiences? Work with local designers and copywriters who understand the culture and can create marketing materials that command attention. Make sure your visuals, such as images and graphics, are culturally sensitive and appropriate. Don't forget to incorporate testimonials and reviews from local customers to build your credibility.
  • Email campaign localization Personalize your email messages by using the local language and catering to local interests. You should also consider segmenting your email list by location to send targeted messages to specific regions or markets, instead of an expensive email blast. Pay attention to the timing of your email campaigns to align them with local time zones and preferences.
  • Social media ad localization Make your social media ads feel like they were created by locals. You can create better buzz when you collaborate with local influencers or experts to promote your products or services authentically. Brands like Coca-Cola have got this part down to a science. Conduct A/B testing with different ad copies, images, and CTAs to also determine what resonates best with the local audience. Cocacola partnered with the Kpop girl group, NewJeans Source: People
  • User guides and customer support If you have guides or FAQs for your product, think about translating them. People prefer getting help in their language, so it's a good idea to offer that. Ensure that the content is user-friendly and easy to understand, even for non-technical users. You should also offer local customer support channels, such as a dedicated hotline or email address, to assist with any queries related to your product or service.
  • Legal and regulatory compliance Don't forget about the local laws and rules. Make sure your localization follows all the regulations, from product labels to data privacy.

Pro tip: Human expertise matters. While machine translation can be a helpful tool for initial drafts, invest in qualified human translators who possess both language fluency and cultural understanding.

Remember, content and product adaptation is an ongoing process. Be prepared to refine your approach as you learn more about your audience and their evolving preferences.

Step 4: Allocate a budget

Budget allocation is a critical aspect of building a successful localization strategy. It involves determining how much financial resources you can dedicate to the various elements of localization.

Here are some general projects you should budget for when creating your localization plan, along with estimated costs:

  • Translation costs: This core expense varies widely, typically ranging from $0.05 to $0.25 per word. Factors like language complexity, desired turnaround time, and document type (legal vs. marketing) influence the costs.
  • Development costs: Adapting your website or product for different markets can involve technical adjustments. Budget between $10,000 and $50,000 (or more) for UI/UX modifications, local payment gateways, and content management systems—depending on the industry price in your country. Custom software development also adds additional costs.
  • Quality assurance costs: Allocate resources for proper quality assurance to avoid brand-damaging mistakes. Expect professional manual revisions to cost $0.02 to $0.05 per word and $75 to $150 per hour.
  • Technology investments: Streamline your workflow with localization platforms and translation management tools. You might think Excel sheets can work wonders, but it's easy to get overwhelmed with the sheer bulk of localization data. Subscription fees for localization tools often range from $29 to $500 per month based on features and volume.

Please note that these are general estimates and can vary significantly based on your specific project scope, industry, and target markets. Continuously monitor your budget and analyze ROI for different areas. This helps you adjust resource allocation based on performance, and refine your strategy for long-term financial sustainability.

Step 5: Assemble a localization team

After you've finalized your goals, budget, and guidelines, determine who will perform localization. You can create a localization team either as a part of your marketing department or as a standalone department.

Here are a few essential positions to include in your team:

  • Top management: These roles will supervise the entire process, design the strategy, and make necessary adjustments to maximize your international growth.

Roles: Product Manager, Localization Manager, Program Director

  • Production and development: These roles will perform the day-to-day responsibilities in your campaigns, like translation, software development, measurement, and more.

Roles: Translator, Software Developer, Localization Engineer

  • Quality assurance: These roles will monitor the quality and accuracy of your localization efforts.

Roles: Localization Tester, Quality Manager

Step 6: Choose localization tools

Having the right set of localization tools at your disposal can make all the difference in the efficiency and effectiveness of your localization business strategy. Localization tools help streamline the process, reduce costs, and ensure linguistic accuracy. They include:

  • Translation management systems (TMS): These tools centralize and streamline your entire localization workflow, allowing you to manage content, translators, and resources like a well-oiled machine.
  • Computer-assisted translation (CAT) Tools: These are any contemporary translator's trusty sidekicks. They boost efficiency by suggesting past translations, highlighting repetitions, and ensuring consistency across projects. CAT tools are great for when you have frequent localization needs like blog posts or social media content.
  • Localization platforms: These all-in-one solutions, like Centus, that combine TMS and CAT functionalities with additional features like machine translation integration, project management tools, and quality assurance dashboards. They are ideal for growing companies expanding into multiple markets with regular website updates and marketing campaigns.
  • Machine translation (MT) engines: These automated assistants (like Google Translate and DeepL) offer quick, rough translations, perfect for understanding the gist of content or generating initial drafts. However, they're not extremely reliable with marketing materials, ambiguous words, or sensitive documents. They work best for casual content like simple blog posts or user reviews.
  • Content management systems (CMS) with localization support: If you have a website or digital content, consider CMS platforms like WordPress and Adobe Commerce that offer built-in localization capabilities. These systems allow you to manage and update content across multiple languages seamlessly.

Here's a little breakdown to help you know which tools to go with:

  • Small businesses: Start with MT and CAT tools or even freelance translators for simple projects.
  • Growing companies: You can start with a TMS system and a translation agency. However, as your needs grow, explore localization platforms to meet the demand.
  • Global enterprises: Invest in robust TMS or work with a localization platform to handle complex workflows and high volumes.

