10 mistakes LSPs make and how to avoid them at #alcconf
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There are more than 26,000 language service providers (LSPs) throughout the world today. If you think that your business is completely different from that of your competitors, we have news for you – you have more in common with your competitors than you think! In ten years of doing research on language service and technology suppliers, we’ve noticed a pattern. Many LSPs are making the same mistakes, costing them hundreds of thousands of dollars or euros – or even millions. In this presentation, independent industry research firm Common Sense Advisory will reveal how to avoid the 10 most common mistakes that your peers are making. The topics we will cover highlight some of our latest research findings on winning more clients, selecting technology, choosing markets to target, deciding whether to add a new service, and much more. Come armed with your questions for this highly interactive session!
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10 mistakes LSPs make and how to avoid them at #alcconf
- 1. Ten Common Mistakes that LSPs Make and How to Avoid Them! Hélène Pielmeier Director of Industry Providers Service Copyright © 2013 by Common Sense Advisory, Inc.
- 2. Today’s presentation A brief introduction to our methodology Counter-productive behaviors that we have observed in our LSP consulting practice Pointers on what to do instead Twitter: @CSA_Research
- 3. About Common Sense Advisory Global business and language research – Translation, localization, globalization, etc. – Dedicated multinational research team Independent industry research firm – Vendor-neutral, buyer-agnostic – Qualitative and quantitative research – Interdisciplinary demand-supply methodology – Frequently cited in global media Clients in 30+ countries 10 years in business
- 5. Mistake #1 YOU SELL QUALITY Source: “Translation at Fortune 500 Companies,” Common Sense Advisory, Inc.
- 6. When was the last time a client called you and asked for a “quality” translation? When was the last time a client called you and asked for a “quality” translation? Source: “The Price-Quality Link: Insights for LSPs” Common Sense Advisory, Inc. 68% of buyers say paying more doesn’t change quality 41% believe the same when they pay less 68% of buyers say paying more doesn’t change quality 41% believe the same when they pay less
- 7. Quality means… - “… my requirements have been met” Source: “Buyer Views on Translation Quality – What Every LSP Needs to Know,” Common Sense Advisory, Inc. - “… staying on-message and on-brand” - “… avoiding adverse outcomes” - “… LSPs use the resources we provide” - “… minimizing headaches on our end” - “… consistency I can trust”
- 8. Sell benefits! Meet local customer expectations Maintain or increase the value of the brand Reach more customers in markets where they compete Meet local regulatory or legal requirements Increase overall revenue Communicate with and keep partners motivated Meet local language needs in their domestic market Keep up or gain an edge over competitors Help them enter new markets Communicate with and keep employees motivated Source: “Translation at Fortune 500 Companies,” Common Sense Advisory, Inc.
- 9. Mistake #2 YOU DELIVER BAD TRANSLATIONS
- 10. Do you deliver what the client thinks they pay for? Do you deliver what the client thinks they pay for? Source: “Translation Production Models,” Common Sense Advisory, Inc.
- 11. How LSPs respond to price pressure 55% Skip QA steps 54% Resort to lower- cost resources 31% Reduce customer service levels 19% Apply machine translation 71% Make less money Source: “The Price-Quality Link: Insights for LSPs” Common Sense Advisory, Inc.
- 12. Don’t be afraid to confront clients
- 13. Mistake #3 YOU FOCUS ON QUALITY
- 14. Do your clients get to decide how the project gets produced? Do your clients get to decide how the project gets produced?
- 15. Pick your base Choose your toppings (ANY COMBINATION) Choose your cooking style (CHOOSE ONE) Choose your fixings Add condiments (AS MANY AS YOU LIKE) Technical review Editing Back-translation Client review Proofreading Layout review For publishing For information Glossary Style guide Reference material Legacy material Certification 11 22 33 44 55 our best-selling native-speaker option The Traditional pleases the subject-matter expert’s palate The Specialist appeals to advertising and marketing tastes The Artisan the finest in machine translation The Modernist Full text review Sampling Automated QA Signature sides (CHOOSE ONE) Side-by-side review Monolingual review Traditional sides (CHOOSE ONE) Offer what the client needs Source: “Translation Production Models,” Common Sense Advisory, Inc.
