Numerous studies explore the positive ROI of localization efforts. [1] [2] [3] At Localazy, we’ve worked with hundreds of companies at different stages of their localization journey over the years. Whether they are just starting or have already expanded into multiple regions, the importance of localization for their success is evident. It’s become a “secret weapon” hidden in plain sight that propels a successful scaling process.
Localization is especially crucial in Europe, where the market consists of many smaller countries, each with a preference for its own language. In Europe, a company starting in one country can quickly reach the limit of its total addressable market (TAM). For example, starting a business in Czechia is comparable to limiting your business to a state like Connecticut in the US in terms of population and GDP. [4] [5]. Therefore, localization is essential for success in Europe.
It’s not just about translating content but adapting it to meet the cultural needs of each market. This improves user experience, which significantly impacts product success and company revenue, even if it’s hard to measure directly. [6][7]
Additionally, competing in various languages can be a cost-effective strategy. In times of insane CAC inflation [8], it allows for diversification through SEO, ads, social media, and other channels where competition may be less present. Due to their unique environment, European companies often understand this better than those in larger markets. In fact, those investing in localization are 1.5x more likely to see revenue growth, which highlights the financial benefits of reaching a wider audience. [9]
How to start with localization
Localization might seem daunting due to its complexity, uncertainty, and added management overhead. For these reasons, it’s often hard to get the right buy-in from leadership and allocate the appropriate budget. However, it doesn’t have to be expensive. Quite the opposite: there are affordable and efficient ways to start small with localization, especially for newcomers.
The key is to start smart and build from there. Understanding the unique aspects of each market becomes essential. Often, companies have team members familiar with different cultures who can manage the process and make necessary adjustments. A good place to start is choosing countries culturally and geographically closer to you first, as the risks are lower and the costs of mistakes are minimal. This approach helps ease into the process without significant financial costs.
For example, a German software company looking to expand into Austria might start by leveraging its existing team members who understand Austrian culture and dialect. This way, they can test the waters with minimal investment and adjust their approach based on initial feedback.
Once they take this first step, these four key elements can help them along the way:
1. Hiring local professionals
Local professionals who understand market specifics and customer behavior can provide essential insights and help navigate local challenges. For instance, a regional marketing expert can tailor your campaigns to better resonate with the audience. Collaborating with local businesses, distributors, and agencies can also help establish a strong market presence and build brand credibility. These partnerships often offer more affordable and reliable entry points into new markets.
2. Replicating what works
Expanding into new markets incrementally allows businesses to learn and adapt from initial experiences before making larger investments. This step-by-step method minimizes risks and helps refine your approach based on real-world feedback. Leverage the knowledge gained from previous market expansions to improve future efforts. Each new market provides valuable insights that can boost the chances of success in subsequent steps.
3. Being truly local
Develop marketing campaigns and content that reflect local tastes and cultural references to improve engagement and loyalty. Effective localization means speaking the language of the local audience, both literally and figuratively.
A great example is Spotify, which hires local music experts to curate playlists that appeal to specific regional tastes, which ultimately helps it better serve its users and grow its market share in different countries. [10]
4. Automating everything
Many companies start with localization without considering the process and how to reduce the overhead it will impose on the team. Of course, spinning up an Excel sheet where each column represents the translation will create more issues in the long run.
At Localazy, we recommend using a localization tool as soon as you decide to start with the first language. It’s usually a set-it-and-forget-it solution that allows for monitoring, collaboration, updating, etc., and enables adding more languages in the future without additional overhead.Our product simplifies these tasks, ensuring seamless and automated localization efforts without breaking the bank.
Implementing a continuous process for localization and QA is also important to ensure that content remains relevant and accurate over time. In traditional workflows, teams had to wait for the localization team to finish their work before release. Ideally, localization should not block development, which is now entirely possible using tools like context-aware machine translations. You get an even smoother experience for multiple languages where localization managers are part of each team for a seamless process.
Conclusion
Successful market expansion through localization requires a deep understanding of local cultures, leveraging local expertise, setting up automation tools, and learning from past experiences. Starting small and focusing on these key factors allows businesses to enter and thrive in new international markets without breaking the bank. After gaining initial traction, many companies find it natural to go all-in with localization, investing even more resources to leverage their business’s full potential.