Tips to avoid localization mistakes

Crafting an effective localization strategy is a bit like walking a tightrope – it requires balance, precision, and a clear focus. To help, here are some practical tips and common pitfalls to avoid. These pointers focus on combining technology with human expertise, continuously adapting your approach, and ensuring legal compliance.

  • Tech is great, but people are better. Although machine translation has advanced, it cannot replace the nuanced understanding of a human translator. For accurate and culturally relevant translations, blend machine efficiency with human expertise.
  • Don't set it and forget it. Localization is an ongoing journey, not a one-time fix. As your brand and markets evolve, keep your content fresh and relevant. Think of it as a living, breathing thing!
  • Allocate your resources wisely. Balance the cost of localization with expected returns. You should also regularly evaluate the ROI of your localization efforts to ensure effective resource utilization.
  • Measure and optimize. Use KPIs like website traffic, conversion rates, sales, and customer feedback to assess and optimize your strategy regularly. This helps in identifying areas for improvement.
  • Local experts are your friends. Partnering with people who know the local scene is a smart move. They'll guide you through legal regulations, help you adapt your marketing, and even connect you with local influencers.
  • Rules matter. Every country has its own legal and privacy regulations. Do your research and make sure your localized content plays by the rules. For example, Facebook faced fines in Europe for not complying with GDPR regulations. Ensure you're aware of and comply with these local laws.
  • Avoid over-localization. Be careful not to dilute your brand identity in an effort to localize. Maintain a balance between adapting to local markets and preserving your brand’s core essence.
  • Consider cultural sensitivities. Humor, imagery, and even colors can have different interpretations in different cultures. Conduct cultural audits and involve cultural consultants to ensure your localized content resonates without offending anyone. A notable example was Pepsi's "Come Alive with Pepsi" campaign during BLM protests. The ad featured Kendall Jenner protesting police in the US, which was seen as disrespectful and tone-deaf in many other countries.

In a nutshell, a good localization strategy means finding what makes each market tick—from the language they speak to the way they live. It requires a continuous commitment to adapt and grow with your target markets.

5 Localization strategy examples to inspire your business

Before you start outlining your localization strategy, take a look at these five successful examples of localization.

H&M

H&M follows a hyper-localization approach where they use customer data across different regions to arrange customized inventory for every location. The retail brand analyzes store receipts and loyalty cards to identify customer preferences and maintain full stocks of the most popular items.

For example, if H&M pants are popular in location A, but skirts sell out faster in location B, they'll adjust inventory in both locations to better cater to these demands. H&M store Source: Fashion United

Netflix

Netflix started its international expansion in 2010 with a new target audience in Canada. This simple expansion campaign gave them the necessary experience to create a successful localization strategy for more challenging locations. Soon enough, Netflix reaped massive success in culturally diverse countries like Japan, India, and Korea.

Netflix’s localization plan hinged on three main factors:

  • Translation: Netflix translates all subtitles in multiple languages and dubs voiceovers for each locale. The OTT brand runs A/B tests to optimize its translation for maximum customer satisfaction.
  • Transcreation: Producing original content in local languages gave Netflix a competitive advantage. Many of its foreign-language shows, like Dark, Squid Game, and Money Heist, have boosted the company's bottom line and popularity globally.
  • UX design: Netflix follows a “pseudo localization” tactic to create a personalized user experience for new markets from scratch and deliver a seamless user experience.

Netflix website Source: Flixed

Domino's

Domino's is the most successful global brand among all major fast food chains like Pizza Hut, Mcdonald's, KFC, and Subway. Their localization strategy went deeper than just changing website copy and overall content. Domino’s localized their menu to offer local buyers a more welcoming experience.

For example, when Domino's started expanding across India, they created fusion pizzas with locally popular dishes to become a fan favorite. Instead of asking people to try Western pizzas, they blended into the local culture to give people what they wanted. Domino's Indian website Source: Dineout

Nintendo

Nintendo's launch and gradual popularity in the US market is another classic case study for localization success. In the 1980s, Nintendo's Japanese games faced heavy censorship in the US because of sexual references and foul language. But the company turned the tables by designing more culturally appropriate games based on American themes.

Nintendo also localized some of their top-ranking Japanese games, like Mortal Kombat and MOTHER 2, by removing excessive visualization of violence and sexually explicit graphics. What’s more, the game dialogue was translated to appease the more conservative American audience. Nintendo games Source: Legends of Localization

TripAdvisor

TripAdvisor’s Chinese market foray shows how to ace the localization strategy. After 60 million website visits from Chinese-speaking users, TripAdvisor launched a dedicated app for Chinese travelers worldwide.

TripAdvisor customized the user experience for three types of users from Mainland China, Taiwan, and overseas Chinese people. This unique strategy covered every user persona's travel-related needs by giving them a more familiar interface and chat in their own language. Tripadvisor website Source: TripAdvisor

Get the week's best content!

By subscribing, you are agreeing to have your personal information managed in accordance with the terms of Centus’s Privacy Policy ->