- 16. Mistake #4 YOU FIND SOLUTIONS
- 17. Are you constantly operating in reactive mode? Are you constantly operating in reactive mode? Source: “Translation Production Models” Common Sense Advisory, Inc.
- 19. Mistake #5 YOU WANT TO BE THE LARGEST LSP
- 20. What is your differentiator? What is your differentiator?
- 21. Specialize
- 22. Mistake #6 YOU LOVE LANGUAGES
- 23. How often do you look at your sales pipeline, vendor costs, and billing results? How often do you look at your sales pipeline, vendor costs, and billing results? Source: “The Owner’s Guide to Maximizing LSP Value,” Common Sense Advisory, Inc.
- 24. Treat your company as a business
- 25. Mistake #7 YOU MANAGE PEOPLE
- 26. Is hard work your measure of success? Is hard work your measure of success? Source: “The Life of Project Managers,” Common Sense Advisory, Inc.
- 27. Manage results instead Source: “Why Work Sucks and How to Fix It,” Cali Ressler and Jody Thompson
- 28. Mistake #8 YOU HIRE PEOPLE LIKE YOU
- 29. What do you look for in candidates? What do you look for in candidates?
- 30. Seek diversity of ideas
- 31. Mistake #9 YOU DO IT ALL
- 32. Are you preventing the company from growing because you can’t keep up? Are you preventing the company from growing because you can’t keep up?
- 33. Delegate Source: “The Owner’s Guide to Maximizing LSP Value,” Common Sense Advisory, Inc.
- 34. Mistake #10 YOU KNOW IT ALL
- 35. Do you do reality checks with clients, technology, competitors, other industries? Do you do reality checks with clients, technology, competitors, other industries?
- 36. Learn from beyond your operation
- 37. Ten mistakes and their counterpoint DON’T DO Sell quality Sell benefits Deliver bad translations Address issues with clients Focus on quality Offer what the client needs Reactively find solutions Proactively address issues Focus on being the largest Specialize
- 38. Ten best behaviors DON’T DO Focus on the love of languages Treat your company as a business Manage people Manage results Hire people like you Seek diversity of ideas Do it all yourself Delegate Think you know it all Learn from beyond your operation
- 39. Research referenced in this presentation “Marketing Language Services Online” “Price-Quality Link: Insights for LSPs” “Buyers Views on Translation Quality – What LSPs Need to Know” “Translation at Fortune 500 Companies” “Translation Production Models” The Owner’s Guide to Maximizing LSP Value”
- 40. Thank you. Hélène Pielmeier helene@commonsenseadvisory.com +1.978.275.0500 x 1115 • Research: www.commonsenseadvisory.com • Blog: www.globalwatchtower.com • Twitter: @CSA_Research Insight forglobal market leaders
Notes de l'éditeur
- Good afternoon everyone. My name is Hélène Pielmeier and I am the Director of the Industry Providers Service at Common Sense Advisory. I am a former translation agency executive myself and now have the chance to spend more time researching how LSPs work. Having been able to take a few steps back from the daily sales and production grind, it gave me some perspective... END
- So I am going to share with you today 10 common mistakes that LSPs make and how to avoid them. And let me tell you, I did most of those myself when I was in your shoes. When you are so close to your job, it is really hard to see patterns of behaviors that are counter-productive. Our research, advisory, and consulting practice allows us to observe first hand what happens at LSPs. In the presentation, I am going to give you a brief introduction on Common Sense Advisory and how we collect our data. Then, we ’ll jump into the mistakes we discovered and what to do about them. I will take questions at the end of the presentation so that we have a chance to go through the research first. If you wish to tweet during this session, feel free to use our Twitter handle: @CSA_Research. END
- Before I dive into my talk, I ’d like to take a few minutes to talk about Common Sense Advisory. [CLICK] We are a market research firm dedicated to language services and business globalization. [CLICK] We have brought the best practices of the market research business to the language industry. What that means is that we have no stake in any technology, vendor, or services. When we write about something, it ’s because our readers have told us that a topic is interesting or because we think that it’s important. We don’t produce random white papers or one-off surveys, but systematically interview and survey the market to know what’s going on. This regularity of coverage is critical because we are the de facto monitors for this industry. And when the mainstream media wants to know what ’s happening in the industry, they turn to us. [CLICK] So, in addition to covering the industry for the sake of its participants, we are making sure that the rest of the world knows about this critical business sector. [CLICK] We are based here in Boston, but we are global in nature and have clients in more than 30 countries throughout the world. We have team members based in Europe and in India. [CLICK] Now, let me quickly show you how we carry out our research. END
