How to Measure the Effectiveness of Localization: ROI, Key Metrics, and KPIs

The theory is well known: localization is supposed to help your product connect across cultures and/or markets, bridging language gaps to resonate with different audiences. But here’s the big question—how do you check that your localization efforts are working at all? Translating content, website, and the rest of it is one thing, but another to measure the impact it has.

To measure this productivity, businesses use Key Performance Indicators (KPIs). These are not just numbers—they’re your verifiable proof that localization is making a real difference. Metrics like user engagement, message clarity, and conversion rates reveal how well your message is landing across markets. In this post, we are tapping into insights from industry experts to spotlight five essential metrics that show how localization drives revenue and boosts your brand’s impact in a target market. Ready to see if your localization efforts are paying off? Let’s go!

A Few Tips to Better Measure Localization Success

Before we dive right in, let's review a few non-KPIs ways to track the progress of your localization project. It's not always about numbers, you know! A successful localization is also about keeping the team aligned, gathering insights from real-time experiences, and ensuring everyone is on the same page. By fostering open communication and encouraging collaboration, you can capture the full picture of how your localization efforts are performing.

• Weekly Team Huddles: Gather the troops! Regular calls keep everyone on the same wavelength, so you can tackle challenges, share insights, and tweak strategies before they snowball.

• Mix It Up Across Departments: Localization isn’t just for linguists. Bring in marketing, customer support, and other teams to get fresh perspectives that make your content click across the board.

• Listen to the Locals: Dive into user feedback together to catch any quirky phrases or cultural slip-ups. Fixing these little things fast makes a big difference in user experience.

• Quarterly Content Checkups: Think of it as a spring clean—every few months, review your localized content to make sure it’s still sharp, relevant, and culturally spot-on.

These tips will help your localization team to work better and achieve better results in creating a truly localized product.

KPIs and Metrics for Measuring the Localization Success

Broadly speaking, localization KPIs can be split into two large groups:

1. KPIs relating to translation

2. KPIs relating to performance

Translation and localization go hand in hand but are not interchangeable, and this is not an exception as any experienced translator will tell you. Let's first explore the translation KPIs.

Translation Key Metrics

Turnaround Time

Let’s kick off with the obvious: Turnaround Time. Translation is only valuable when it’s out there, working its magic! Turnaround time is all about efficiency, and in the fast-paced world of content, speed can be a game-changer. The quicker you get those translations out, the faster you boost time-to-market and keep customers happy.

• How to measure it? Start simple. For bigger tasks, track start and end dates with tools like JIRA, Trello, or Notion. Want to spot bottlenecks? Visualize it with Gantt charts—think of it as finding the slowest link in the localization chain.

If you’re planning to scale or roll out high-volume machine translations (think user-generated content or chatbots), getting speed right is crucial. While perfection is great, sometimes a speedy, near-perfect translation does the job just fine—because the goal is to keep things moving, not stuck in translation limbo.

Translation Quality KPI

Quality is your king when a localization project is underway. Think of metrics like first-time quality (the percentage of translations that pass quality checks on the first go) and error rate (how often mistakes pop up) as your quality control crew. Not only do they keep standards high, but they can also help manage costs by setting quality thresholds for different types of content and optimizing workflow accordingly.

So, how do you measure quality? Bring in trained linguists or bilingual reviewers to rate translations on accuracy, fluency, and readability. Score each piece based on these criteria to keep things consistent. And if you want a tech boost, tools like BLEU (Bilingual Evaluation Understudy), TER (Translation Edit Rate), or METEOR can give your translations a quality score automatically—because even the best linguists can use a little help now and then.

Partnering with a productive Translation Management System (TMS) can also help you with project management. TMS like Localit offer AI-powered translations, streamlined work processes, uniform translations, and high quality with high speeds. The main difference between TMS is the price (Localit is quite affordable, while a more established Lokalise might drain your resources). In any case, don't shy away from taking these systems for a test drive, Lokalit and some others have free plans for you get a feel of them.

Performance KPIs

Now, we can identify areas that reflect how your translated and localized content behaves in a new market and whether it was all worth it.

Customer Satisfaction Score (CSAT)

CSAT surveys—aka Customer Satisfaction Score—are the gold standard for measuring your localization success and gauging how happy customers are with localized products. A high CSAT score? That’s a sure sign your localization efforts are hitting the mark, creating happy customers who stick around and stay loyal.

