Wednesday, 2 February 2011

Is Differentiation in the Localization Industry Possible?

My emphatic answer to this question is YES!  Although we are all providing similar services, use the same vendor base, have similar technologies, etc. I still believe some amount of differentiation is possible.  Why?  Well, if Evian can do it with water then why can't a localization company distiguish itself among peers?

Each company has its own unique aspects, be it a vertical specialization such as life sciences or legal translation.  Each company has its own history (or not), unique set of employees and unique client base.  The uniqueness in any of these areas can be exploited and communicated that will give the target audience a feel for your organization, company ethos or methodology that distinguishes your company from another.   Standing out in your unique way gives potential clients something to latch onto when evaluating potential suppliers and will help you stay in their minds.  Several companies I've worked for in the industry have done a reasonably good job of capitalizing on their unique qualities--from superior processes to years of specific experience to being the cool new kid on the block.  All took advantage of what made them slightly different from very similar competitors and all have very good market recognition.

IMO there are two reasons companies in our industry generally don't do this. 

First, their overall business strategy is unclear, either because they are trying to be all things to all people, or they simply haven't thought about areas on which they wish to concentrate.  If the LSP doesn't have a clear idea of its identity, then the market is unlikely to have one either.

The second is a lack of marketing acumen.  Very few LSPs have a dedicated marketing person and marketing is done on an ad hoc basis, with sales people (who feel the lack of marketing most accutely) filling in the gap instead.  This can potentially lead to your company having a number of marketing activities that can be contradictory or even dentrimental, depending on the level of competency of the sales person.  They will always step in where there is a vacuum, but this is neither professional nor desired.

There are some good reasons for this, since a dedicated marketing person costs money.  Many companies are simply too small to have the luxury of a full-time marketer.  However, outsourcing some marketing activities is something I would highly recommend.  There are many, many freelance marketers available who will work on specific things such as writing a press release or marketing piece.  Others can provide a limited amount of ongoing marketing support on a retainer, which can be negotiated depending on the level of service desired. 

Once your identity is established, the marketer's role then becomes one of generating qualified leads (the primary function of marketing) for your sales people to work and ultimately close.  Today's marketers have more tools than ever--many very low in cost--that can help get your message out and generate leads for your sales people to close.  But that is another conversation which I will leave for now.


  1. Thanks for this Jessica, I agree and have felt this for a while.

    In my experience few LSPs have any strategic direction or discipline and most end up "stuck in the middle" (not a cost leader, not differentiated, not focused), picking up whatever work they can.


    This reduces most LSPs to working with local business or a few more far-flung clients through aggressive SEO marketing.

    It is notable that, with a very few exceptions, the big players in our industry have got there by cost-cutting across the full range of sectors without much of an eye on quality. This is of detriment to the industry as a whole (and to us freelancers) as prices are driven.

    In my view, there is room at the top for tightly focused, highly specialised, quality/ROI-oriented LSPs that show real strategic direction and market themselves accordingly. Few LSPs seem to be taking this approach, however.


  2. It's partly genetic ... LSPs and SLVs evolve from the same competitive space as their competitors, customers and partners .... as cost of entry to the market is low. But yes, I agree, strategic differentiation is typically lacking. Not always, but in many cases. Where it exists the story is better, the sales cycle better managed, winning more likely. But when you're starting out it's hard for people to appreciate the value in limiting the scope of their market, especially in the short term. Focus, Focus, Focus I guess is the mantra. IMHO, true differentiation is marginal but as Jessica said, if it can be done for water ... then words too!

  3. @David - interesting link. I'll study further and see if I can place LSPs in the grid!

    @Ian - agreed on most counts. Focus on what you do best, do it well and tell the world about it. Operative part is the "telling." Many simply don't or are afraid to for fear that a competitor will know who their clients are. A good competitor already knows this. SDL certainly isn't afraid to let the world know who its clients are in some very well done video case studies on its home page.

    But you don't need video case studies to market well. And while true differentiation is difficult to achieve, letting your potential clients know more about you can only help them make a more informed choice (or simply get you on the radar!).

    As the industry matures I believe marketing will become more valued as LSPs want more and more to be heard and need professional know-how in order to do so...just as sales has become professionalized over the year beyond the image of the used car salesman or a "necessary evil." Time will tell!

  4. Great post, Jessica. My company has been working hard over the past several months to develop and implement a strategy for distinguishing ourselves from other LSPs. Your post effectively profiles what we used to be--a catch all localization company with little marketing direction. We've now committed resources to a centralized and targeted marketing approach which showcases the talent we have in the company.