- Common Sense Advisory is on the “outside” of the industry looking in and we have access to all industry participants. As you can see here, we group buy-side organizations into the blue box at the top – these are the buyers that translation companies are trying to sell to, such as Google, Harley Davidson, or United Airlines. Below, in the green boxes, you can see the supply side of the market, which consists of technology vendors, language service providers and freelancers. We consider language service providers or LSPs to be organizations that have 2 or more full-time employees. Down below, you ’ll see that we have universities and associations in orange – these are the groups that help train and educate the suppliers in the market. We often include these groups in our research efforts as well. [CLICK] We use a variety of research methods to obtain information from all of these diverse market participants. We survey or interview them, we talk with them at our events and colloquia, we conduct detailed feature reviews of the technologies they provide, and we also carry out consulting engagements. In addition, we conduct a lot of other research, such as reviews of public financial data, and website reviews. END
- Let ’s not make you wait any longer to find out what you can change [CLICK]. The first mistake of all is to sell quality. Common Sense Advisory analyzed how LSPs market their services online. Out of 300 random LSP websites, we found out that 59% of LSPs use the word “quality” on their home page. You can see a few examples on screen. Does differentiation by claiming to be “the best” work? [CLICK] No, it actually gets you nowhere. END
- Read slide. [PAUSE] When you go buy a car, you don ’t ask for a safe car. You assume it will be safe and focus on the other features of interest to you. The same applies to translation. Quality is not a choice. Quality is assumed. Now, you will naturally think that when clients come and pressure you so much to reduce your prices, that they know they are asking for a “bad” translation. Well, that is actually not the case! We just completed a survey on the link between price and translation quality. And guess what? There isn’t a firm link. Buyers don’t think price influences quality much. [CLICK] 68% of buyers told us that quality doesn ’t change even when they pay more, and 41% of buyers think that quality remains the same, even when prices decrease. Quality is a reason why people leave. It is NOT the reason why people buy. END
- In another study we did in 2008 on buyer-views on translation quality and what LSPs need to know, buyers gave the following definitions for quality: [CLICK] Quality means my requirements have been met [CLICK] It means staying on-message and on-brand [CLICK] It means avoiding adverse outcomes [CLICK] … using the resources we provide [CLICK] … minimizing headaches on our end, and finally [CLICK] Quality means consistency I can trust Yes, some of these definitions flirt with linguistic quality. But quality is much more than that to clients. So don ’t stay stuck on the concept of linguistic quality. Too many LSPs focus their sales effort on quality... So, the big questions is… What should you sell instead? END
- Sell benefits! Think about why your clients are having their content translated. Last year we researched the Fortune 500 companies, an annual list of the largest corporations in the United States. We asked our survey respondents why they translated content into other languages. Their top three reasons focused on customer experience, brand, and market reach – not increasing sales, as you might have expected. [CLICK] The fourth most frequently cited reason for translating was to meet local regulatory or legal requirements. [CLICK] Enabling more revenue was cited by more than half of the respondents – but that ’s a smaller percentage than the nearly 80% who said meeting customer expectations was their top reason to translate. Factors further down the list support the top finishers: [CLICK] entering new markets and competing against rivals enable more revenue, meeting the needs of domestic multicultural markets falls in line with meeting customer expectations, and communication with employees and partners improves the ability of the company to meet customer expectations and revenue goals. END
- I gave you a hard time about selling quality translation. [CLICK] Now I will do the same about delivering bad translations. END
- Read slide [PAUSE] We saw earlier that many clients don ’t think quality goes down if they squeeze your prices down. But on your end, do you deliver exactly the same product if the client pays say 20 or 30% less than your standard rate? In our interviews on translation production models last year, LSPs admitted that pricing was a MAJOR reason why they deviate from their standard process. END
- This was also confirmed in our study on quality/price. Here is was the surveyed LSPs declared doing when confronted with lower prices. 71% make less money 55% skip QA steps 54% resort to lower-cost resources 31% reduce customer service levels 19% apply machine translation These strategies are not mistakes per se. The problem with this is that, most often, expectations are NOT managed with the client. So when the client finds an issue, they think you delivered a BAD translation. LSPs don ’t do a sufficient job explaining degrees of quality to clients. It is easier to deliver sub-par services than to confront the clients about the realities of what they will get for the price they pay. END
