Lower Rates + Pressure: Bad Combination

Many of our colleagues have been receiving e-mails from translation agencies asking them to lower their rates. We don't work with agencies, but our take is that if translation agencies are receiving downward pressure on their rates from their customers, than they haven't built strong enough ties with their customers, hence the price sensitivity. Of course, the tough economic times are a significant contributing factor. If an agency has failed to retain a customer at the current rates, lowering rates is a way to retain the customer (but perhaps not the smartest way). The business (agency) needs to take a hard look at how the customer can be made happy and receive good value without lowering the price. In this economy, everyone is trying to save a buck or two. Agencies need to realize that downward pressure on prices is one of the risks of doing business, and they should be running financially sound businesses that have some financial cushion (and plenty of generous margins, which they do). Wanting to pass the buck on to the suppliers (=freelance linguists) and getting them to lower their rates is not a sound way of running a business.

One of our friends received a message from a large translation agency (to remain unnamed) that did not even address her personally. It said "Dear translator". The e-mail included many stylistic atrocities. We think that only folks with a solid command of the English language should be writing external communications. If these e-mails aren't proofed, we have serious doubt about the degree of quality assurance for translation projects at this company.

"We would like to look again at this position with you, and we would be
pleased to hear from you in the hope of talking about rates at a more
sustainable level, thereby opening the way for new work opportunities."

The message went on to state that, while the company hasn't worked with the freelancer in question before due to her higher rates, would she consider lowering the rates further (to a lower price than she turned down in the first place) now that economic times are tough?

Our colleague's answer to this question was "no." Passing the business risk of big companies on to freelancers is not the way to do it. Our suggestion to agencies who are facing downward pressure on prices, for one reason or another: buy cheaper paper. Cancel the company picnic. Get rid of the coffee machine if you must. Buy cheaper chairs. Buy open source software . There are a many ways to do this that do not include putting unreasonable pressure on suppliers.


Tom Ellett on May 13, 2009 at 11:46 AM said...

I love your suggestions of alternative ways for agencies to cut costs! I also have a suggestion for end clients: Instead of focusing on unit cost, put some thought into how you spend your translation budget.

Write more concisely, waffle less, and consider whether anybody is ever going to read the translated text before ordering a translation. Perhaps an executive summary would do?

Or, in three words: Cut the crap!

I expanded on this theme a few weeks back: Economize on quantity, not quality.

Judy Jenner and Dagmar Jenner on May 13, 2009 at 11:53 AM said...

@Tom: Glad you like, and thanks for reading. Your article was also very interesting. We weren't familiar with your blog, and we are now adding it to our blogroll. Excellent suggestion for clients on keeping the texts to be translated shorter...now, that's thinking outside the box!

Kevin Lossner on May 13, 2009 at 12:15 PM said...

@Tom: "Cut the crap" is absolutely right. Most of the manuals I translate could indeed be trimmed by half if they were subjected to competent editing. Maybe the serious agencies ought to start emphasizing technical writing services and fixing the sources before the end up on our desks.

Quite a number of the agencies I know are indeed under price pressure, but I expect them to economize, look for better customers or find ways to add more value to the delivery to keep the customer and perhaps bring in more revenue. The smart ones I know are doing just that. As for the others, well....

Today I was contacted by another person explaining that yet another major company has decided to act as its own "agency" and work directly with freelancers. At better prices than many of the agencies I know get. If that's the future, I can live with it. I find agencies convenient to work with, because the good ones give me the buffer I need to work in peace and create a high-quality product. But I can and will play the game another way before I'll entertain price cuts for anyone unless they plan to start paying my household expenses.

Millionnaire on May 14, 2009 at 6:47 AM said...

I totally agree with you. Nice to see people who doesn't think that low prices is the only way to get and retain customers!

Di-Metra said...

Brilliant thoughts! It was very inspirational.
Good luck, colleagues!

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