Software-as-a-Service (SaaS) companies live and die based on their ability to acquire and retain users across different geographies. As such, localization plays a crucial role in ensuring a SaaS company’s offering resonates with international audiences.
However, localization efforts can require considerable investments. Without demonstrating tangible returns, these costs can be hard to justify. This underscores the importance of defining and tracking metrics that quantify the business impact of localization.
Why Measuring Localization Success Matters for SaaS Firms
For SaaS companies, international expansion is key to scalability.
Localization drives acquisition and conversion in foreign markets by enhancing both product experience and brand perception.
Despite its advantages, localization may still be perceived just as an expense. To secure ongoing investment, localization teams need to put measurement frameworks in place that calculate:
Return-on-investment (ROI): How localization expenditures compare to the incremental revenue gains they drive.
Business impact: How localization elevates key performance indicators (KPIs) tied to acquisition, conversion, and retention.
Approaching measurement in this way positions localization as a revenue-driving function. It shifts perception from a “nice-to-have” cost center to a revenue enabler critical for growth.
"You can actually measure real-time what the impact is of any new languages, new features that you are launching. This is a big difference because you can pivot any efforts to make sure your effort is fully aligned with user expectations and preferences." - Julio Leal, Localization Expert at Spendesk.
Key Metrics for Quantifying SaaS Localization Success
Successfully tracking ROI and business impact requires localization teams to monitor, analyze, and regularly report on relevant metrics. Useful indicators span across departments — from marketing and product to analytics and finance.
User Engagement KPIs
Post-localization lift across user engagement KPIs like daily/monthly active usage (DAU / MAU) and session length demonstrates localization’s ability to drive adoption. Segmenting metrics by locale spotlights which geographies best respond to localization efforts.
Sudden changes also warrant investigation. For example, if German DAU/MAU metrics decline after a localization update, there may be underlying UX issues turning users away.
Page views and feature utilization metrics also provide useful adoption and engagement insights. More page visits and time on site signal a positive user experience. Analyzing feature usage meanwhile highlights the most popular and unpopular functionality by locale.
"User engagement metrics like daily active users and monthly active users for each localized version indicate successful localization. Conversion rates, measuring the conversion from visitor to user, are also critical." - Julio Leal, Localization Expert at Spendesk.
Conversion Rate Lift
By making products more intuitive and relatable, localization boosts international conversion rates. Tracking visitor-to-user and user-to-paid-user rates by locale shows whether localization influences sign-up and retention.
For freemium products, conversion rate lift signals that localization helps move leads toward becoming paying customers. Increased premium subscriptions directly translate to higher revenue.
Lower Customer Churn
In established markets, optimizing retention becomes critical. By regularly surveying users in localized languages and analyzing support tickets, SaaS companies can better understand pain points. Localization helps resolve UX confusion and product misunderstandings that frustrate international users.
Monitoring churn rate and net promoter score (NPS) changes in established markets also quantifies your localization’s impact. Lower international churn and rising NPS demonstrate greater customer satisfaction and retention from improved user experience.
Faster International Revenue Growth
The most direct localization success metric is faster revenue expansion within localized geographies. When keeping promotional activities equal, revenue growth maps closely to localization enhancements.
Analyzing revenue changes before and after localization initiatives control for other market variables. Any incremental gains realized highlight returns directly attributable to localization efforts.
Increased Market Share
Lastly, rising international market share shows localization successfully differentiates SaaS products abroad. By tailoring messaging, functionality, and UX to local preferences, companies gain a competitive edge over rivals that “dumb down” offerings.
Monitoring market share changes helps determine if localized products are gaining ground against established competitors. Combine this with metrics around reputation and brand recognition for a fuller competitive picture.
Communicating Localization’s Value to Stakeholders
Leveraging the above metrics transforms localization from a “black box” cost center to a data-driven function that elevates revenue, adoption, and retention. But extracting insights is only half the battle.
Localization teams must also develop frameworks to regularly communicate program health, effectiveness, and ROI to company leadership and department heads.
Establish an Analytics Baseline
Before launching any new localization initiative, catalog your current metrics across target geographies and priority KPIs. Documenting the pre-localization baseline gives context when assessing post-launch impact.
Baselining also flags potential data gaps. Localization efforts often spur adjustments like adding market segmentation to analytics properties. Close measurement collaboration with product and analytics engineering teams is vital for change readiness.
“It's very important to have a clear understanding of your current performance metrics in each of the target markets. This baseline would allow you to measure the incremental impact of your localization efforts." - Julio Leal, Localization Expert at Spendesk.
Tailor Reporting by Stakeholder
Not all metrics resonate equally across audiences. For example, highlighting usage stats better engage product leaders, while revenue analyses speak louder to finance departments. Localization teams should anticipate and cater to stakeholder data needs.
Package metrics and takeaways tailored to each viewer for the greatest resonance. Translate data insights into strategic recommendations that map to stakeholder objectives around growth, spending efficiency, and risk management.
Set Regular Touchpoints
Don’t just wait for ad-hoc stakeholder requests. Instead institute quarterly or bi-annual localization reporting touchpoints.
These meetings showcase the latest program metrics, ROI, and optimization opportunities. They also build stakeholder literacy to facilitate smoother collaboration. Proactive communication nurtures effective analytics-based decision-making.
Ensuring a Scalable Localization Process
Business impact and ROI quantify localization success. But process efficiency enables achieving both at scale. The following principles drive scalable, high-performing localization capabilities:
Accelerate Time-to-Market
Nimble localization development cycles speed up expansion into priority geographies. Companies fixate on being the first to localize into new languages, but it’s about balancing quality with speed.
Analyze localization workflows, resource planning, and testing to find bottlenecks. Particularly as localization libraries grow, optimized cycle times prevent jeopardizing global launches.
Control Incremental Costs
Adding languages should minimize the inflation of translation, QA, and operations costs. Instead, leverage existing resources and technology supporting current locales.
Centralized localization technology and automated testing prevent duplicate tools and quality processes. Identify commonalities across languages for the greatest efficiency. Platform scalability analysis during vendor selection also prevents cost overruns.
Maintain Quality Standards
While the above principles stress cost and speed, never compromise your target quality levels. Subpar translations erode trust and user experience.
Continually evaluate localized content against preset quality rubrics through manual sampling or automated quality checks. This ensures high standards scale across expanding language breadth.
Key Takeaways for SaaS Localization Success
For SaaS firms, global success depends on localization done right. Localization proves its value by:
Driving business impact across revenue, user engagement, and customer retention.
Delivering strong ROI on localization investments.
Operating as an efficient, scalable function.
Rather than qualitative progress reports, apply quantitative analytics to showcase contributions. And orient localization strategies, roadmaps, and processes to optimize measurable business success vs. theoretical quality.
The matrices are there — it is time SaaS companies leverage them to their full potential. Accurate measurement frameworks make localization a strategic investment rather than a gamble. They transform localization from a cost center to a revenue engine.
Measuring the Impact of Localization with Undertow
Here at Undertow, we fully grasp the challenge of demonstrating localization's return on investment to decision-makers.
We're more than just an agency; we're your collaborative partner, committed to forging personal, trustworthy relationships with each client. Every project is a unique opportunity for us to tailor our strategies precisely to meet your needs.
Our team is a mix of digital marketing savvy and localization experts, always ready to tackle challenges with a creative flair. We're here to guide you through understanding and amplifying the impact of your global efforts.
Lean on us as your guide in the journey of global growth, where we provide not just solutions but clear, expert advice every step of the way. Ready to chat? Get in touch.