- You can typically predict which projects will result in “bad” translations but few LSPs thoroughly address the issue with clients upfront. Don’t be afraid to confront clients to do some risk management. They may have a hard time grasping the different quality levels, mostly because YOU’ve enforced this image of a single ultimate quality in the past. But you have to keep on educating them on how their decisions will change your process so that they can be part of the decision. Give them examples what quality looks like for the different service options you offer. By removing the expectation mismatch, you reduce the chances of being perceived as a poor quality agency when issues occur. END
- I am not quite down harping on you about quality. It is such a central theme to your businesses. In essence, it is too much of a theme. [CLICK] You focus on quality versus giving your clients what they want. END
- Read slide [PAUSE] I touched on this in the previous mistake, but it is very important to involve buyers in the decision on the quality level they want. If your clients are unable to decide, it is that you make it too complicated. Listen to what the client is asking and provide solutions that match their needs. Standard processes only work so often. Buyers need you to be flexible to adapt to what they want to accomplish, NOT to what you have to offer. END
- So the bottom line is that flexibility is a must. Flexibility starts with being willing to add or remove steps to your process. Some companies offer service menus just like this fun pizza example [CLICK]. The client chooses the type of translator [CLICK] They get to pick additional language services [CLICK] They decide if the translation is for publishing or for information only [CLICK] They choose the type of quality control they want or they can afford [CLICK] They can add bonus services to meet their specific needs. Now, does it mean you have to educate your clients for this approach to be successful? Absolutely! If the needs assessment wasn’t done right, and you propose the wrong solution, you may have issues. So your staff needs to be experts at guiding clients toward the right decision and explaining the pros and cons of each selection. The result? No, not just a pizza. Flexibility here means allowing seamless customization of client needs. If your client just wants translation with barebones quality controls for a document that is just for internal review, you need to have a clue how to produce that without creating havoc in your quality process. What I am trying to say is that it shouldn’t be an exception but something you are ready to offer as a choice for your clients. Keep in mind that if you don’t offer a similar logic, your competitors will. Flexibility is longer an optional element. It is a must have. END
- We ’ll finally move out of our series of errors tied to quality. Let’s discuss finding solutions. In theory, this is good. You want to find solutions to problems and resolve issues for clients. [CLICK] The problem is that there is a problem in the first place. Let’s explore that. END
- Read slide [PAUSE] LSPs are famous for resolving a multitude of problems a day. But you wouldn ’t have to do that if you operations considered those problems as natural things you had to deal with and had pre-thought ways of going about resolving them. Let ’s take the example of a client asking you to skip editing in your project process because they don’t have the time to get that step completed. If if your process is to always do TEP (Translate – Edit – Proof), this is a problem and you have to find a solution. Project managers have to constantly discover the same solutions because they are not engrained in your work philosophy. If you have a modular approach, you exactly know how to tackle the situation right from the start. It doesn ’t stop at offering flexible services to your clients. END
- You also have to invest time and money in training and technology. The amount of LSPs we talk to that don ’t have the systems to support their operation is impressive. If you still track your projects in Excel and manually prepare purchase orders for vendors, you really have to find ways to automate this and there are plenty of solutions out there. Let me take it a step further than technology too. Say you grow and now you need someone to manage your production team. Most of you don ’t have someone internally ready to take over. You have a problem and you find a solution: you look on the outside! Once again, you can prevent having to “find a solution” if you embrace a proactive mentality of tackling upcoming challenges. Plan for them in advance. Develop a career path for your staff. Invest in their training. The bottom line is that you have to proactively plan solutions to potential client requests and internal needs. If you tracked how much time you and your team are spending to find solutions reactively, you would realize that investing upfront reduces time and cost overall, but also greatly reduces stress. END
