The Bottom Line: How to Calculate ROI on Language Services

How to Calculate ROI on Language Services

The Bottom Line: How to Calculate ROI on Language Services

Deciding whether to opt for professional translation services can be tricky. You constantly have to choose between “Should I use language translation services for my content?” and “Wouldn’t it be cheaper to use online tools and AI instead?” Of course, you want accurate translations without going over budget. So, what should you do?

The solution lies in calculating the ROI on your chosen translation service. This will give you a clear picture of whether you should invest in a language service or look for another option. Let’s learn how to calculate ROI on language services.

What Is ROI?

ROI, or Return on Investment, simply answers the question: Are you making more than you spend? It is expressed as a percentage. For example, say you make a profit of £10,000 after deducting costs such as:

  • Translation fees
  • Editing and proofreading costs
  • The price of software or CAT tools

If your initial investment was £100,000, your ROI would be:

ROI = (Profit / Cost) × 100
ROI = (10,000 / 100,000) × 100 = 10%

The greater the ROI, the better it is for your business. Keep in mind that ROI should ideally be positive — a negative ROI would indicate that your spending exceeds your revenue.

However, calculating ROI on language services isn’t always straightforward. While costs are easy to quantify, the time and effort involved are harder to measure. Similarly, revenue includes both quantitative and qualitative gains, such as improved customer experience, expanded market reach, increased conversions, and enhanced brand reputation.

How to Calculate ROI on Language Services

For many, calculating ROI for translation can seem nearly impossible. Here’s a clear, step-by-step guide to help you do it effectively:

Step #1: Start with Market Research

First, determine where you want to sell. The country or region you choose plays a major role in calculating your costs, as some markets require more localisation than others.

For example, Germany—with over 90% internet penetration—is ideal for marketing tech products. Estimate the sales revenue you might generate there.

Estimated Sales Revenue

Look at your home market’s current sales for guidance. Check website visitor numbers, conversion rates, and average order value.

Suppose you receive 10,000 visitors per month and 2% convert. If 200 people buy a £50 product, the estimated revenue would be:

200 × 50 = £10,000

Use Google Trends

Google Trends helps you compare keyword interest across markets. For instance, if you’re selling laptops, you can compare search interest between Germany and the US. While the numbers aren’t exact, they provide helpful market insight.

Step #2: Consider Market Behaviours

Next, analyse local buying behaviour. Look at average online spending, preference for local vs. international brands, and any taxes, VAT, or regulations that affect the market.

Step #3: Forecast the Revenue

For example, say you expect 5,000 German visitors monthly after translating your content. If your conversion rate remains 2% and your offer is £50, your estimated revenue becomes:

5,000 × 2% × 50 = £5,000 per month

Step #4: Estimate the Costs

Add up all tangible costs, including translation and editing fees (per word or per project) and localisation costs such as cultural adaptation, market research, or content modifications. Total these to get your translation investment.

Step #5: Select the Metrics

Next, determine which metrics will measure your success. Key analytics include:

  • Website traffic from foreign markets
  • Conversion rate on translated content
  • Number of new and unique foreign visitors

Step #6: Calculate the Revenue (Qualitative)

Revenue isn’t just monetary. Evaluate qualitative gains such as improved customer experience, increased brand trust, stronger reputation, and higher market reach. These indicators show whether your localisation efforts are working—and whether long-term ROI is likely.

Step #7: Calculate the ROI

Once you have your cost and revenue figures, apply the formula:

ROI = (Revenue – Cost) / Cost × 100

For example, if your translation costs were £10,000 and you earned £50,000 in new international sales:

(50,000 – 10,000) / 10,000 × 100 = 400%

Conclusion

Calculating the ROI of professional translation services can feel overwhelming. Whether you’re translating a website, offering multilingual support, or localising an app, the intangible benefits can be hard to measure.

However, ROI gives you a clear picture of whether your investment is worthwhile. Localisation isn’t only about revenue—it’s about building trust. When you speak to customers in their language and respect their culture, you build long-term credibility. That’s where Language Reach can help.

Still, if you want to show your business the impact of these efforts, ROI remains one of the best indicators.