So, how many LSPs out there carry out regular competition research? Small or large, it is crucial for any business to understand how its pricing structure compares against others.
At Kwintessential, we carry out such research on a regular basis (sorry competitors but I’m sure you guys have asked us for a few quotes too!)
Why? Well for 5 simple, yet critical, reasons:
1) To assess where we are in terms of our pricing model. Are we expensive? Cheap? In the middle? Are the prices against languages realistic?
2) To assess what clients are getting for their money. For example, in the research below, ALS applied translation memory to their quote report and thus a reduced rate occurred due to repetition of terms; some agencies counted symbols in the sample text we sent them, others didn’t; one agency would only price including proofreading (which meant we left them out of the results); and so on. Essentially we want to know whether others are approaching texts in different ways to ourselves.
3) To assess any “extra” charges. Surprisingly some LSPs came back to our quotes with an extra charge for project managing!
4) To assess response times and customer service levels. How long did it take for them to respond to our email? Did they follow us up on the quote?
5) To assess what we need to change to stay competitive!
So, if you aren’t already carrying out competition research, I suggest you do. Try us out and if there are any shortcomings make sure you let me know!!
Here is an example of what we did back in September 2011. One of our team was tasked with carrying out a random check of prices, turnaround times, response times, etc. including ourselves (i.e. secret shopper style). A document was chosen to send out, in this case a questionnaire with a word count of 623. It was general subject matter and we wanted it translated into six languages: Spanish, German, French, Chinese, Arabic and Urdu.
A group of agencies were chosen randomly once we had compiled a list from ITI, ATC and GALA. Eeny meeny miny mo and voila we have some competitors to rank ourselves against.
Now for the sake of brevity we will only look at the pricing metrics here. Our full report covered everything outlined above from response times to what their prices included and everything in between.
Once we gather all the raw data, we pop it into Excel and start playing with sums and charts. Essentially what you want to do is see where your company sits with any given metric. So below you can see when it came to pricing, Kwintessential are under-charging our clients! Well, we think what we charge is fair but at least it shows what the marketplace is doing.
A word of warning, this is a snap-shot of one document into several languages. Had we sent a different document with different languages then this chart may look very different. Don’t take this chart as meaning Agency A is always going to be the most expensive and Agency Z the least.
On top of this there will be some variations due to what agencies can/can’t offer. The rates above cover translating only. A few agencies came back with proofreading included, some with proofreading as an option and some without any mention of it. A few even wanted to certify the document as part of the process. Plus we also had the agency asking for extra to project manage the job. ALS and Global Lingo applied translation memory in their quote report and thus, a reduced rate occurred due to repetition( bravo to those guys). Not all agencies we approached offered all the languages we wanted, which meant they were not included in the final list. In terms of language pairs, the majority of the agencies charged more for Chinese/Arabic/Urdu and less for French/German/Spanish. However some agencies charged the exact opposite which was interesting.
So, as you can see a little bit of effort and a little bit of planning gives you immense insight into your company as well as your competitors. Try it out – let me know how it goes.
by +Neil Payne