Nov 162010

Listen to tranfree 75
tranfree 75 – Upside-down world & Customer Loyalty
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Hello and welcome to another tranfree.

It’s been a busy month for me. I’ve spent a fair bit of time reconfiguring a new web server to bring all my web hosting into one place. I used to have bits and pieces of web hosting dotted about all over the place and wanted to simplify things. But I’d put it off for a long time as I knew it would be the computer equivalent of admin work – something many of us leave until we’re forced into it.

In case you missed it last time, I launched an ebook called Business Success for Freelance Translators. The “Crazy launch  offer” will close on 30th November 2010. There’s still some copies left under the offer, so grab yours now if you want to take advantage of it. This offer will not be repeated in its current form after that time.

I’ve also come up with a loyalty discount plan for previous product buyers. See the end of the main article for details of this. (The reasons for this will become clear when you read the article.)

The other ‘eventful happening’ this month was a hugely popular blog article I wrote about LionBridge. In case you haven’t heard about the 5% discount controversy, the blog post is here.

I hope you enjoy and benefit from tranfree smile


Alex Eames

tranfree editor, Author –

Business Success For Freelance Translators,
How to Earn $80,000+ per Year as a Freelance Translator

Selling Your Professional Services on the Web

Upside-down World

By Alex Eames

To reward or to punish customer loyalty?

It’s an upside down world. So many things are not the way they ought to be. But one thing I found vaguely encouraging this week was the slogan for the recent G20 summit. “Shared growth beyond crisis.”

What I found encouraging about it was the fact that it included the word “shared”. As a species, human beings haven’t always been very good at sharing. We’re innately selfish – it’s a regrettable part of our nature. frown Couple that with the fact that most of us instinctively want to…

  • have nice things
  • be safe and secure
  • live a prosperous life

Those are good, normal and healthy things to want. big grin But it’s easy to lose sight of the wider picture. There’s only a finite amount of tangible resources available in the world to go around. So if you are going to be rich, someone else is going to be poor. (Probably more than one “someone else” – that’s the way it is.) If you want to share a cake between 10 people, but one person gets half of it, the others will all have less. That’s a basic dose of economic reality. It sucks, but that’s the way it is and it’s not going to change. If you’re doing well because you’ve worked hard to get where you are, you’ve nothing to feel bad about. smile

Do the right thing(s) and you will prosper

Those people, businesses and countries which do the right things – create innovative, useful products and services which are in demand, will do well. It cannot be any other way. Let’s take a look at the field of translation.

Globalisation, travel, increased communication, technological developments and the internet have created a long term growth trend in the demand for translation. Naturally, there are competitive forces working against rates and for increased productivity. Obviously when people hear about those who have done well in translation, they want to join the party. You’re always going to get that in any field.

But those who truly do a good job and do it well will float to the top. It’s a kind of commercial justice. If you meet your clients’ needs willingly and well and charge a fair price – demonstrating your worth – you will do well. I call that natural growth. It comes out of being honest, ethical, competent and reliable.

Growth at all costs?

Where I think the world economy has gone seriously wrong is in the basic premise of striving for growth at all costs. We’re lucky in translation because our field is still growing. So there are still opportunities. But surely common-sense and clear thought shows that it’s not possible to grow all the time? An economy will have periods of growth and periods of shrinkage (like Japan in the last decade). A lot of the “growth” in the UK over the last decade has been fuelled by heavy borrowing, both by state and consumers. One day, that money has to be paid back. It’s a one-off situation that can’t be repeated. Or put another way, the economy has been propped up artificially by borrowing against future earnings. If excessive borrowing to fund spending is a bad way to run a household, it’s an even worse way to run a country. The US doesn’t fare much better and neither does debt-ridden Europe. frown

One day it’s got to shrink back to “reality”. When it does, the squeeze will be most profoundly felt by those at the bottom. It can’t be any other way. If you have floated to the top and have good clients, who know the value of your services, you will be secure. If they know that your translation of their product manuals or marketing literature is a vital part of their export process, you’ve made yourself indispensible. They might try to squeeze you a bit, but you won’t be cut out altogether. If you have become truly essential you’ll be in a powerful position to resist the squeeze. Some of your clients might go bust, but you have others to fall back on.

It’s the people working for low rates at “translation workhouses” who will be the ones getting squeezed. We’ve seen this recently with LionBridge’s 5% discount demand, swiftly followed by a poor set of financial results.

Economic growth cannot go on forever.

The point I want to make here is that growth cannot go on forever. Once the resources in the world are all allocated, there’s nothing more to grow. Look at history. Great civilisations come and go. It’s always been that way and it’ll carry on being that way. The democratic capitalist model still has some life left in it, but I wouldn’t be at all surprised if there’s something else dominating the world in 100 years time.

