Losing Your Translation Rate to the Anchoring Effect by Christina Cai
Thread poster: LegalTransform

LegalTransform  Identity Verified
United States
Local time: 15:40
Member (2002)
Spanish to English
+ ...
Nov 26, 2013

http://blog.transbunko.com/the-anchoring-effect-and-translation-rates/

Excerpt: "...If you do a quick search, it’s very easy to find a crowd translation site that will explicitly tell you they charge $0.01 – $0.05 per word but very difficult to find agencies or sources that tell you that specialist translators should be paid $0.18-$0.25 per word..."

[Edited at 2013-11-26 16:16 GMT]


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neilmac  Identity Verified
Spain
Local time: 21:40
Spanish to English
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My 2 (euro) cents Nov 26, 2013

Excerpt: "But why is it that clients are so resistant to paying $0.18-$0.25 per word for translations?"
- Because it's expensive; whether we're talking euro cents or the good ol' USA, it's still roughly 2 or 3 times my rate, which is average for my zone and a bargain in cost/quality terms.

I sometimes wonder if anyone else finds the constant obsession with rates as tedious as I do...


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Fiona Grace Peterson  Identity Verified
Italy
Local time: 21:40
Member
Italian to English
Possibly the worst article I've ever read... Nov 26, 2013

... and I'm no economics expert. While what he says may be true in certain cases, clients would rather pay 0,01 than 0,18 per word for obvious reasons. Because it costs them less. But they will also find to their cost that it's a false economy - good luck with getting a quality 10,000 word medical translation for $150.

Of course there have always been clients unwilling to pay for quality, and there always will be.


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LegalTransform  Identity Verified
United States
Local time: 15:40
Member (2002)
Spanish to English
+ ...
TOPIC STARTER
Obsession with rates Nov 26, 2013

Probably as tedious as I find the constant obsession with TMs and CAT tools.


neilmac wrote:

I sometimes wonder if anyone else finds the constant obsession with rates as tedious as I do...


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Giles Watson  Identity Verified
Italy
Local time: 21:40
Italian to English
So... Nov 26, 2013

Jeff Whittaker wrote:

Probably as tedious as I find the constant obsession with TMs and CAT tools.


neilmac wrote:

I sometimes wonder if anyone else finds the constant obsession with rates as tedious as I do...


... anchor your rates high before the customer can get a word in and don't let on that you use a CAT tool

Simples!

TM (Translation Meerkat)


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Thayenga  Identity Verified
Germany
Local time: 21:40
Member (2009)
English to German
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Setting vs getting rates Nov 27, 2013

Giles Watson wrote:

Jeff Whittaker wrote:

Probably as tedious as I find the constant obsession with TMs and CAT tools.


neilmac wrote:

I sometimes wonder if anyone else finds the constant obsession with rates as tedious as I do...


... anchor your rates high before the customer can get a word in and don't let on that you use a CAT tool

Simples!

TM (Translation Meerkat)


Of course I agree with what you have stated here.

If neither the agency PMs nor their clients have any command of the target language, then how would they know whether they've received a top quality or a poor translation? On the contrary, it only takes simple math to know the differents between 0.01 and 0.25, regardless of the currency.

And... it always takes two (parties) to tango. For as long as clients (mainly agencies) are able to find someone who translates an X-number of words in a specific field with an impossibly to meet delivery deadline for pennies, they're highly unlikely to pay more. The same applies to CAT-tool related "discounts". For as long as we, the translators, are willing to do excellent work even if we only get paid 50% or less for portions of it, then there is no reason why agencies and/or end clients should stop this CAT-tool-discount practice.

If all translators would refuse to work for less than 0.15 - 0.25 USD, EUR or Pesos, or..., and allow no more than a 20% CAT tool discount, then agencies will think twice before they offer these "starvation" prices to well-educated, professional translators.

It simply boils down to: united we stand, devided we'll starve. This might sound a little harsh, but who in the western hemisphere can afford to live on a 0.01-per-word income?


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Giles Watson  Identity Verified
Italy
Local time: 21:40
Italian to English
It's a bit more complicated than that Nov 27, 2013

Thayenga wrote:

It simply boils down to: united we stand, devided we'll starve. This might sound a little harsh, but who in the western hemisphere can afford to live on a 0.01-per-word income?



Pricing doesn't work like that, I'm afraid.

Other things being equal, the customer will simply turn to a cheaper translator (and there always is one).

The trick is to make sure that other things are not equal by specialising and providing a superior service in specific areas. That way, customers will tend to come to you for the quality they know you can deliver and rates will no longer be their first priority.


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Fiona Grace Peterson  Identity Verified
Italy
Local time: 21:40
Member
Italian to English
It all comes down to quality Nov 27, 2013

Giles, you summed it up perfectly:

Giles Watson wrote:


The trick is to make sure that other things are not equal by specialising and providing a superior service in specific areas. That way, customers will tend to come to you for the quality they know you can deliver and rates will no longer be their first priority.


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Samuel Murray  Identity Verified
Netherlands
Local time: 21:40
Member (2006)
English to Afrikaans
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@Neilmac Nov 27, 2013

neilmac wrote:
But why is it that clients are so resistant to paying $0.18-$0.25 per word for translations?

Because it's expensive.


No, I think that that is exactly what the blog author is trying to get at. You might think that $0.05 is cheap and $.025 is expensive, but for a client with a 10 000 word text who have never bought translation services, both will appear expensive. The higher price will appear more expensive than the lower price, but both will seem like a lot of money for "such a little thing".

