Deeper insights into localization
To get right to the point, localizing and internationalizing your pricing is a quick win with significant growth dividends.
There are two types of localization - cosmetic localization and market-based localization.
Cosmetic Localization involves simply making sure the currency symbol of your price matches the currency of the buyer within their location - a buyer in France sees Euros, a buyer in the US sees dollars.
Simply cosmetically localizing your pricing correlates to 30 to 45% higher growth on a relative basis compared to simply putting all of your prices in the same currency. This is because people want to buy in their own currency and trust their own currency more than others.
Interestingly enough, the best companies are taking localization to the next level with market based localization, which means actually measuring the willingness to pay in each region and charging accordingly. Buyers in France would pay the equivalent of $150, and those in the US may be paying only $100.
Companies that are using market-based localization are seeing nearly double the growth than their non-localized counterparts. This happens because even in a globalized world, each market is different with different densities, competitive environments, and the like.
On a generalized basis, relative to the U.S, the Nordics are typically willing to pay 25-30% more, the UK 15-20% more, and generalized Southeast Asia willing to pay 30 to 45% less. These differentials are an enormous opportunity for ARPU and volume.
Great pricing comes down to understanding your buyers and utilizing that understanding to properly price those profiles accordingly. Localizing your pricing is an extremely quick win that every company should at least be doing at the cosmetic level.
Well, that's all for now. If you have a question, ship me an email or video to pc@profitwell.com and let's also thank Jon for sparking this research by clicking this link to share on LinkedIn. We’ll see you next week.
*** If you missed any of our previous episodes you can find them here: ***
Episode 4: Freemium Benchmarks
Episode 5: Integration Benchmarks
Episode 7: Expansion Benchmarks
Episode 8: Discounting Benchmarks
Episode 9: Value Metric Benchmarks