Whilst there may not always be enough work to satisfy everyone who wants to be a translator, there will always be enough work for the best people, who are offering a good service and are a pleasure to deal with. The hard part is finding enough good clients to fill your order book.

Customer loyalty

The best way to build on your success is to try and keep all your good clients. This is another area where the world is upside down. In the area of rewarding customer loyalty, big business has it wrong.

In all sorts of big business areas, customer loyalty is despised and distained. A lot of expense and effort goes on getting new customers by poaching them from the competition.

I’ll give you a few examples.

We have insurance to cover our house and car against accidents and unforeseen disasters. For many years we stayed with the same company, but each year the cost seemed to go up disproportionately. So a couple of years ago I decided to get some quotes from the competition. I was surprised to find that, by shopping around, I could get equivalent cover for a much lower price. The surprise was doubled when I found out the cover was underwritten by the same company I was with already. Double standards! Because I was a “new client” going through a broker, I could get ~30% discount.

These days I like to check the market every year for the best deal. Companies are cutting their own throats to try and steal business from each other. So it pays to look around. But let’s stop and think for a minute. Wouldn’t it be cheaper for those companies to look after their existing clients better instead of charging them more to subsidise acquisition of new clients? Perhaps it wouldn’t? I don’t know the figures. Perhaps the majority of people stick with the same company for years on end without considering other options?

But surely the best way to go, in our business, is to keep hold of the good customers you’ve already got and build on that. It costs time, effort and money to market to new clients.

It’s the same with software. The laptop I bought last year came with McAfee Internet Security pre-installed. It costs £40 to renew the annual subscription for just 1 machine. But if I go to Amazon and buy the new 2011 version of the same software, I can put it on 3 machines and it only costs £15. So that’s an eighth of the price per machine. But if I take the easy option of ‘click the link and give the card number’ it’ll cost me £120 to protect those three machines. This is another example of customer inertia.

Look at this from both sides!

As a customer, if you take the easiest path it will often cost you. From the provider’s perspective, though, it shows you how, if you make life easy for people they will keep buying from you. You need to walk the knife-edge of making life easy for your clients while charging good prices and delivering excellent value. But be sure you don’t punish your clients for their loyalty like in the above two examples.

If you look around, you see this systematic client-abuse behaviour in all kinds of large businesses…

  • Banks using “bait and switch” interest rates to attract savings funds. (Although I pine for the days when money on deposit actually earned some interest frown)
  • Utilities giving discounts for direct debit payments, then debiting far more than they need under the guise of “estimated bills”.
  • ISPs – many of which offer much better deals to new customers than those who have been with them for years.

What I want you to take away from this is to ask yourself two questions…

1) Am I rewarding customer loyalty or do I bite the hand that feeds?

Think about ways you can reward customer loyalty. Build the relationship. But it goes without saying that you only want to do this with profitable clients you enjoy doing business with.

2) Am I jumping through too many hoops to get new clients?

Do you accept deep discounts to get a new client who promises to make it up on the next one? If you give a deep discount to acquire a new client, chances are that when you quote your normal rates at them next time, they’ll be like me with my insurance and look elsewhere.

I’ve provoked myself with this article

In writing this article I provoked myself to consider how I am rewarding loyalty in my own business. As a result of that, I am offering previous buyers of my products a 40% discount on the new Business Success for Freelance Translators ebook package. If you want to take advantage of this offer, it will have to be processed manually as I have no automated verification method. Please send me an email to upgrades (AT) stating your name, email address and approximate year of purchase. I will then verify you in my database and email back purchase instructions.

Alex Eames is the founder of, editor of tranfree and author of the eBooks…

Business Success for Freelance Translators
Selling Your Professional Services on the Web

  2 Responses to “tranfree 75 – Upside-down World and Rewarding Client Loyalty”

  1. Thank you again for a very insightful post. I agree with “Do the right thing and you will prosper” However, I think that it is not only sufficient to do a good job to prosper, as I said in my marketing presentation earlier “Good work counts to your advantage only if it is seen, heard and somehow recognized.”. If you combine the two of them you will certainly prosper, and hopefully not to the expense of someone else becoming poorer. 😉

  2. I couldn’t agree more Tess. 😀

    I know others disagree with the zero-sum comment 😛 I made (and have now deleted because it was misleading), but the overall point of the article is intended to be about becoming one of those in business who float to the top by doing the right thing(s) and rewarding customer loyalty.

    You’re absolutely right that being good is not enough on its own. You have to be good AND be visible to float to the top though. :yes:

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