The blog author's point is that if you were to give this client the impression that $0.05 is a normal price, then he will think that $0.25 is outrageous. But if you give him the impression that $0.20 is a normal price, then he will think that $0.25 is slightly above normal, i.e. probably a premium price for a premium service.

The point is that translation portals and agency web sites create false expectations, and when an expectation has been created, it is very difficult to undo it, even if you have convincing arguments.

If I understand correctly, the blog author owns a translation business, and they have decided to put higher rates on their front page, instead of lower rates, to ensure that the rate that potential clients would consider reasonable would be "anchored" to the higher rate.

[What I do think is that the tale about hamburgers and pop should have been removed from the final version of the post, because it doesn't contribute to the story at all, and creates the impression that anchoring has something to do with indifference.]


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Samuel Murray  Identity Verified
Netherlands
Local time: 21:40
Member (2006)
English to Afrikaans
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@Thayenga Nov 27, 2013

Thayenga wrote:
For as long as clients (mainly agencies) are able to find someone who translates an X-number of words in a specific field with an impossibly to meet delivery deadline for pennies, they're highly unlikely to pay more.


I don't think that that is true, though. If an agency posts a job with a budget of $0.10 per word, then they are likely to accept a translator whose rate is close to that rate instead a translator who charges a fifth or even a tenth of that rate. Give agencies a little more credit -- they know that a 8c-per-word translator is very likely to be much better than a 2c-per-word translator.

You should not read the blog author's post as advice to freelancers, but as advice to agencies. Ultimately the price that the end-client accepts or asks for will affect the price that the agency is willing to pay the freelancer. Agencies do shop around to find the "cheapest" translator (within reason), but end-clients typically don't shop around as much, and if you can convince an end-client that $0.20 is a normal rate, then you're more likely to get him to pay that rate, which in turn will enable the agency to hire higher-rate freelancers. The point is that agencies should anchor higher rates in the minds of clients who hire agencies, and then that will filter through to the freelancers.


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Łukasz Gos-Furmankiewicz  Identity Verified
Poland
Local time: 21:40
English to Polish
+ ...
Procrastination FTW Nov 28, 2013

What’s hurting our rates is not necessarily the race to the bottom but the anchoring effect. People are simply irrational.


Yup. I've also noticed that. People seem to have some fixed impressions that are difficult to dispel.

If we dig a little deeper into the indifference theory, we’ll find that it’s based on the central assumption that we are rational agents who make decisions to best maximize our total utility. Behavioral economics turns that assumption on its head and assumes that we’re irrational and our decisions are often effected by irrational biases, “rules of thumb”, and how the situation is framed.


Simple heuristics, which are often relatively bad heuristics, but they basically work. Optimising takes time, so people meta-optimise by identifying the best decision they can make after only short deliberation.

If we were all rational beings, we’d realize that a technical translation requires more work than a generic translation


Not always, especially if you translate into a foreign language. Colloquial registers can be a pain.

and thus require a higher compensation


There's more to it. The amount of schooling required, the scarcity of similarly qualified translators, the economic value of the transaction and the contribution of the translation to the achievement of that value etc.

However, transactional pricing (basically a sort of commission on transaction value) doesn't work. People expect to pay cheap per-word or per-page rates while ideally making the translator liable for damage and loss without any restrictions or limitations. ... Which is a bit adversarial and perhaps a bit social-class-ish.

When people are asked to consider a particular value for an unknown quantity before estimating the quantity, their estimates stay close to the number that they considered.


Unlike in other professional fields (or at least it so seems to me), clients often come with defined budgets.

it’s very easy to find a crowd translation site that will explicitly tell you they charge $0.01 – $0.05 per word but very difficult to find agencies or sources that tell you that specialist translators should be paid $0.18-$0.25 per word. (...) The probability that a potential client has already received an automatic quote (...).


That kinda defeats the big conclusion that it's not the race to the bottom. The anchoring seems to be caused by the consequences of the race to the bottom.

Why do we expect a dollar store product to be less durable than a Macy’s product? Because our anchor of the product is higher than $1. The same can be said for anchoring the specialized translation price, clients will expect higher quality translation when they see prices closer to the fair rate and expect less when they see the extremely low rate of $0.015/word.


The problem is that as a translator you're between the hammer and the anvil. You may be too expensive for some clients and too cheap for others at the same time. It's not as simple as raising the price tag, though, it takes more to tap into the gold duct.


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Tom in London
United Kingdom
Local time: 20:40
Member (2008)
Italian to English
Not equal Nov 28, 2013

Giles Watson wrote:

Other things being equal, the customer will simply turn to a cheaper translator


Yes, but other things are never equal. You won't get a good translation for the low prices being discussed here. You'll get a lousy translation that will make you look stupid and wreck your business. A good translator can mean success or failure, and that doesn't come cheaply.

[Edited at 2013-11-28 13:46 GMT]


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KateKaminski
Local time: 20:40
German to English
Hours required Nov 28, 2013

If you are negotiating a price with a client who knows nothing about translating and is surprised at your fee to translate a 10,000 text, it might help to explain how long it will take and what the process involves.

e.g. you can get through an average of 600 words an hour, which includes research on the topic, typing, proofreading and fine-tuning the text. You will therefore need to spend almost 17 hours - over 2 full working days - on this project.

Of course no reasonable person who is aware of your qualifications and years of experience would begrudge paying a decent hourly wage. After all, they are happy to pay lawyers far more per hour!


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