A look 'Inside the Translation Industry 2016' presented to the translation students at University College London. The talk explores the importance of marketing, the value of your brand, the perception of business, how being different helps and the importance of your own well being.

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Inside the Translation
Industry 2016
Rafaella Athanasiadi
Richard Brooks
K International
May 2016

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“If you need a friend,
get a dog.”

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Commodity Good?
from Investopedia.com

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Is translation a
commodity?

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No it bloody isn’t.
But some of us sell it on price, so it feels like price is the
only differentiator (a bit like a commodity).

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Differentiate – Don’t
Discount
“The truth is that if you are in an overcrowded market
where you don’t stand out, all lowering prices will
achieve is to erode your margins. Unless your business
has lower costs than EVERYONE else’s, discounting is a
losing game.
There is an alternative – successful differentiation.
If you can’t come up with something genuinely different
and superior, nothing else will save you”
- Alastair Dryburgh. Management Today. December
2012, P16.

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Your ProductPotential Customer Awesome person who can
do amazing things.
+ =
This isn’t what you sell This is

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Nurture Client
Expand Business
Seek New
Opportunities
Core
Nuisance
Give Low Attention
Lose Without Pain
Exploitable
Drive Premium Price
Seek Short Term Adv.
Risk Losing Customer
VALUE OF BUSINESS
A
T
T
R
A
C
T
I
V
E
N
E
S
S
Development
Cosset Client
Defend Vigorously
High Level of Service
High Responsiveness
Only 1% of
suppliers are here,
bad news. When
you’re here you
can charge 15%
more, good news.
Used by the vast
majority of buying
directors.
Supplier preferencing matrix | Kraljic 1983 HBR

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Pretium = Price
Pretium = Value
The thinking in 10 B.C.
Price = Value
The problem in 2016 A.D.
Price ≠ Value
Pretium

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… 4G is “the
communications
equivalent of the
change the jet
engine made over
steam”
>>> Inability to monetise value creation
Olaf Swantee, CEO EE
3G
1GB
£31
4G
1GB
£26
When Value > Price

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Becky Williams M&S Apology
When Price > Value
>>> lack of understanding of an emotive
reaction to a small price change

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• The last time you met an Accoutant?
• The last time you met someone from
procurement (or vendor management?
• The last time you met someone from the
pricing department?
Rich ponders…

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Of all the 7 Ps Price has
the single most
immediate effect on the
bottom line.
(hint hint… would make a nice tweet)

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“the single most
important decision in
evaluating a business is
pricing power”
“if you’ve got the power to
raise prices without losing
business to a competitor,
you’ve got a good
business. And if you have
a prayer session before
raising the price by 10%
you have a terrible
business”
- Warren Buffet/MIT 2011

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What does a 2% rise
in price do to your
profits?

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P&L #1
Income £100 000
Cost of Sales -£50 000
Gross Profit £50 000
Overheads -£40 000
PBIT £10 000
Interest -£5 000
Tax -£1 000
Profit £4 000
P&L #2 (2% increase in price)
Income £102 000
Cost of Sales -£50 000
Gross Profit £52 000
Overheads -£40 000
PBIT £12 000
Interest -£5 000
Tax -£1 400
Profit £5 600

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2% rise in price =
40% Increase in profits
All other things being equal (tax calculated at 20%)

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The butter costs more than the
corn and the paper bag/cup it
comes in costs more than both
together.

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Created shareholder value by
forecasting revenue streams.
Move from providing a product to a
bespoke service.

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“… a unique mix of attributes that
companies provide through their products,
interactions, ethos and pricing to create
loyalty and satisfaction in targeted
customer segments.
It is the unique set of benefits a business
offers its target customers.”
- P Kotler
Value Proposition

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Value = Benefits - Cost

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Add Value…
Think how the impact, capability and cost change as
you increase the complexity of your product/service
to have a larger impact on your customer. Increasing
(and demonstrating) value as you go.
… and extract some of it

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P&G paid $57 Billion for Gillette (in 2005) but
they only acquired $6 Billion of tangible assets*.
*David Haigh, Brand Finance, Marketing Magazine, 1st April 2005

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• Better price
• Higher sales
• Lower prices
• Better terms
• Higher Search Engine Results
• More partners
• Better retention
• Lower salary expectations
• Better qualified candidates
• Higher PE ratio
• Lower volatility
• Lower borrowing costs
What does a Brand give you?
Its way more than your logo…

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If you put
lipstick on a
gorilla you’ll
still have to
kiss it.

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http://hackthesystem.com/blog/why-i-hired-a-girl-on-craigslist-to-slap-me-in-the-face-and-why-it-quadrupled-my-productivity/

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34. Richard Brooks
uk.linkedin.com/in/richardbrooks
twitter.com/@RichardMBrooks
plus.google.com/+RichardBrooks_L10N
0044 1908 557900
Richard.Brooks@k-international.com
www.k-international.com
Look after yourselves. All the best for your studies.
Talk to me anytime about anything.