Has per-word pricing had its day?
The smiling hair stylist takes your coat and sits you in front of the mirror.
“So, what would you like today?” he asks.
“Hmm, not sure. What are the options?”
“Well, a cut and blow-dry is £0.0003 per hair. Cut and finish is £0.0004 per hair. And a restyle is £0.00045 per hair.
You think it over for a moment.
“I’ll have a cut and finish.”
“Great,” the stylist says. “Now, just pop your head under this scanner.”
After a few seconds, the scanner beeps.
“98,458 hairs,” the stylist says. “At £0.0004 per hair, that makes £39.38.”
“Lovely. I don’t suppose you do discounts for frizzy matches?”
This scenario is, of course, made-up nonsense. When you have a haircut, you pay a fixed price for your whole head. Your money covers the stylist’s skill, time, materials and overheads, and the perceived value of the product: the fact that a good haircut makes you look and feel better.
In that sense, a good haircut is not unlike a good translation. A translation, done well, is the result of years of training, lots of care and attention, and a great deal of professional investment. It also creates value for the end client – sometimes to the tune of millions of new sales. So why is per-word pricing still the dominant model in the translation industry? And is it really any less absurd than the concept of per-hair rates for haircuts?
It’s easy to see why per-word rates have stuck. Clients need speed and simplicity when calculating costs. And with so many intangibles in the translation process, the source word count is the only concrete starting point for creating quotes. It lets you agree a clear, fixed price up front – which is good for everyone.
Or is it? Because while per-word rates make sense for clients, they can sometimes leave vendors short-changed. A project manager can set up and assign a simple 500-word text in a few minutes, and a good translator can hammer out the work in well under two hours. But if the source file is in an unusual format, or the subject needs any kind of research, the work could equally take double the time and become unprofitable.
Per-word rates also fail to factor in the translation’s value to the end client. A software company, for instance, might need a 30-word advert in 20 languages. Even if they pay a minimum fee for each language, the costs are minimal – especially when you think how much new business the ads could generate. The client’s potential return on investment is huge, but the translation vendors, earning basic per-word rates, share none of the rewards.
Is it time, then, for us all to change our approach to pricing? Should we follow our old friend the hairdresser, quoting fixed prices that reflect the commercial value of our translations and not simply the number of words they contain? For high-profile jobs, could we even start negotiating commission agreements linked to sales in the target market?
Rates are being squeezed all the time, with LSPs and translators under constant pressure to stay competitive and profitable. Value-based pricing could be a way to earn similar margins to other creative industries, and to help make translation businesses more sustainable. It could even stave off the creeping mindset that speed and savings matter more than quality and skill.
It’s certainly a nice thought. But for it to work, the whole translation industry would need to change. LSPs and freelancers would have to overhaul their business models. Each quote would have to be negotiated, and not just taken from a price list. Clients would have to agree to pay more for the same service. And with the need for speed and cost-efficiency so deeply entrenched, it’s hard to see any of this happening on a large scale.
So it looks like per-word pricing will be around for some time yet. If we’ve all survived with it for this long, we can probably keep it for a while longer. But that doesn’t mean we shouldn’t question it – and for the daring souls who are prepared to test the alternatives, who knows what the rewards could be?