Translation firms today experience an ever-changing pricing abode. Customers are looking for more value. This puts extra pressure on localization agencies. Now, they have to cut their prices to attract more customers. However, cutting prices is not always the best option. This can lead to diminished profits. And can damage the entire brand image. Value-based Customers refrain from translation agencies that cut prices to attract them.
It promulgates the notion that services are compromising on their quality. Instead, the firm should focus on selling value, not price. Let’s take the example of Arabic Translation services. They target a specific segment that wants to get their content translated into the Arabic language. Hence, never lower their prices. This sends customers a message, that they are receiving quality in exchange for their money.
Pricing Strategies that Localization Agencies Should Adopt
The pricing range for almost every localization firm falls between two perimeters;
- Excessively inexpensive to generate any profit
- Unreasonably high to generate any demand.
These two aspects decide the diameter for price setting. Meanwhile, customer perception is what sets the standard for the price ceiling. Some services are not purchased because the customer feels that the price is greater than the value being offered by the translation firm.
Let’s discuss some of the pricing strategies adopted by renowned translation agencies, like, Korean Translation Services.
Customer Value-Based Pricing
The price of translation services is ultimately judged by the end consumer. Customer perception of the price is dependent upon the perceived value of the service. And that is what Customer Value-Based Pricing is all about.
Translation firms, such as Arabic Translation services, choose to opt for customer value based-pricing. They try to set a price that can encapsulate the consumer perception pertaining to the benefits received from their organization.
Moreover, the price-setting takes place concurrently with the marketing and designing of the language. Hence, the marketing team has to justify whether the price paid by the customer is even worth the services they are availing of or not.
Translation agencies have realized that their consumer base originates from different demographics. Every customer is not going to avail of the golden or premium package from your translation firm. Many will choose the basic package that you may offer. Hence, translation firms, such as English translation services, offer different services at a separate price.
Localization companies have utilized Good-value pricing to give customers more quality for a standard price. For instance, the low prices offered by professional Korean translation services might not give customers the option for multiple re-edits. However, they will still enjoy the low prices.
People often confuse the term Value-added pricing. They assume it means to decrease your pricing in order to stand out from the competition. Or asking customers what they think is the suitable price for their service.
On the contrary, Value-added pricing involves the addition of more features or extra services on top of the basic service that you are offering. This is done to justify the high price that you want to charge from your consumers. For instance, in the covid-era, consumer spending behavior changed a lot.
And as a result, English translation services started to offer multiple features with the basic packages. Like multiple re-edits, one-to-one consultation from professional translators, and much more. This activity actually increased their prices. But captured customer attention.
Cost-based pricing consists of enabling prices that are in compliance with the costs incurred by the translation firms. These costs may include the acquiring and hiring of professional translators. The incorporation of the translation management systems. And the maintenance costs for its smooth operations. Moreover, the running costs of the online web presence. Along with enabling 24-7 customer care services.
In cost-based pricing, firms are just trying to recover what they have spent in creating a unit. These usually include all the fixed and variable costs. Moreover, there is no set standard cost for every translation firm. It all depends upon the number of languages being offered. Plus the magnitude and scale of operations. For such translation services, the costs are very high. Hence, the prices would be high as well, even if they are charging only at their costs incurred.
In competition-based pricing, translation firms alter their pricing according to the strategies adopted by their competitors. The end consumer will analyze the quality of your service based on the prices that other translation agencies have asked for.
Thereby, if your translation firm wants to adopt the competition-based pricing strategy, it needs to ask a couple of questions. First, the price that you have set for your language service, does your competitor offers the same price for a higher or lower value offering. Second, how well established are the language services providers. Have they’ve been in the market for a long or short period of time. And how have their prices changed over time?
These questions will provide a language service provider with sufficient market knowledge. This knowledge can be effectively utilized and judged to set their own pricing.
In this article, we tried to discuss various pricing strategies that translation firms can opt for. The main aspect to be capitalized on is the consumer perception of your brand. The value that you are offering to your customer will decide how your prices are set.
There are several strategies that you can choose from the list mentioned above. However, you need to be careful in your choice. And do not follow your competitors, rather learn and judge what they are doing. And then choose the best strategy for yourself, keeping your vision and business goals intact.