- Let ’s switch topic a little bit. We do frequent partner days with our clients where we help them define a strategy for their agency. One of the first questions we ask is what their goals are. Most companies think the right answer we look for is to be the largest translation company in the world or their continent. [CLICK] It is possible to be successful without being the largest LSP out there. END
- In our discussions with LSPs, the #1 reason they can ’t properly define a goal is that they don’t know what makes them different. Read [PAUSE] A little perspective can help with that. In my 13 years on the LSP-side, I thought our agency was a perfect example of a generalist with no clear differentiation. Once I read the Common Sense Advisory research, surveyed and interviewed other LSPs myself, I was immediately able to pinpoint what I missed all those years. Get some perspective yourself and ask your clients why their use your services. Seek external help too. Don ’t impose your views. END
- The counterpoint to being the largest LSP is to specialize and be the largest or best provider in a specific niche. Most of you prefer what we call “the asphyxiation route.” To prevent competition to play on your turf, you provide any language service under the sun. You think it leaves no room for your competition. That only works so well otherwise you’d all be much larger companies. I am actually currently interviewing LSPs around the world for a report on account management. I ’ve been asking owners and sales executives if they think that being specialized makes it harder to retain clients. All – with no exception – said that being highly specialized is an advantage got both sales and client retention. Unless you have real client retention issues, your bigger issue is usually new sales. How do you know if that ’s your case? If your year-to-year client retention scores fall below 65-70%, you have client retention issues. New sales are easier when you specialize. Specializing doesn’t mean you have to say no to clients. You can outsource work that you don’t specialize in from a production standpoint. END
- Enough said about specialization. What is the next mistake? One of the things that irked me the most when I used to interview project managers candidates was to hear them say that they wanted the job because they loved languages. We all know that the love of languages isn ’t sufficient to excel at managing multilingual projects. Yet, LSP owners often think they are immune to this logic. You got in the business because you love languages yourself, and never quite stopped loving them. Alas, as an executive, your passion for languages doesn ’t matter that much. [CLICK] Sure, it will appeal to some clients. But the most successful LSPs have at their helm executives that have a passion for running a business. END
- So let me ask you, do you have a business plan that includes a vision and goals? Do you review every day the purchase orders your team issued, what you invoiced to clients, and the status of accounts receivable? In our Owner ’s Guide to Maximizing LSP Value, we interviewed LSPs. The smaller the company, the greater the skepticism our interviewees had about the receptivity of owner/operators to running their firms in a more “business-like” manner. Many were found unwilling to change a way of life and working that has treated them very well. END
- You have to run your company like a business, regardless of size. Sustainable enterprises that will thrive on their own and be attractive to potential investors or buyers operate according to a standard set of criteria – audited finances, institutionalized division of labor, documented practices. Establish an annual strategic planning process. Know how to articulate what it is you are trying to achieve. Serious companies regularly step back, assess where they are, where they want to be, and put together a plan for how to get there. Here is a specific idea. Have a formal board of advisors or directors. Besides being able to provide oversight and advice on institutional structure, board members from outside can fill in gaps in the collective expertise of your company. This means ceding some of your authority, which can be psychologically trying for an entrepreneur – one of the advantages of owning your own business is to be your own boss – but the transition you ’re trying to make is to be the CEO of a proper company rather than lord of a fiefdom. END
- The next mistake on our list is that you manage people. What? Am I telling you to let your staff lose and hope for the best? [CLICK] Of course no, but there is a better way to manage a company than to manage people. END
- The key is in this question. Read [PAUSE] I hope not. In a study that will soon be published on the life of project managers, we found out that two thirds of project managers are satisfied with their job. But whether satisfied or dissatisfied, they have some real challenges with how they are managed. END
