Why Globalize?

    August 29, 2005

As an English-speaking American who travels a lot, I’m often struck by a paradox. Most of the world doesn’t speak English, but wherever I go in Europe, Asia, or South America, I find enough English speakers to talk to, direct me to where I’m going, and do business with. As Seinfeld might ask, what’s up with that? Let’s consider the facts.

Over six billion people live in over 200 countries spanning 24 time zones. These people use hundreds of currencies to conduct business in thousands of different languages and dialects. Their business practices are literally all over the map, ranging from simple barter to cash to electronic payment to sophisticated arbitrage. Most speak Chinese, Spanish, Russian, or something other than English.

Trade is centered around a few economic superpowers – the United States, the European Union, China, and Japan. For these markets only a few currencies and languages really matter – and English matters a lot more than most others. Corporate websites offer some insight into how important it is. Companies often publish information on their sites in just one language besides their own, and that language is likely to be English. Everyone, it seems, wants to sell to Americans, Australians, and the English.

Which Languages Should Matter to Your Company?

Based on our data, it would be easy to say English is all you need. For a report on global website design titled “Design Practices for Global Gateways” (Sep03), we analyzed the home pages of the top 25 revenue-producing companies in 16 countries from Western Europe, Asia, and the Americas. We cataloged the languages that each of these 400 firms supports at their corporate websites. Including companies in Anglophone countries, 98.5 percent claimed some English. When we eliminate the firms from English-speaking countries, the percentage of sites offering English dropped just 9.4 percent to 89.1.

No other language came close to English. The next most widely used tongue was Spanish: 21.7 percent of the companies claimed Spanish, but when we excluded Spain and Mexico from the count, the number dropped to 6.8 percent. Support for French comprised 17.2 percent of the sample if we included French-speaking countries, but the support dropped off precipitously to 3.6 percent when we normalized the sample by removing French and Canadian firms.

So what does this mean to global organizations? English remains critical to business on the web and off. One possible conclusion is that if you sell on the internet, you need to do so only in English. But stop for a second. Think about what executives in these non-Anglophone countries have already figured out. Despite the fact that 70 percent of web users worldwide speak some language other than English, more than half of the commercial interactions online originate in English-speaking nations. These marketing executives have done their homework and determined that if they can afford to do just one other language besides what they speak at home, English is the natural, safe choice. They have internalized what former German chancellor Willy Brandt said decades ago: “If I am selling to you, I speak your language. If I am buying, dann mssen Sie Deutsch sprechen” (or “Wenn ich zu Ihnen verkaufe, spreche ich Ihre Sprache. Wenn ich kaufe, then you must speak German”). People are much more likely to buy if they fully understand what it is you’re trying to sell to them.

Compare this practical attitude toward addressing prospects in their own language with what we found in English-speaking companies. Nearly 42 percent of the U.S. companies, 50 percent of the British firms, and 80 percent of the Australian websites in our sample of 400 websites offer only English content. Meanwhile, companies in non-Anglophone countries have been targeting customers in Seattle, Slough, and Sydney in their native English. Most planners in the Anglo-Saxon world have yet to internalize Chancellor Brandt’s lesson. You can avoid their mistakes.

The Opportunity: International Markets Outstrip U.S.

So now you’re wondering what to do about other markets and the inconvenient languages business buyers and consumers in those countries speak. Follow the money. Economic data can help you make some decisions.

In the United States, exports and imports make up roughly 20 percent of the gross domestic product, making globalization a fact of life for most American workers. The International Monetary Fund (IMF) predicts that world output will increase 4.4 percent in 2005, down slightly from 2004’s 4.6 percent. U.S. economic growth this year will slow to 3.9 percent. That means U.S. firms can expect profits from non-American operations to grow between 10 and 15 percent (roughly $30-45 billion). Cheaper dollars – bad news for Americans abroad – will further pump up repatriated profits.

Unless you’ve been living in a cave for the last year, you cannot miss the economic ascendance of China, India, and Russia. These countries are investing in infrastructure and cultivating consumer societies. The next generation of the internet promises to be a much more cosmopolitan affair with much more participation by Asians, Europeans, and Latin Americans – transacting in their own languages with their own currencies.

If businesses want to make more money from this expanding world economy, they need to address these new buyers in their own languages. Companies can globalize their websites and open up this new world of opportunities. With so many language and country choices, what should you do to take your web presence beyond the Anglo-zone?

1. Think like a businessperson. Study which markets could use your products or services, developing a short list of which countries offer the best opportunity. Create a business case for building a website for each of these potential targets. Then choose one country as your test case. Realistically speaking, your best bet could even be in an English-speaking country that has a different currency, laws, and culture. Absent the language issue, even this could be useful. For example, a U.S. company could target the U.K. to determine how tightly bound its business is to the laws, technology, and consumer expectations of the States.

2. Start small. Develop a web-based marketing, sales, and customer service launch plan for your target market. Make sure that you involve IT, CRM, and other corporate resources that you will need to build a reliable, helpful site. Contract with translation agencies that have language and country experience for your target market. Publicize the availability of the site in that country when you launch it. Thinking back to Herr Brandt’s advice, remember to advertise the site in the publications or broadcast media that your prospects are likely to read or watch.

3. Measure the results. Employing the same metrics that you use to measure return on investment at your corporate site, evaluate website data periodically. For example, if your corporate site is meant to build or reinforce your brand, measure how many pages visitors look at and whether they register for more information. If you have a transactional site, calculate up-sell and cross-sell activity.

4. Learn from your experience. Talk regularly with everybody involved to understand what you did right and what didn’t go according to plan. As you fix problems, document them for future reference. With your newfound expertise in hand, move on to other markets in the same step-wise fashion.

Beyond the Web: Creating global enterprises

The web is only the tip of the globalization iceberg. While international activity at your company’s internet site is the most visible manifestation of worldwide interest, satisfying global demand will involve every corner of your company. Some firms like General Electric, Renault, and Sony have already built an active global portal, which is an international online entry point for communication and commerce. They have aggressively integrated the web with other corporate media and distribution. They have systematically and deeply translated marketing and support materials into the languages of their target markets.

Follow their lead. First, translate and localize your website to the needs of developed and emerging markets that make sense to your company. Then go beyond the web. Globalization reaches deep into your company, far deeper than any customer-facing internet. It touches your other distribution channels, requires integration with your supply chain, and needs to be plugged into customer service initiatives. In the final analysis, all successful business, like politics, is local – or should appear that way to the buyer. The right language is the first step in becoming a local hero.

Donald A. DePalma, Ph.D., President and Chief Research Officer, Common Sense Advisory

For additional information, visit www.commonsenseadvisory.com or e-mail Melissa@commonsenseadvisory.com.