To measure CSAT, companies send quick surveys where users rate their experience on a scale, usually from 1 to 5 or 1 to 7 (1 is “yikes,” and 5 or 7 is “nailed it!”). Track these scores over time with line graphs to watch satisfaction trends, and collect both numbers and comments for a mix of hard data and juicy insights.

What can CSAT tell you? Take a look below:

• Gauge customer satisfaction with a specific area of your business, helping you spot any issues.

• Strengthen customer relationships and boost overall satisfaction.

• Refine and streamline business processes for smoother operations.

• Identify which products or services to prioritize for future development.

ROI and Cost Efficiency

Keeping tabs on localization costs by language or market is like having a financial GPS—it guides you to showcase ROI and spot areas ripe for savings or investment. Metrics such as cost per word, budget adherence, and cost per revenue (total translation spend divided by total revenue) offer insights that help allocate resources efficiently. Plus, they arm you with the data needed to justify budget increases for boosting performance in specific areas.

For companies venturing into new markets, this data is gold. It enables accurate forecasting of future expenses and aligns with broader strategic goals. On a more granular level, tracking translation savings highlights the value you're getting from your translation tools and pinpoints where to best deploy your internal localization resources.

Evaluating the cost-effectiveness of localization efforts involves considering translation expenses, resource utilization, and return on investment (ROI). According to a study by Translized, the formula for calculating ROI is:

ROI = (Localization Benefits - Localization Costs) / Localization Costs

For example, if you spent $50,000 on localization and generated $100,000 in additional revenue, your ROI would be:

ROI = ($100,000 - $50,000) / $50,000 = 1

This ROI of 1 indicates a 100% return on your localization investment.

To measure cost-effectiveness:

• Track translation expenses: Monitor costs per word or project, vendor fees, and internal resource allocation.

• Compare against budgets: Assess costs against predefined budgets or industry benchmarks to gauge efficiency and ROI.

SEO Performance

International SEO is all about making your website pop up at the top of search engine results (SERPs) across different languages and regions. The goal? To make sure local audiences find you first, no matter where they’re searching from. If you want to rule the SERPs globally, here’s how to measure it and what to focus on.

• How to measure: Use SEO tools to track visibility and rankings for your localized content. Pay attention to organic search traffic, keyword rankings, backlinks, and domain authority for your localized pages. These metrics will help you see how well your site is competing in each market.

Here’s a quick comparison of main SEO metrics to keep an eye on:

By tracking these metrics, you can fine-tune your international SEO strategy and boost your brand’s visibility in every corner of the web.

How to Use KPIs to Optimize Your Performance

Now that we've reviewed the main KPIs you'll need to track, logically there arises a question: what do you do with all these numbers? Well, worry not because we've got you covered! Here's a four-step guide to mastering the KPI game and transforming cold numbers into a heart-warming success.

1. Define Clear Objectives

Start by pinpointing what success looks like for your business. Whether it's boosting sales, enhancing customer satisfaction, or improving operational efficiency, clear goals are essential. Tools like SMART criteria (Specific, Measurable, Achievable, Relevant, Time-bound) can help in setting these objectives.

1. Select Relevant KPIs

Choose KPIs that align directly with your objectives. For instance, if customer satisfaction is a priority, track metrics like Net Promoter Score (NPS) or CSAT that we've already covered. Platforms such as SurveyMonkey or Qualtrics can assist in gathering this data.

1. Utilize Robust Analytics Tools

Leverage analytics software to monitor and analyze your KPIs. Google Analytics offers insights into website traffic and user behavior, while Tableau provides data visualization capabilities to interpret complex data sets.

1. Communicate Findings Effectively

Share KPI insights with your team to foster a data-driven culture. Dashboards created with tools like Power BI can present data in an accessible format, enabling informed decision-making across the organization.

Localization Efforts Made Easier with KPIs

Localization is not a walk in the park, we all know that. However, it can be made easier by applying the KPI and key metric routine to your business and measuring the impact of localization will become as easy as pie. With the right localization metrics, you can assess your localization ROI and ensure that your translation quality is not just a shot in the dark but a precise arrow hitting your target audience right in the bullseye.

There are many more aspects to cover here but you don't want to get lost in a forest of numbers, spreadsheets, analytics, and alike. Focus on the ones we've covered to make sure that your business doesn't drown in a sea of paperwork and can steadily move towards its goal: a successful localization and a nice market share.