- Move from managing people to managing results. The client doesn ’t care that you put a lot of effort into a translation. What matters to them is whether the deliverable meets their needs. Apply the same logic internally. An approach that I have personally found very interesting is called ROWE – Results Only Work Environment. “Why Work Sucks and How to Fix It” from Cali Ressler and Jody Thompson was named “The Year’s Best Book on Work-Life Balance” by Business Week. It debunks the myth that time spent working plus physical presence in the office equals results. In a results only environment, people can do whatever they want, whenever they want, as long as the work gets done. There are no set work hours, no office you are require to commute to, no core hours where you have to be available. Instead, you focus on clear goals, communicate often, and hold people accountable. Most LSPs will find it hard to move to the extremes the authors describe in this book. However, some people do it. Michelle from Choice Translating who’s in the room today has actually told me last week that she’s working on implementing it. But whether you become a convert or just pick up some ideas you like, I find it to be a good read to think about the type of management style you practice. It helps you understand how to focus on managing results instead of people. END
- We ’re getting to the end. Next on our list of mistakes is the fact that most LSP owners hire people like them. [CLICK] This is tied to the discussion about the love of languages. However, it goes beyond that. You are good at training new employees on hard skills like using TM or selecting a vendor in a database. But you typically hire people with the same soft skills as you. END
- Read [PAUSE] The natural reflex is to hire people you can easily relate to because they think like you and because you ’ll have to spend 40 hours a week with them. Many managers look for the same qualities in an employee that they would in a potential new friend. It makes for a pleasant work environment, but that ’s not what your business needs. END
- Now let ’s face it. They broke the mold. Nobody is as good as you. Look for people with different experiences, people who can complement you and the rest of your staff, people who bring qualities and perspectives you lack. Confrontation is good for innovation. Seek diversity of ideas in order not to stagnate. If your team agrees on everything and sees everything from the same vantage point, you are likely to miss something important for your business and lose outside perspective. END
- Now, here is one of my favorite mistakes. You do it all and you parade around like it is a great thing. [CLICK] END
- But here ’s the reality check: Read [PAUSE] Chances are that you do. Most executives we talk to do. END
- In our Owner ’s Guide to Maximizing LSP Value, our interviewees recommended that entrepreneurs work their way out of the primary perch. This means delegating critical responsibilities to other employees as part of a succession plan that ensures continuity after the owner leaves. And yes, you all already know that but let ’s face it, you often find excuses. I know I always did. But it’s your company. You can choose the setup. No excuses are valid. This brings me to a side point: Stop being so patient. In our discussions with owners, we often find that they won ’t fire employees that don’t perform because it is too hard to find replacements. Or they are in dead end situation with non-promotable people, yet are in dire need to be able to delegate responsibilities to capable and willing employees. Create a pipeline of internal and external candidates just like you would with sales. You should always have people in the qualification pipeline so that you don ’t scramble when you need a replacement or an addition to the team. END
- Here we go with the final mistake on our list. I hope everyone here knows the Castafiore. It takes skills and hard work to be in this industry. As a result, there are a lot of divas who think they know it all. [CLICK] And as you have guessed, there is a downside to that. END
- Read [PAUSE] When the pace is so fast, it is easy to become introverted and not see what is going on around you. You may be language experts but you rarely are business experts. Make it a priority to become knowledgeable about the various facets of the company. I am not talking about just doing your own research or colleagues here at the conference. Expand your horizons and continuously seek external viewpoints not to miss a client want or a way to optimize your operation. Go beyond our industry. END
- Because, yes, you can teach an old dog new tricks. You may have been doing this for a very long time. But you are only as good as what you and your team knows and delivers. END
- To conclude, here is a recap of what I wish I knew when I was on the LSP side. [Read]
- [Read]
- Before I open the floor to questions, let me note that the research behind this presentation crossed a range of qualitative and quantitative research conducted by Common Sense Advisory. Here is a list of reports tied to this presentation.
- My contact information is listed here in case you ’d like to get in touch with the presentation. What questions can I answer for you now? END Questions to get the discussion going. Which of these mistakes do you find the hardest to correct? Does anyone want to share a success story tied to any of these changes in your approach? What other big mistakes do you think LSPs make? Did I miss a big one?